Russian energy company Novatek reported a fall in 2020 net profit, mainly due to lower hydrocarbon prices and a tough year-earlier comparative due to gains on asset sales.

On hydrocarbon commodity prices:

"This negative economic impact [from global coronavirus-related shutdowns] lowered demand for crude oil, natural gas and oil products, which combined with the increase in the supply of crude oil due to the cancellation of the OPEC+ production agreement in the first quarter 2020, resulted in a decline in global hydrocarbon commodity prices."

On crude-oil benchmark prices:

"Global economic activity began a gradual recovery during the second quarter...as well as a partial recovery in benchmark crude oil prices following the new OPEC+ production agreement reached and the compliance to the target cuts. Nevertheless, crude-oil benchmark prices are still lower than their pre-crisis levels."

On natural-gas production:

"Our total natural gas production including our proportionate share in the production of joint ventures increased by 3.6% as compared to 2019."

"The main factors positively impacting our production growth were the launch of fields within the North-Russkiy cluster at the end of 2019 and in the third quarter 2020 (the Cenomanian and Valanginian horizons of the North-Russkoye field, the East-Tazovskoye and Dorogovskoye fields), as well as an increase in hydrocarbon production from the Achimov horizons at Arcticgas's Urengoyskoye field due to the expansion of the gas condensate treatment facility in January 2020."

On liquids production:

"Our total liquids production including our proportionate share in the production of joint ventures increased by 0.7% compared to 2019 mainly due to an increase in the production at Arcticgas and the commencement of gas condensate extraction at the North-Russkiy cluster, which completely offsets declines in production at mature fields of our subsidiaries and joint ventures, and allows to maintain full capacity utilization at our processing facilities in the long term."

On gas sales volumes:

"Our natural gas sales volumes totaled 75.6 billion cubic meters (bcm), representing a decrease of 3.6% as compared to 2019."

On natural gas inventories:

"As at Dec. 31, 2020, we recorded 0.8 bcm of natural gas in inventory balances compared to 1.2 bcm at Dec. 31, 2019."

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(END) Dow Jones Newswires

02-17-21 0709ET