Russia's second-biggest oil producer, Lukoil, reported on Tuesday that its net profit for the third quarter dropped 12.4 percent compared to the second quarter, as low oil prices and lower international trading volumes affected the company's sales and EBITDA.
Lukoil posted a profit attributable to shareholders of around U.S.$843 million (54.8 billion rubles) for the third quarter, down 12.4 percent on the quarter, and slightly lower than the average estimate of 55.4 billion rubles of analysts polled by Reuters.
Lukoil's sales went down by 2.2 percent quarter-on-quarter, on the back of lower international trading volumes. Earnings before interest, tax, depreciation and amortization (EBITDA) fell 12.5 percent sequentially, mostly due to the negative crude oil export duty time lag effect, which was partially offset by higher refining margins in Russia.
In the first three quarters of the year, between January and September, Lukoil's hydrocarbon production stood at 606.0 million boe, or 2.2 million boe per day, down by 6.4 percent compared to the same period last year. The company attributed the lower production to "lower volumes of compensation crude oil from the West Qurna-2 project, disposal of our share in Caspian Investment Resources Ltd in 2015, as well as natural production decline at our brownfields in West Siberia".
Earlier this month, Russia's energy giant Rosneft joined the ranks of Q3 profit disappointments, after reporting in its latest quarterly financial figures a 71-percent annual drop in net profits to US$400 million (26 billion rubles). The net figure for the January-September period was also lower, by 57.3 percent to US$1.984 billion (129 billion rubles).
Rosneft has been instrumental in Russia's consistently growing crude oil production. Average daily output since January reached 5.21 million barrels of oil equivalent, up by 1.4 percent. During the same period, drilling for production purposes went up by 42 percent, indicating that expansion plans have not been dropped, despite international price trends.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More