Lukoil’s net profit rises due to higher oil sales

Lukoil posted a net profit of $6.4 billion (590.2 billion Russian rubles) in the first half of 2024, up 4.6 percent from a year earlier, on the back of higher sales volumes, the second largest Russian oil producer said on Thursday.

Lukoil’s net profit beat the average analyst estimate in a poll by Russian news agency Interfax.

Sales revenue rose 20 percent to $47.3 billion (4.333 trillion rubles) amid higher prices and increased sales.

Operating profit and profit before tax at Lukoil also increased in the first half of the year.

Despite higher results, Lukoil has seen setbacks in both its upstream and downstream businesses this year. The company was forced to cut some production due to the OPEC+ agreement to which Russia is a party.

Lukoil was also forced to carry out emergency repairs at refineries following intense Ukrainian drone attacks on Russian oil processing facilities and warehouses.

In January, Lukoil’s NORSI refinery in Nizhny Novgorod was forced to suspend operations due to technical outages. NORSI, which has the capacity to process about 340,000 barrels per day (bpd) of crude oil, is one of the largest refineries in Russia.

In March, the same refinery in western Russia caught fire following Ukrainian drone attacks on Russian refineries and fuel facilities.

Since all of Russia’s major refineries use at least some Western technology, they may have difficulty repairing equipment and facilities that have broken down or been damaged by Ukrainian drone strikes. These attacks took about 14 percent of Russia’s refining capacity offline at the end of March.

Then, in early June, a fire broke out at a Lukoil-run refinery in northern Komi Republic, killing two.

“According to the revised data, it was determined that a fire occurred during routine technical work of a contracting company,” the Russian Emergencies Ministry said at the time.

By Charles Kennedy for Oilprice.com

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