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Lukoil Q2 oil production down 11.6% on year to 1.52 mil b/d

August 10/2020

MOSCOW (MRC) -- Russia's second largest crude producer, Lukoil, said Aug. 7 that its oil production, excluding the West Qurna 2 project, fell to 18.82 million mt in the second quarter, in line with deeper cuts under the OPEC+ agreement, reported S&P Global.

This is equivalent to an average of around 1.52 million b/d, down 11.6% on the year and 12% on the quarter.
From May, Russian producers including Lukoil were subject to the strictest output restrictions so far under the OPEC+ agreement as the group attempted to ease market volatility caused by the coronavirus pandemic. The cuts are being eased from Aug. 1.

Output restrictions were also reflected in Lukoil's production in the first half of the year, which was 40.2 million mt, equivalent to an average of around 1.62 million b/d. This was down 5.6% on the year.

Hydrocarbon output averaged 1.98 million boe/d in Q2, down 14.8% on the year, and 15% on the quarter. Hydrocarbon production in H1 fell 8.4% to average 2.155 million boe/d.

"The cut was due to the new OPEC+ agreement and a decrease in gas supply from Uzbekistan to China that were driven by the negative impact of the COVID-19 pandemic on hydrocarbon demand," Lukoil said in a statement.

Lukoil's gas output totaled 6.396 Bcm in Q2, down 23.6% on the year and 24% on the quarter.

Total gas production in H1 fell 14.7% year on year to 14.8 Bcm.

The company's Q2 refining throughput fell 19.6% on the year, and 20.8% on the quarter to 13.525 million mt.

Refining in H1 fell 8.6% to 30.6 million mt.

"The decline was due to scheduled maintenance work and throughput optimization at some of the company's refineries Q2 2020 because of lower demand for petroleum products and a fall in refining margins due to the COVID-19 pandemic," Lukoil said.

As MRC wrote before, the European refineries of Russias No.2 oil producer Lukoil were only processing Russian oil in H2 April-early May, 2020.

We remind that Stavrolen (part of Lukoil), Russia's major polyolefins producer, resumed its polypropylene (PP) production in Budennovsk after a long scheduled turnaround. The plant's customers said Stavrolen had fully resumed its PP production after the long scheduled maintenance by 15 October 2019. The outage began on 6 September. The start-up of the plant"s high density polyethylene (HDPE) production took place with a week delay.

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Lukoil  is one of the leading vertically integrated oil company in Russia. The main activities of the company include operations for exploration and production of oil and gas, production and sale of petroleum products. Lukoil is the second largest private oil Company worldwide by proven hydrocarbon reserves. Lukoil's structure includes one of the largest Russian petrochemical plant - Stavrolen.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, homopolymer PP, HDPE, gas processing, petrochemistry, Lukoyl, Stavrolen, Russia.
Category:General News
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