Higher Oil Prices Boost Lukoil's Profits

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Higher Oil Prices Boost Lukoil's Profits

MOSCOW, Russia -- OAO Lukoil, Russia's largest oil producer and operator of more than 2,000 gas stations and convenience stores in the United States, announced that its second quarter profit jumped 65 percent as the company increased its output during the times of high fuel prices, Bloomberg News reported.

Net income for the company rose to $2.32 billion from the $1.41 billion that was recorded a year prior. The net income figures beat eight analysts' estimates for the company surveyed by Bloomberg News. Net sales totaled $18.3 billion from $13.5 billion recorded last year. Total sales for the company rose to $18.4 billion.

"The improvement of our performance resulted from favorable price conditions and increased refining margins, production and refining volumes,'' the company said. "Growth in net income was bounded by growth of taxes linked to international crude oil prices.''

Lukoil is partially owned by ConocoPhillips and produces about a fifth of the oil pumped in Russia, the world's second-biggest supplier, Bloomberg News reported. ConocoPhillips also reported a 65 percent profit increase in July, outpacing income growth at larger oil companies, such as ExxonMobil Corp.

In other Lukoil news, the company has presented a $115 billion investment plan in New York that would increase production to 4.2 million barrels a day of oil and gas, more than doubling current production numbers, Moscow newspaper Vedomosti reported.

Lukoil owns 1.4 percent of the world's refining capacity, Bloomberg News said, and plans to expand its processing and marketing arms in Russia, Europe and the U.S. to sell fuel with higher profit margins. The company came to the United States in 2000, when it purchased 1,300 Getty Petroleum Marketing stations and then bought ConocoPhillips stations in New Jersey and Pennsylvania.