LUKOIL said its net profits came in at $1.04 billion in the fourth quarter of 2006, against $1.62 billion in the same period in 2005.
Photo: Grigoriy Sobchenko
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LUKOIL Profits Come Short of Expectations
Russia’s biggest oil producer LUKOIL posted a 16-percent rise in its 2006 net profits on Tuesday, proving once again that the end of the last year was a real disaster for Russian oil companies. The start of 2007 is likely to continue this trend, judging from TNK-BP’s early reports of a three-fold decline in profits in the first quarter of the year.
LUKOIL said its net profits came in at $1.04 billion in the fourth quarter of 2006, against $1.62 billion in the same period in 2005. It also said earnings rose to $16.3 billion, against $15.2 billion in 2005. LUKOIL Deputy CEO Leonid Fedun accounted the results for the Russian taxation system which imposed high duties on the industry in the time of declining oil prices.
All oil companies have experienced a similar slowdown, analysts believe. BP forecasts revenues of its subsidiary, TNK-BP, to fall three-fold in the first quarter, to $162 million, compared to the first quarter of 2006. BP quotes declining oil prices and high taxes as chief reasons for the slump.
In the meantime, investors are recommended to cut their shareholdings in Russian oil producers.
Quotations of oil giants, however, do not show signs of a major decline. LUKOIL’s shares did not fall lower than 1 percent on Tuesday even after the disappointing financial report. Rosneft and Surgutneftegaz are on a rise as the market expects the former to buy major assets of the bankrupt oil giant YUKOS.
www.kommersant.com
All the Article in Russian as of Apr. 25, 2007
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