31 July 2014, News Wires – Russia’s second-largest oil producer Lukoil will be forced to curb its investment programme due to limited access to financing, its boss was reported as saying on Thursday.
Chief executive Vagit Alekperov also said Lukoil was looking to sell some of its assets in eastern Europe in order “to focus on Russian projects”, Reuter reported.
Russia’s biggest privately-owned oil company, where Alekperov is one of the key shareholders, is not subject to sanctions over Moscow’s role in Ukraine’s crisis.
However, he said that the company is reviewing its development programme to adjust to the broader punitive measures.
“We are looking into several options, and, of course, the fact that the access to financing would be hampered would (lead) to cuts in our costs and investment programmes,” he told reporters.
“The sanctions are related to the country, we are a Russian company. This will impact us, just like everyone else.”
Lukoil had earmarked $20 billion in investments for this year, with the bulk of spending set to go to the huge West Qurna 2 field in Iraq. The company is also set to start production from an offshore field in the Caspian Sea next year.
Lukoil expanded aggressively abroad in recent years to offset oil production declines in Russia where its fields become increasingly depleted.
It also recently acquired several producing assets in Russia and is focusing on domestic projects.
As part of that, Lukoil also sold petrol stations in Ukraine, where pro-Moscow rebels are fighting against the government forces in the east of the country.
Alekperov said that Lukoil may sell some assets in Eastern Europe as well, but declined to elaborate.
The company operates oil refineries in Bulgaria and Romania.
“We are optimising our asset portfolio. Today, the company is focusing on Russian projects,” he said.