Lukoil Fourth-Quarter Profit Falls 39% After Impairment Charge
Net income of $1.35 billion compared with profit of $2.19 billion in the same period a year earlier, the Moscow-based company said in a filing today. That missed the average estimate of $2.69 billion in a Bloomberg survey of 15 analysts.
Lukoil recorded an impairment charge of $955 million in the fourth quarter at its OOO Narianmarneftegaz venture with ConocoPhillips. (COP) Lower production at the northern Yuzhnoye Khylchuyu deposit due to “unanticipated geological reasons” resulted in estimated field reserves falling to 142 million barrels at the end of 2011 from 505 million barrels in 2008.
“It’s a paper loss reflecting the problems with the asset which were already in the market,” Artem Konchin, an oil and gas analyst at UniCredit SpA, said by phone from Moscow.
Full-year net income at Lukoil reached a record $10.4 billion. Russian oil producers have posted record earnings for 2011 after unrest in the Middle East pushed average prices for the country’s Urals export blend to more than $100 a barrel. TNK-BP, Russia’s third-largest crude producer, announced record profits yesterday.
Revenue rose to $133.7 billion in 2011 from $105 billion in 2010, Lukoil said.
To contact the reporter on this story: Stephen Bierman in Moscow email@example.com.