The revenue of Russia's second-biggest oil-producing company Lukoil declined in the second quarter of 2020, down by 40.8% quarter-on-quarter to 986.4 billion rubles ($13.1 billion), the company announced on Thursday.
The company’s sales for the first six months of 2020 totaled 2,652.4 billion rubles ($35.4 million), down by 33.3% year-on-year.
“Sales dynamics in both periods were negatively affected mainly by lower hydrocarbon prices, lower hydrocarbon production volumes, lower oil and refined products trading volumes, and lower refined product sales volumes through filling stations. These factors were partially offset by ruble devaluation to US dollar,” it said.
Lukoil posted a net loss of 18.7 billion rubles, nearly $250 million, in the second quarter of 2020, and 67.7 billion rubles, nearly $865 million, in the January-June period of this year.
The company had posted a profit of 330.5 billion rubles, nearly $4.4 billion, for the same period of last year.
Lukoil’s production of liquid hydrocarbons, excluding the West Qurna-2 project for the six months of 2020, was 1,676 thousand barrels per day, which is 6.3% lower year-on-year due to a 12.1% production cut in the second quarter of 2020 compared to the first quarter.
The company explained that the cut was due to the recent OPEC+ agreement.
Lukoil’s gas production for the first half of 2020 was 14.8 billion cubic meters, or 14.6% lower year-on-year.
“The decline was due to lower demand from China for gas produced in Uzbekistan amid the COVID-19 pandemic. At the same time gas production in Russia increased by 1.3% year-on-year driven by the launch of the second stage of the booster compressor station at the Nakhodkinskoye field in December 2019,” it added.
Lukoil said it cut its oil production by approximately 310 thousand barrels per day in line with an agreement a number of oil-producing countries, including OPEC members and Russia, signed in April this year.
The company said it increased its crude oil production in Russia in July by approximately 20 thousand barrels per day followed by an increase in August by approximately 60 thousand barrels per day.
The company’s crude oil production was also reduced in some international projects. This was notable particularly in Iraq where there was a drop of approximately 70 thousand barrels per day starting from May 1, 2020, and further fell by an additional 50 thousand barrels per day from mid-June.
By Sibel Morrow