Aug. 31 (Bloomberg) -- OAO Lukoil, Russia’s second-largest oil producer, said profit rose 67 percent in the second quarter after crude prices climbed, outweighing a decline in output. The shares headed for a four-week high.
Net income climbed to $3.25 billion from $1.95 billion, the Moscow-based company said in a statement today. That beat an average estimate of $3.05 billion from six analysts surveyed by Bloomberg News. Sales rose 35 percent to $34.9 billion in the period, Lukoil said.
Lukoil is seeking to expand internationally as the western Siberian fields that traditionally provide over half of its production age and the northern Yuzhnoye Khylchuyu deposit developed with ConocoPhillips yields less crude than expected. Russia, seeking to keep output stable, may lower taxes on oil exporters from Oct. 1 after Prime Minister Vladimir Putin signed off on the first step of tax reform last week.
“The production decline and a minimal increase in spending may indicate the company is waiting for tax sector reform before ratcheting up investments,” Pavel Sorokin, an oil and gas analyst at Alfa Bank, said by telephone today.
Capital expenditures increased 14 percent to $3.57 billion in the first half of the year, Lukoil said in the statement.
The shares advanced 1 percent to 1,744 rubles by 2:20 p.m. in Moscow, poised for their best close since Aug. 3.
Total production fell 4.7 percent to 2.14 million barrels of oil equivalent a day. Oil output declined about 5.5 percent to 1.84 million barrels a day. Gas-available-for-sale output rose 0.3 percent to 4.53 billion cubic meters, the company said.
Urals crude, Russia’s main export blend of oil, climbed 48 percent in the second quarter, averaging $113.73 a barrel in northwestern Europe, the Moscow-based company said.
Lukoil’s exports dropped 15 percent to 62.1 million barrels in the second quarter as domestic refining rose and output fell.
Lukoil has set aside $1.78 billion to buy an undisclosed producing asset, it said. The company initially reported the cash reserve in the first quarter and has yet to reveal the asset it may buy.
OAO Rosneft is Russia’s largest oil producer.
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