Lukoil third-quarter net income slumps 48% as crude, ruble fall
OAO Lukoil, Russia’s second-largest oil producer, said profit declined 48 percent in the third quarter as crude prices fell and ruble weakened.
Net income dropped to $1.62 billion, compared with $3.11 billion a year earlier, the Moscow-based company said in a statement. That missed the $1.73 billion average estimate from seven analysts surveyed by Bloomberg. Revenue rose 6.2 percent to $39 billion.
Russian officials said that the nation’s oil producers will not lower output to counter falling prices ahead of the Organization of Petroleum Exporting Countries meeting today after crude entered a bear market. The country’s largest producer, OAO Rosneft, earlier reported zero profit due to falling prices and a weaker ruble, revaluing debt.
Lower oil prices will probably lead to reduced output in Russia as companies scale back at marginal fields. Lukoil’s domestic production is likely to dip to 85 million metric tons next year as the company cuts spending on wells at some older fields in response to falling prices, Chief Executive Officer Vagit Alekperov said on Nov 21. That amounts to 1.71 million barrels a day, compared with an average of 1.74 million barrels a day for the first 10 months of this year, according to Energy Ministry data.
The company’s total output of oil and natural gas for sale rose 7.4 percent to 2.35 million barrels a day in the third quarter as the company began the investment-recovery phase at its project in Iraq.
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