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Lukoil's net profit for 2020 decreased by almost 98%

Full-year free cash flow - the basis for dividend payments - reached RUB 281 billion

Lukoil's net profit for 2020 decreased by almost 98%

Moscow, March 10 - Neftegaz.RU. Due to weaker oil demand and prices in the wake of the coronavirus pandemic, Lukoil's net profit in 2020 fell by 97.6% to RUB 15.2 billion ($205.6 million), compared to a profit of RUB 640.2 billion ($8.6 billion) in 2019.

EBITDA for 2020 amounted to RUB 687.1 billion ($9.2 billion), a decrease of 44.4% compared to 2019.
Besides lower EBITDA, the profit was negatively influenced by non-cash assets impairment and foreign exchange losses.
In 2020, Capex amounted to RUB 495.4 billion ($6.7 billion), which is 10.1% higher than in 2019.

Weaker global economic activity amid the pandemic followed by an unprecedented slump in hydrocarbon demand and prices had a negative impact on operational and financial performance of the Group in the 12 months of 2020 with persisting negative effect in the 1st quarter of 2021.

Due to the OPEC+ agreement, starting from May 1, 2020, Lukoil cut its crude oil production in Russia by approximately 310 000 barrels per day.
Crude oil production was also reduced at certain international projects.
In particular, production at the West Qurna-2 project in Iraq as at the end of 2020 was 90 000 barrels per day lower than the project capacity.

The consequences of the pandemic for the company's operating results in 2020 include:
  • crude oil production cut at the company's fields in Russia and certain international projects due to the new OPEC+ agreement
  • gas production cut in Uzbekistan due to temporarily lower demand for Uzbek gas from China
  • reduction of refinery throughput volumes due to lower refining margins owing to lower demand for refined products;
  • lower sales volumes of motor fuels through filling stations because of lower demand
In 2020 Lukoil´s production of refined products in Europe totaled 16.9 million tonnes, which is 27.4% lower year-on-year due to scheduled maintenance works at refineries in Bulgaria, Italy and the Netherlands, as well as throughput optimization at European refineries.

To read the full story in Russian.

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