Russia LUKOIL sees net profit rising 7 pct in 2007
By Vladimir Soldatkin
MOSCOW, Jan 12 (Reuters) - Russia's second largest oil producer LUKOIL (LKOH.MM) expects its net profit to reach $8 billion in 2007, a 7 percent rise from the previous year, the company's chief executive Vagit Alekperov said on Saturday.
Alekperov, who spoke after the company's board meeting, said the figure could be changed after an auditors' review.
"According to preliminary estimates, profit will be around $8 billion, which is bigger than the previous year," he said.
LUKOIL is expected to publish its financial results for the fourth quarter and the whole of 2007 before April.
In 2006, LUKOIL's net profit rose by 16 percent, year-on-year, to $7.48 billion, but slightly missed analysts' forecasts.
Net profit rose by 2 percent and 8 percent respectively in the third and second quarters of 2007, after it dropped unexpectedly by 23 percent in the first quarter. LUKOIL said that was the result of higher transportation tariffs and operating expenses.
Alekperov said LUKOIL expected its hydrocarbons production growth to accelerate to 5 to 7 percent this year after a rise of 1.6 percent in 2007, when it produced 91.1 million tonnes (1.8 million barrels per day) of oil at its Russian deposits.
The company also produced 5.5 million tonnes of oil outside Russia and 16.4 billion cubic metres of gas last year.
Alekperov said 2008 investment will stay at the 2007 level of $11 billion, of which $300 million will be spent on exploration.
LUKOIL, in which U.S. oil major ConocoPhillips (COP.N) holds 20 percent, said it cut oil exports in 2007 to raise processing by 8 percent to 52 million tonnes and increase sales of refined products, which is more profitable than selling crude.
NEW PROJECTS
Alekperov said the company expected the bulk of this year's planned output growth would come from its Yuzhno-Khylchuyussky deposit in the northern Timano-Pechora region, where it expects to produce 2 million tonnes of oil after a launch this summer.
He also said LUKOIL was discussing with the government of Kazakhstan the possibility of expanding its business in the Central Asian state, a home to LUKOIL's joint venture with India's Mittal Investments and Caspian Investments Resources.
"We are in talks jointly with Mittal and with the government of Kazakhstan and (Kazakh state oil and gas firm) KazMunaiGaz (KMGq.L) on getting Caspian blocks for exploration," Alekperov said without naming the blocks.
LUKOIL said this year it planned to quadruple its oil output in Kazakhstan over the next 10 years to 20 million tonnes per year from the current 5 million tonnes.
Alekperov said he was still hoping to revive a $4 billion Saddam-era deal to develop the vast West Qurna field in Iraq and was going to discuss the issue with Iraqi oil minister during the Davos World Economic Forum to be held on Jan. 25-27. (Reporting by Vladimir Soldatkin; Writing by Tanya Mosolova, Editing by Peter Blackburn)
