(Adds details, shares)
MOSCOW, Aug 15 (Reuters) - Rosneft, Russia'slargest oil producer, said on Monday its second-quarter netprofit fell almost 34 percent to 89 billion roubles ($1.38billion) following a drop in global oil prices.
Rosneft, almost 20 percent owned by BP, is in thespotlight because it is bidding for Bashneft, its smaller peeras the Russian government aims to sell a stake of a 50 percentthis year.
Analysts were expecting state-controlled Rosneft to post netincome of 85 billion roubles in the second quarter, down from134 billion roubles the same period a year ago..
The price of Urals oil blend, Russia's chief commodityexports, fell by 30 percent in the second quarter, year-on-year,due mainly to oversupply and it averaged $46 per barrel.
Rosneft said its April-June revenue declined by 6 percent to1.232 trillion roubles ($19.22 billion).
Its earnings before interest, taxation, depreciation andamortisation, a gauge of operating profit known as EBITDA,increased by 12 percent to 348 billion roubles.
Rosneft became the world's top listed oil firm by outputafter it bought its local competitor TNK-BP for $55 billion in2013. The deal also turned it into one of the most indebtedRussian companies, with only Gazprom ahead.
Rosneft said on Monday that its net debt was at $23.4billion, down from $39.9 billion in the second quarter of lastyear, on the back of cash flow. Rosneft free cash flow was at$1.3 billion in the second quarter of this year.
Capital expenditures totalled 154 billion roubles in thesecond quarter of this year.
"Investments are expected to increase in second half of 2016due to seasonal factors. The growth in spending is expected atabove 30 percent this year", Rosneft said in statement. In 2015capex stood at 595 billion roubles.
Shares in Rosneft rose 2.5 percent by 1455 GMT,overperforming a 0.7 percent rise in the broader Moscow stockmarket.
($1 = 64.0900 roubles) (Reporting by Olesya Astakhova; Writing by Denis Pinchuk;Editing by Katya Golubkova and Keith Weir)