LUKoil reports increased oil production

LUKoil reports increased oil production

LUKoil, Russia’s second largest oil producer, reported an oil production of 46.69 million tonnes (1.89 million barrels a day) in the first half of this year, a 5.6 percent increase on the year.

LUKoil’s subsidiaries produced 44.89 million tonnes of oil in the first six months of 2006, 6 percent more than in the same period of last year. Oil production in international projects increased by 43 percent, which LUKoil attributes to the acquisition of a 43 percent stake in Nelson Resources Limited at the end of 2005. The average well yield in LUKoil’s Russian projects rose by 2.1 percent to 11.23 tonnes a day.

LUKoil’s gas production more than doubled to 7.74 billion cubic meters from January to June 2006. Production of natural gas almost quadrupled to 5.14 billion cubic meters. The impressive output was due to putting the Nakhodkinskoye gas field into operation , which produced 4.1 billion cubic meters of gas in the first half of this year.

The group’s total production of hydrocarbons in the first six months of 2006 amounted to 2.14 million barrels a day, up 11.9 percent on the year.

Oil refining was up 3.6 percent at 23.32 million tonnes. Refining at LUKoil’s plants in Russia rose by 7.3 percent, thanks to increased margins buoyed by higher oil export duties. Decreased refining at the group’s foreign plants was due to the Odessa Refinery being shut down in 2005 for a large-scale reconstruction and modernization.

LUKoil’s oil production was up 4.6 percent in the first quarter of this year, at 23 million tonnes (169.4 million barrels a day). Gas production in the first three months of 2006 stood at 3.665 billion, an almost double increase from last year. LUKoil President Vagit Alekperov said the company’s oil and gas production was rising steadily, by about 5 percent a year. In 2005 the group produced over 90 million tons of oil and about 8 billion cubic meters of gas.

Vladimir Nekrasov, Senior Vice President of LUKoil, said the company planned to invest $1.826 billion in its oil refining business from 2006 to 2014.

According to LUKoil’s strategic development program, automobile gasoline production will be increased from 3 million tonnes in 2005 to 6.6 million tonnes in 2014. The company wants to increase the quality of its gasoline to Euro 3 standards from 2006 to 2009, and to Euro 4 standards from 2010 to 2012. About $380 million will be invested in the reconstruction of oil refining facilities in Russia this year, Nekrasov said.  (Source: www.rbc.ru)