Lukoil, Russia's top oil producer, said that first quarter profits probably dropped by three quarters from a year ago, after a slowing world economy slashed oil prices abroad and export limits created a domestic fuel glut, which pushed down prices.
The company expects to report net income of $170 million for the quarter, compared with $690 million, in earnings that will be prepared under US generally accepted accounting principles. Revenue is expected to decline by sixteen percent to three billion dollars.
Russia, which extracts more crude than any country except Saudi Arabia, agreed to curb exports in the first half of 2002 to help OPEC prop up world oil prices. That created a glut in Russia that slashed local prices by more than a half. While world prices rose in the first quarter, they still averaged about a sixth less than the year earlier period.
“Their earnings were hit by both international crude oil prices and by domestic prices for oil products,” said Paul Collison, an analyst at Brunswick UBS Warburg. “They were bound to be weak”
The choice of the city of Helsinki is not incidental as the capital of Finland had hosted US-Soviet negotiations on the limitation of nuclear stockpiles in 1969