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Russia’s biggest private gas producer Novatek reported net income of 71bn roubles ($1.26bn) in the first quarter of 2017 , down 39 per cent year-on-year due to a one-off windfall last March but above market forecasts. Novatek said revenue during the quarter rose 11 per cent to 154.3bn roubles, as higher oil prices and a stronger currency offset a fall in gas and oil production of around 3 per cent.

A poll of analysts by Reuters had forecast net income of 68.1bn rubles. Novatek, alongside state-controlled Gazprom and oil producers Rosneft and Lukoil, has been targeted by US sanctions over Moscow’s 2014 annexation of Crimea.

However, the Russian oil and gas industry has thus far outperformed expectations due to domestic refinancing and development of in-house drilling technology to offset the loss of foreign partners. Novatek, 18.2 per cent owned by France’s Total, sold a stake in its Yamal LNG project to China’s Silk Road Fund last March for €1.1bn.

The company said that after stripping out the sale proceeds and normalising exchange rates, net income for the quarter had risen an annual 20.2 per cent.

Copyright The Financial Times Limited 2017. All rights reserved.

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