Azernews.Az

MOSCOW – OAO Lukoil Holdings, Russia's largest privately owned oil producer, Tuesday said net profit for the second quarter fell 16% on higher taxes and export duties, a higher ruble and rising transportation costs.

Lukoil, 20%-owned by U.S. oil major ConocoPhillips, said net profit for the three months ended June 30 slipped to $1.95 billion from $2.32 billion in the year-earlier period. That was below a forecast of $2.08 billion from a Dow Jones Newswires survey of eight analysts.

Growth in global oil prices helped drive revenue higher by 29% to $25.85 billion from $20.12 billion. However, Lukoil's oil production continued to fall, as output from new projects failed to offset lower production in Western Siberia – the company's main production region. The company produced 1.951 million barrels a day in the second quarter, compared with 1.985 million barrels a day in the second quarter last year.

"A significant impact on our production in Western Siberia was caused by natural decline rates as well as decrease in the drilling of new wells," the company said.

Lukoil last year presented a new strategy aimed at strengthening its financial position by focusing on high-yield projects and increasing cash flows.

Lukoil's shares underperformed the overall Russian equity market last year but have regained some value lately after the company announced it would buy back 7.6% of its own shares from ConocoPhillips. The U.S. oil major said in March it would sell its entire 20% stake in Lukoil.