Lukoil Q3 Profit Falls 62%

Lukoil Q3 Profit Falls 62%Lukoil Q3 Profit Falls 62%

Russia's second-biggest oil producer Lukoil said on Monday its third-quarter net profit fell by around 62% year-on-year to $623 million, as it felt the effects of tumbling oil prices.

Russian oil producers have been hit by a decline in oil prices that fell from their peak of $115 per barrel reached in June 2014 to below $45 currently, Bloomberg reported.

During the first nine months of 2015, Lukoil's net income was affected by a twofold decrease in hydrocarbon prices and by a write-off of $371 million related to an exploration project in Romania, the company said. It did not specify the exact effect on third-quarter net income.

Lukoil's revenues fell 40% in July-September to $23.4 billion, in line with market expectations, the company said.

Its earnings before interest, taxation, depreciation and amortization fell 32% to $3.6 billion, beating analysts' forecast of $3.4 billion.

Oil and gas production in the first nine months of the year rose 3.5% to 2.37 million barrels a day. Oil and liquids output increased 3.9% to an average 2.05 million barrels a day, mainly due to growth in Iraq, Lukoil said in the statement.

Analysts have said they would like to hear about the company's investment plans, especially related to its giant West Qurna-2 in Iraq, on the back of falling oil prices.

Bank of America Merrill Lynch believes that the Russian oil firms have a breakeven price of $35 per barrel.

Rosneft, Russia's top listed oil producer by output, registered a 16% decline in third-quarter profit.

Crude prices have fallen to about half the previous year’s level after the Organization of Petroleum Exporting Countries reacted to a global supply glut by defending market share rather than cutting output.

Russian oil and gas producers Bashneft PJSC, Gazprom Neft PJSC and OAO Novatek also reported a decline in profit or a loss in this period.