Lukoil Gains from Gas Boost (Correction)

(Corrects ruble and dollar values in para 2; percentages unchanged)

Russian producer Lukoil saw earnings rise, thanks in part to 16.2% higher gas output and better prices. The company produced 33.5bn m³, and in Q4 it produced 8.9bn m³, up 4.6% quarter-on-quarter. Uzbekistan was the main driver of growth, where new gas treatment facilities came on stream. Its share of the output at Kandym and Gissar rose to 13.4bn m³ for 2018, up  66.7% on 2017.

Earnings before interest, tax, depreciation and amortisation rose to rubles 1.114.8t trillion ($17bn), which is 34.1% higher year-on-year. High-margin barrels in the total crude oil production, higher gas production in Uzbekistan, higher oil production in Russia in the second half of 2018, lower lifting costs per barrel, as well as higher sales volumes through premium marketing channels all contributed as well as higher prices and a weaker ruble.

Capital expenditure was down 11.7% as gas projects in Uzbekistan were mostly completed. Free cash flow for 2018 amounted to rubles 555.1bn thanks to higher operating cash flow before changes in working capital as well as lower capital expenditure.