Russia’s Lukoil has said its profits in the first three months of this year were down by 59 percent.
During that period crude prices declined to their lowest in over 12 years due to oversupply and the country’s second-largest oil producer also pumped less from its aging fields.
Lukoil daily oil+gas output was down 0.4% yoy in Q1, but thanks to leap year company presented it as rising pic.twitter.com/RogXCJTvZ9— Jack Farchy (@jfarchy) June 6, 2016
In addition the company – which is Russia’s largest private energy firm – blamed fluctuations of exchange rates between the rouble the US dollar and the euro though noted its taxes were lower.
Lukoil did increase output in Iraq where it is helping develop oilfields. Vagit Alekperov, the chief executive and a major shareholder of Lukoil, recently said the Baghdad government is now starting to repay large accumulated debts.
As Iraq repays debt, Lukoil pledges to unlock investment https://t.co/LtgJm1qEza— Reuters Business (@ReutersBiz) June 3, 2016
Alekperov, speaking to Reuters on the sidelines of the June meeting of OPEC, said Lukoil wants to raise drilling volumes by as much as 25-35 percent this year to keep output steady.
Lukoil has also expressed interest in buying smaller rival Bashneft. The government wants to sell the firm to plug budget holes in a rare privatisation move by the Kremlin, which spent the past 15 years raising state control in the oil industry.
“We haven’t done any bidding yet. We haven’t seen any documents on Bashneft that we can study … What matters to us is good economics, not production volumes,” Alekperov explained.
Executing the sale in a transparent and open manner with banks coordinating the process is key for the government to send a strong message to investors, Alekperov said: “It would signal a new era for the development of the private sector in Russia”.