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Lukoil 2013 Profit Slumps 29% to $7.83 Billion After Impairments

OAO Lukoil (LKOH), Russia’s second-largest oil company, said 2013 profit dropped 29 percent after impairment losses related to Italian and Ukrainian processing, an Arctic oilfield and power assets.

Net income declined to $7.83 billion from $11 billion a year earlier, the Moscow-based company said today in a statement. The impairments had a $2.1 billion impact on net, Lukoil said. The results may not compare to a $10.6 billion average estimate for net adjusted income in a survey of 16 analysts by Bloomberg.

Lukoil, the nation’s biggest oil company after OAO Rosneft (ROSN), turned to acquisitions last year for growth after its Yuzhnoye Khylchuyu field in the Arctic failed to produce as expected and African exploratory wells didn’t find commercial resources. It recognized refining losses as the market in Europe soured and a goodwill expense after its purchase of the ISAB refinery in Italy.

Sales advanced 1.6 percent to $141 billion, Lukoil said.

Oil and gas production climbed 1.5 percent to 2.2 million barrels a day last year. Crude and liquids output rose 1.2 percent to 1.87 million barrels a day, while natural gas available for sale gained 2.3 percent to 20.4 billion cubic meters.

To contact the reporter on this story: Stephen Bierman in Moscow at sbierman1@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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