Both groups' annual results released on February 5 show solid performances. BP's net profit almost trebled to $9.6 billion, while Rosneft's more than doubled to $8.9 billion. BP beat expectations in the fourth quarter in both exploration and refining. Yet in a number of important areas Rosneft's operations are superior. Aside from producing 5.8 million barrels per day compared to BP's overall 3.7 million bpd, its margins are bigger. In 2019 it is anticipated to make a 25 percent EBITDA margin on $133 billion of revenue, against BP's 13 percent.
BP trades on over 12 times its expected earnings for 2019, while Rosneft languishes at less than six times. Rosneft's dividend yield for the same year is almost 9 percent, compared to BP's 6 percent.
The market isn't missing something. The difference between Rosneft and most western oil majors is that the former is largely owned by the Russian state. That means it can be used for geopolitical purposes that go beyond conventional shareholder value. Even though repayments have whittled the $6.5 billion lent to Venezuela's state oil firm down to under half that level, the risk is that a change of government in Caracas leaves Rosneft with big losses.
A more obvious problem is sanctions. The US is already restricting Rosneft's ability to raise long-term finance. While it's unlikely that Washington extends that to actually preventing the Russian group from exporting its products to western markets - as aluminium group Rusal was confronted with last year - that probability is not zero. Until Russia's relations with the West thaw, Sechin will be the more envious oil tsar.
Rosneft's average daily hydrocarbon production was 5.8 million barrels of oil equivalent in 2018, up from 5.7 million in 2017, the company said on Feb. 5. BP's oil and gas production averaged 3.7 million barrels of oil equivalent a day for 2018, up from 3.6 million in 2017.
Rosneft's revenue rose to 8.2 trillion roubles ($133.7 billion) in 2018 from 6 trillion roubles the previous year. In the fourth quarter, revenue fell to 2.2 trillion roubles from 2.3 trillion roubles in the previous three months.
The Russian oil company's full-year net income attributable to shareholders increased to 549 billion roubles ($8.9 billion), from 222 billion roubles in 2017. In the fourth quarter net income fell to 109 billion roubles from 142 billion roubles in the third quarter.
BP's 2018 revenue was $299 billion, up from $240 billion in 2017. Fourth-quarter revenue was $76 billion, down from $79 billion in the previous three months. BP's profit attributable to shareholders was $9.4 billion for the full year, up from $3.4 billion in 2017. It fell to $766 million in the final quarter of 2018 from $3.3 billion in the third quarter.