Russian TNK-BP profit slumps on weak crude

Russia’s third-largest oil producer TNK-BP International said on Friday its second quarter net profit slumped to $808m (£513) from $2.2bn a year ago on the back of lower crude prices and higher taxes.

The company, half-owned by BP, said Russian Urals crude oil prices declined 7 per cent during the period, while it had to pay a higher export tax, an extra $14 per barrel, due to a time lag in taxation.

TNK-BP's earnings before interest, taxes, depreciation and amortisation (Ebitda) dropped to $2.25bn from $3.43bn in the year-earlier period.

Second quarter Ebitda was also hampered by the effects of foreign exchange fluctuations on mineral tax payments, the company said.

TNK-BP's revenue for the period declined to $14.26bn from $15.38bn a year ago.
The company said it increased capital expenditures by 8 per cent to $2.4bn from the year-earlier period.

Oil major BP is in the process of talking to potential buyers interested in its share of the TNK-BP venture. BP formed the 50:50 joint venture with AAR, a consortium representing several Russian tycoons, nearly a decade ago to tap into the country's vast energy reserves. The group is estimated to be worth as much as $60bn