Lukoil, Russia's largest oil company, forecasts first half pre-tax profits slump 40 per cent to $1.1bn as turnover slipped and costs soared.
Lower oil prices pulled turnover down 3 per cent to $6.7bn while sales, general and administrative costs rose 30 per cent to $1.2bn. The rise in costs was attributed to higher transport tariffs and the appreciation of the rouble against the dollar.
At the same time, extraction costs were pared by 4 cents to $2.98 a barrel. The company said this was a benefit of the ongoing restructuring programme.
Lukoil is moving to boost exports, accelerate development of the most productive fields while shutting in low producers, divesting non-core assets and competitively outsourcing oil field services.