December 03, 2024 [Reuters]- Rosneft, Russia’s largest oil producer, said on Friday it may delay modernizing its refineries due to high interest rates and taxes, as its nine-month profit fell 13.9% year on year to 926 billion roubles ($8.7 billion).

Industry sources told Reuters this month that at least three Russian refineries, including Rosneft-owned Tuapse plant, had to halt processing or cut runs due to financial losses amid export curbs, rising crude prices and high borrowing costs.

Rosneft’s head Igor Sechin, a longstanding ally of President Vladimir Putin, has long criticised the central bank for its tight monetary policy.

“In order to protect the shareholders’ interests and avoid losses, Rosneft has been considering the need to suspend refinery modernization projects. At the same time, meeting the domestic demand for quality petroleum products remains a priority,” the company said.

The bank hiked its key interest rate by 200 basis points last month to 21%, the highest level since the early years of Putin’s rule in the 2000s, when Russia was recovering from the chaos that followed the Soviet Union’s collapse.

Rosneft also said that a profit tax increase to 25% starting in 2025 had a negative impact on company results.

The company said its oil and gas condensate production from January to September reached 138.3 million metric tons in total, or 3.753 million barrels per day on average.

Rosneft did not provide production data from a year ago for comparison, but said output was pressured by an OPEC+ agreement to curb production.

Rosneft said it had renewed its share buyback program amid high stock-market volatility.

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