Rosneft Sees Steep Drop In Q4 Profit

Rosneft, the country's largest oil producer, expects revenues from each barrel of oil it exports over the final three months of the year to be just one-fifth of those for the first three quarters, chief financial officer Peter O'Brien said Wednesday.

The anticipated decline is the result of a steep fall in world crude prices while export duties remained high.

The average return on exports, after the deduction of the duty and production tax, will be $7 dollar per barrel, O'Brien said in a conference call.

The same figure averaged $35 over the previous nine months, he said.

O'Brien didn't say whether Rosneft would actually lose money on fourth-quarter exports after lifting and transportation costs were added in.

Uralsib estimated that these costs were at least $7.70 across the industry in October and November.

Rosneft will have to refinance roughly $8 billion of debt next year, O'Brien said. Much of it is extendable, he said.

The company hopes to generate enough cash flow next year to reduce its debts but by much less than the roughly $7 billion it erased this year, he said.

"There will obviously be some debt reduction, although I don't expect it to be, obviously, nearly as big as this year," he said.

The company doesn't plan any changes in dividend policy, O'Brien said.