Russia’s oil giant Rosneft on Friday reported a first-quarter loss of 156 billion rubles ($2.1 billion) as a result of an unprecedented slump in global oil demand and a weaker ruble.

The company said it has cut oil and gas condensate output by 2.2 percent from this period last year to 4.64 million barrels per day (bpd), in accordance with a global agreement to curb production. It also plans to cut investment by around $2.7 billion, or 21 percent, this year.

Rosneft CEO Igor Sechin said in a statement that “2020 may become a turning point for the global oil and gas industry. As a result of the global Covid-19 virus pandemic, demand for crude oil has experienced an unprecedented decline, which resulted in a significant drop of energy prices.” 

Sechin added, however, that Rosneft “is better than ever prepared for the external challenges that seriously affect operations of energy companies around the world.”

According to the statement, revenue for the January-March quarter dropped 15 percent to 1.77 trillion rubles ($24 billion) on lower oil prices, while earnings before interest, taxes, depreciation and amortization (EBITDA) fell 44 percent to 309 billion rubles ($4.2 billion). The company’s Q1 net profit amounted to 131 billion rubles ($1.8 billion).

The negative “non-cash items” have not affected Rosneft’s ability to generate free cash flow, which amounted to 219 billion rubles ($3 billion). “Thanks to this, and despite the deterioration of the macroeconomic environment, we continue to reduce our debt burden and to distribute cash to our shareholders,” Sechin said.

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