Lukoil’s net profit under Russian Accounting Standards (RAS) in the first quarter of 2023 fell to 104.3 billion rubles. According to the newspaper’s report, this is almost 22% less compared to January-March last year. vedomosti Referring to the company’s report.
“Lukoil’s revenue fell by 37% in the January-March period to 455.8 billion rubles. The cost of sales fell by almost 42% to 309.6 billion rubles, while profit before tax fell by 20% to 128.6 billion rubles,” the message says.
The publication also points out that Lukoil has not yet released data on oil production for the first quarter. At the same time, according to the company’s report, Lukoil’s oil production reached 85 million tons in 2022, an increase of 7.1% compared to the previous year (excluding the Iraq West Qurna-2 project).
“In 2022, oil exports increased by 14.1 percent to 35.4 million tons. The company explained the growth in exports with the increase in its supply to its own refineries in Europe due to the increase in the load of the facilities. At the same time, the oil sales volume abroad, according to the company, was 48.8%. decreased to 47.6 million tons, which is related to the “reduction in the volume of trade with third party sources”.
The publication reminded that from December 5, 2022, the European Union has imposed an embargo on offshore oil supplies from Russia. At the same time, the maximum price level (ceiling) for Russian oil began to work – $ 60 per barrel. According to Valery Andrianov, an expert at the InfoTEK analytical center, Lukoil supplies oil for export at a price below the set ceiling. It also acknowledges that the company also sells some of its raw material volume with reference to the ceiling.
Andrianov noted that Lukoil can use Litasco, the trade division of the company, which acts as the company’s sole international trade operator and handles all deliveries of the group and trade operations outside of Russia, to circumvent the ban on Russian companies to sell oil under subsidiary contracts. ceiling price..
In October 2022, Bloomberg reported that Lukoil plans to split Litasco into two companies. At the same time, one had to work in Dubai, the other in Switzerland, ”the words of the expert in the material.
Andrianov believes that in this way the company will be able to sell its oil through the Dubai division, and without such compliance, through the Swiss division, complying with the requirements of the Russian authorities. He also stressed that the Russian government decree provides for the monitoring of export oil prices, but does not create a mechanism to compel companies to comply with the requirements of the authorities.