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. Last Updated: 07/27/2016

LUKoil Profit Falls By 23%

LUKoil reported a 23 percent fall in first-quarter net profit to about $1.3 billion on Thursday due to higher export duties, transportation tariffs and operating expenses.

"However, these negative factors were partly offset by increased hydrocarbon production," LUKoil said in a statement.

Crude production rose to 24.4 million tons, up 6 percent on the first quarter of 2006. Total revenues rose to $15.73 billion from $15.04 billion.

ING energy analyst Igor Kurinny said LUKoil had managed to control costs better than expected after increases throughout 2006.

"The results are not likely to excite the market, but there is little to complain about either," he said.

LUKoil deputy CEO Leonid Fedun said the company was holding its costs to a competitive level, although its lifting costs would rise by a similar percentage to the gain in 2006 because of an expected strengthening of the ruble against the dollar. "The company's strategy remains the same: increasing efficiency, reducing costs and improving profitability," he said at a news conference.

Dmitry Loukashov, an energy analyst at Alfa Bank, praised LUKoil for keeping a lid on working capital but was concerned about its capital expenditure of $2.06 billion, which showed the company's plan for $8.2 billion in capex in 2007 was on track. LUKoil's earnings before interest, tax, depreciation and amortization fell 13 percent to $2.43 billion.