Lukoil posts 8 pct increase in Q1 net to $3.8Bln

Lukoil, Russia's second-largest oil producer, said Monday that its first-quarter net profit increased by nearly 8 percent, to $3.8 billion on higher oil prices.

The profit rose from $3.5 billion in January-March 2011 to $3.8 billion in the first three months this year, Lukoil said in a statement, beating analyst forecasts. Lukoil also said that the net income was supported by a drop in income tax due to a weaker ruble.

The company's sales went up 19 percent, from $29.6 billion to $35.3 billion in the first quarter of the year. Strong revenues were boosted by sales of refined products (up 28 percent) while crude oil sales added no more than 2 percent.

Oil and gas production inched down 0.7 percent to 2.2 million barrels of oil equivalent, which is mainly attributed to declines at the massive Yuzhnoye Khylchuyuskoye deposit in Russia's Arctic.

Shares of Russia's largest private oil company traded 1.7 percent higher Monday morning at the MICEX stock exchange, outperforming the market.

Lukoil last month began drilling in one of Iraq's biggest and most promising oil fields in the south, West Qurna, where production should reach 150,000 barrels per day by the end of 2013 and as much as 1.8 million barrels per day in 2017.