PJSC LukOil Preliminary Operating Data 1H2020 (5131V)

TIDMLKOD

RNS Number : 5131V

PJSC LukOil

07 August 2020

LUKOIL REPORTS PRELIMINARY OPERATING DATA FOR THE SECOND QUARTER AND SIX MONTHS OF 2020

For the six months of 2020 LUKOIL Group's average hydrocarbon production excluding the West Qurna-2 project was 2,155 thousand boe per day, which is 8.4% lower year-on-year as a result of a significant production cut in the second quarter of 2020. The cut was due to the new OPEC+ agreement and a decrease in gas supply from Uzbekistan to China, that were driven by a negative impact of the COVID-19 pandemic on hydrocarbon demand.

Hydrocarbon production, thousand boe per day

 
 2Q 2020   1Q 2020                                       6M 2020   6M 2019 
--------  --------  ----------------------------------  --------  -------- 
                     Total (excluding the West Qurna-2 
   1,981     2,328    project)                             2,155     2,352 
--------  --------  ----------------------------------  --------  -------- 
 

Oil production excluding the West Qurna-2 project was 40.2 million tonnes for the six months of 2020, which is 5.6% lower year-on-year due to a 12% production cut in the second quarter of 2020 compared to the first quarter. The cut was due to the new OPEC+ agreement concluded in April 2020, that led to limitations on oil production by the Group in Russia and at some international projects.

Oil production, thousand tonnes

 
 2Q 2020   1Q 2020                                            6M 2020   6M 2019 
--------  --------  ---------------------------------------  --------  -------- 
                     Total (excluding the West Qurna-2 
  18,815    21,384    project)                                 40,199    42,598 
  17,877    20,365          Russia                             38,242    40,787 
  17,758    20,227                  Subsidiaries               37,985    40,481 
     119       138                  Share in affiliates           257       306 
     938     1,019          Outside of Russia                   1,957     1,811 
     565       588                  Subsidiaries                1,153       960 
     373       431                  Share in affiliates           804       851 
                     Compensation oil from the West Qurna-2 
   1,065       721    project                                   1,786       775 
  19,880    22,105   Total                                     41,985    43,373 
--------  --------  ---------------------------------------  --------  -------- 
 

Despite a sharp decrease in oil prices and external limitations on production volumes, active development of the priority projects continued. In particular, in West Siberia overall oil and gas condensate production at the V. Vinogradov, Imilorskoye, Sredne-Nazymskoye and Pyakyakhinskoye fields increased for the six months of 2020 by 27% year-on-year and exceeded 2.0 million tonnes.

Further development of the Yaregskoye field and Permian reservoir of the Usinskoye field, including the launch of new steam-generation facilities, allowed to increase high viscosity oil production for the six months of 2020 by 4.5% year-on-year, to 2.5 million tonnes.

Implementation of drilling programs at the V. Filanovsky and Yu. Korchagin fields in the Caspian Sea allowed to maintain production at project levels. Total oil and gas condensate production at these fields for the six months of 2020 was 3.7 million tonnes, flat year-on-year.

The share of the abovementioned projects in the LUKOIL Group's oil production excluding the West Qurna-2 project amounted to 20% for the six months of 2020 as compared to 18% for the six months of 2019.

Gas production, million cubic meters

 
 2Q 2020   1Q 2020                                        6M 2020   6M 2019 
--------  --------  -----------------------------------  --------  -------- 
   6,396     8,412   Total                                 14,808    17,352 
   4,305     4,665          Russia                          8,970     8,856 
   4,284     4,643                  Subsidiaries            8,927     8,812 
      21        22                  Share in affiliates        43        44 
   2,091     3,747          Outside of Russia               5,838     8,496 
   1,933     3,581                  Subsidiaries            5,514     8,172 
     158       166                  Share in affiliates       324       324 
--------  --------  -----------------------------------  --------  -------- 
 

For the six months of 2020, LUKOIL Group's gas production was 14.8 billion cubic meters, which is 14.7% lower year-on-year. The decline was due to lower demand from China for gas produced in Uzbekistan amid the COVID-19 pandemic. At the same time gas production in Russia increased by 1.3% year-on-year driven by the launch of the second stage of the booster compressor station at the Nakhodkinskoye field in December 2019.

Refinery throughput, thousand tonnes

 
 2Q 2020   1Q 2020                                                6M 2020   6M 2019 
--------  --------  -------------------------------------------  --------  -------- 
  13,525    17,090   Total for LUKOIL Group refineries             30,615    33,491 
   9,283    10,937          Russia                                 20,220    21,716 
   4,242     6,153          Outside of Russia                      10,395    11,775 
   3,998     5,590                  Oil processing                  9,588    10,778 
     244       563                  Refined products processing       807       997 
      24        53   Third party refineries abroad                     77     3,231 
--------  --------  -------------------------------------------  --------  -------- 
 

For the six months of 2020 refinery throughput at LUKOIL Group's refineries was 30.6 million tonnes, which is 8.6% lower year-on-year. The decline was due to scheduled maintenance works and throughput optimization at some of the Company's refineries in the second quarter of 2020 on the back of lower demand for petroleum products and decline in refining margins due to the COVID-19 pandemic.

Refinery throughput in Russia for the six months of 2020 decreased by 6.9% due to scheduled maintenance works and throughput optimization at the Nizhny Novgorod and Ukhta refineries in the second quarter of 2020. At the same time, throughput at the Perm and Volgograd refineries remained unchanged compared to the first quarter of 2020. Refinery throughput in Europe for the six months of 2020 decreased by 11.7% due to scheduled maintenance works at refineries in Bulgaria and the Netherlands, as well as throughput optimization at European refineries in the second quarter of 2020.

Note:

LUKOIL will release its Condensed Interim Consolidated Financial Statements prepared in accordance with IFRS and MD&A for the second quarter and six months of 2020 on August 27, 2020.

The information in this press release is an estimate of the LUKOIL Group's results for the second quarter and six months of 2020 and therefore constitutes forward-looking statements. This information is preliminary and based on information available at the date of this document, and may be revised after statistical, financial, tax and accounting statements become available. The information on the LUKOIL Group's operational results in this press release are subject to many external factors which may cause the actual results to differ materially from those expressed or forecasted in this press release for the second quarter and six months of 2020. The LUKOIL Group assumes no obligation to update or alter its forward-looking statements, whether as a result of new information, subsequent events or otherwise, except to the extent required by applicable law.

This document does not constitute or form part of an invitation or inducement to engage in investment activity with, or any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of, the LUKOIL Group, nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of, or any investment in, the LUKOIL Group.

Information about the Company:

PJSC "LUKOIL" is one of the largest publicly traded, vertically integrated oil and gas companies in the world in terms of proved hydrocarbon reserves and production; and the second largest producer of crude oil in Russia. Established in 1991, the Company currently operates in more than 30 countries with core upstream assets located in Russia. The full production cycle includes oil and gas exploration, production and refining; production of petrochemicals and lubricants; power generation; marketing and distribution. The Company's shares are listed in Russia on Moscow Exchange under the ticker "LKOH" and depositary receipts are listed on the London Stock Exchange under the ticker "LKOD".

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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August 07, 2020 06:00 ET (10:00 GMT)