Lukoil’s Net Profit Rises on Higher Oil Sales

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

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

Revenues from sales surged by 20% to $47.3 billion (4.333 trillion rubles) amid higher prices and increased sales.

Operating profit and pre-tax profit at Lukoil also rose in the first half of the year.

Despite the higher results, Lukoil has seen setbacks in both the upstream and downstream business this year. The company has had to curtail some output due to the OPEC+ agreement to which Russia is part.

Lukoil has also had to carry out emergency repairs at refineries following intensified attacks by Ukrainian drones at Russian oil processing facilities and depots.

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

In March, the same refinery in western Russia caught fire following attacks by drones from Ukraine on Russian refinery and fuel facilities.

Since all major Russian refineries use at least some part of Western technology, they could struggle to repair equipment and units that broke down or have been damaged by Ukrainian drone attacks. These attacks took an estimated 14% of Russia’s refining capacity offline at the end of March.

Then in early June, a fire broke out at a refinery run by Lukoil in the northern Komi Republic, resulting in two fatalities.

“According to revised data, it was established that a fire occurred during routine technical works by a contracting company,” the Russian Ministry for Emergencies said at the time.

By Charles Kennedy for Oilprice.com

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