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Lukoil swung to a net loss for the 1st half of 2020

Lukoil swung to a net loss for the 1st half of 2020

Moscow, August 28 - Neftegaz.RU. Lukoil reported on August 27 that weaker global economic activity amid the pandemic, followed by an unprecedented slump in hydrocarbon demand and prices, had a negative impact on operational and financial performance of Lukoil in the 1st half of 2020 with persisting negative effect in the 3rd quarter of 2020.

According to the Lukoil´s statement, the consequences include: oil production cut at the Lukoil's fields in Russia and some international projects due to the new OPEC+ agreement; gas production cut in Uzbekistan due to lower demand for Uzbek gas from China; reduction of refinery throughput volumes due to lower refining margins owing to lower demand for refined products; and lower sales volumes of motor fuels through the company's filling stations because of lower demand.

The company anounced that for the 6 months of 2020, net loss was RUB 64.7 billion ($858 million) versus net profit of RUB 330.5 billion ($4.38 billion) in the 1st half of 2019 for the 6 month of 2019.

Free cash flow was at RUB 81 billion ($1.07 billion) against RUB 308.3 billion ($4.09 billion) in the 1st half of 2019, down by 73.7% year-on-year. EBITDA for the 6 months of 2020 amounted to RUB 295.3 billion, down by 53.2% year-on-year.

In the 1st half of 2020, Lukoil´s sales amounted to RUB 2.65 billion against to RUB 3.97 billion, down by 33.3% year-on-year.

Despite a decrease in oil prices and external limitations on production volumes, active development of the priority projects continued. In particular, in W. Siberia overall oil and gas condensate production at the V. Vinogradov, Imilorskoye, Sredne-Nazymskoye and Pyakyakhinskoye fields increased for the 6 months of 2020 by 27% year-on-year and exceeded 2.0 million tonnes.

Further development of the Yaregskoye field and Permian reservoir of the Usinskoye field, including the launch of new steam-generation facilities, allowed to increase high viscosity oil production for the 6 months of 2020 by 4.5% year-on-year, to 2.5 million tonnes.

Implementation of drilling programs at the V. Filanovsky and Y. Korchagin fields in the Caspian Sea allowed to maintain production at project levels. Total oil and gas condensate production at these fields for the 6 months of 2020 was 3.7 million tonnes, flat year-on-year.

For the 6 months of 2020, Lukoil´s gas production was 14.8 billion cu m, which is 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.

For the 6 months of 2020, production of refined products at LUKOIL's refineries was 28.6 million tonnes, which is 10.0% lower year-on-year.

To read the article in Russian.

Source : Neftegaz.RU