Russia’s LUKoil reports drop in annual profits

PanARMENIAN.Net - Russia’s largest privately owned oil producer reported Wednesday, Feb 19, that annual profits declined 28.8 percent last year to $7.8 billion even as the company boosted production, according to RIA Novosti.

The number fell short of analyst forecasts, who on average had predicted $10.4 billion.

LUKoil's revenues slightly beat expectations, increasing 1.6 percent to $141.45 billion, says an earnings report available on the company’s website.

The company said that fourth-quarter profit was negatively impacted by $2.45 billion in non-cash losses due to write-offs for the Arctic oil field South Khylchuyu, as well as West African projects and a Ukrainian petrochemical plant, among others.

Excluding the one-time losses, net profit was down 6.6 percent to $10.28 billion.

LUKoil’s total hydrocarbon production increased 1.5 percent year-on-year to 2.2 million barrels of oil equivalent per day. Crude oil production was up 1.1 percent, and marketable natural gas production – 2.3 percent.

The company is Russia’s second-largest hydrocarbon producer, behind state-controlled Rosneft, and Forbes magazine named LUKoil the largest privately owned company in the country by revenue in September.

CEO Vagit Alekperov owns nearly 21 percent of the company, and its vice president Leonid Fedun – almost 10 percent.