Russia's Lukoil Profit Dips

 

Quarterly net profit was 62.57 billion roubles ($962 million), broadly meeting analysts' average forecasts for 62.28 billion roubles.

 

The company also said its operation at the West Qurna-1 oilfield in Iraq, where it was eligible for significantly lower volumes of compensation crude oil in the second quarter, hit profitability.

 

Lukoil's shares fell by 2 percent after the report, before recovering some lost ground. They were down by 1.5 percent on the day.

 

Lukoil, a publicly listed company co-owned by its senior management including billionaire Chief Executive Vagit Alekperov and Vice-President Leonid Fedun, fared better than Russia's largest oil producer Rosneft, whose quarterly profit fell by a third, partly hurt by dollar-denominated debt.

 

The company, pumping around 2 million barrels of oil per day (bpd) - a little less than OPEC member Venezuela does - has been refocusing on upstream both at home and abroad.

 

Lukoil said the production of liquids, such as crude oil and gas condensate, declined in the first half of the year to 349.6 million barrels from 370 million barrels in the year-earlier period.

 

As output slows down, Lukoil will start a drilling programme in Western Siberia in September, aiming to slow down the rate of decline of oil production to 1.5-2.5 percent in 2017 from 6.5-7 percent expected in the region this year.

 

Second-quarter revenue fell 9.3 percent to 1.34 trillion roubles, while earnings before interest, taxation, depreciation and amortisation declined 8.3 percent to 189.57 billion roubles.

 

Lukoil switched to reporting results using International Financial Reporting Standards (IFRS) accounting principles from those generally accepted in the United States (U.S. GAAP) late last year due to domestic regulations.

 

Under the U.S. GAAP, it reported in U.S. dollars.