Weaker global economic activity amid the pandemic followed by an unprecedented slump in hydrocarbon demand and prices had a significant negative impact on LUKOIL´s operational and financial performance in 2020 with persisting negative effect in the 1st half of 2021.
In April 2020 OPEC members and Russia entered into an agreement that aims to reduce their collective crude oil output starting from May 2020 with subsequent gradual increase.
Due to the agreement the company cut its crude oil production in Russia by approximately 310 000 barrels per day as compared to the average daily production in the 1st quarter of 2020.
Crude oil production was also reduced at certain international projects.
In particular, production at the West Qurna-2 project in Iraq in the 2nd quarter of 2021 was approximately 50 000 barrels per day lower than the project capacity.
for the 1st 6 months of 2021 free cash flow increased to $5.4 billion as compared to $616 million for the 6 months of 2020.
The growth is attributable to higher operating margins and lower capital expenditures.