Oil company reports 2.5% decline in hydrocarbon production

Russia’s LUKOIL reports its preliminary operating data. As its media release notes, in the first quarter of 2020 company’s average daily hydrocarbon production totaled 2,328K boe per day, which is 2.1% lower year-on-year and 2.5% lower quarter-on-quarter. The decline in production was driven by lower gas supply to China from projects in Uzbekistan due to lower demand because of coronavirus. The negative impact of this factor was partially offset by higher oil production at international projects.

Oil production in the first quarter of 2020 reached 21.4 mio tons, which is 0.7% higher year-on-year. The growth was mainly driven by international projects due to acquisition of a share in the Marine XII project in the Republic of Congo, as well as an increase in production share at PSA projects owing to decline in oil prices. Oil production volumes and dynamics in Russia were defined by the external limitations of production volumes due to the OPEC+ agreement. As a result, production in Russia was almost flat year-on-year.

In the first quarter of 2020, LUKOIL’s gas production amounted to 8.4 bln cubic meters. Gas production in Russia increased by 5.9% year-on-year and by 1.1% quarter-on-quarter. International gas production decreased by 18% year-on-year and by 22.2% quarter-on-quarter. The main decline factor was lower gas demand in China due to the coronavirus.

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