BAKU, Azerbaijan, Mar. 18
By Klavdiya Romakayeva - Trend:
LUKOIL forecasts natural gas production growth of about 10 percent in 2021, mainly due to the recovery or resumption of production in Uzbekistan, Trend reports with reference to a 4Q2020 LUKOIL report.
According to the report, in 2020 LUKOIL saw a decrease in revenues, mainly related to Uzbekistan, which amounts to about 36 billion rubles ($489,000) of lost profits.
It was noted that the company's production performance in 2020 was influenced by external factors beyond its control.
Thus, average daily oil production decreased 9 percent year-on-year due to the OPEC+ agreement. Gas production declined to a greater extent - by 17.5 percent in annual terms due to a decrease in production in Uzbekistan, caused by a temporary decrease in demand for pipeline gas in China. As a result, the company reduced its hydrocarbon production by 12 percent compared to 2019.
Also, in 2Q2020 the company had to cut gas production as gas exports declined and then ceased entirely.
“This is mainly due to a drop in demand for Uzbek gas from China due to the COVID-19 pandemic, as well as a drop in LNG (liquefied natural gas) prices,” the report said.
Exports resumed in September 2020 amid rising LNG prices in Asia and more attractive prices for Uzbek gas. As a result, in 4Q2020, production at the company's assets recovered to design capacity.
Provided that the situation stabilizes in 2021, the company's production in Uzbek fields is expected to amount to about 14 billion cubic meters of gas with a 100 percent share.
Earlier, Gazprom (Russian majority state-owned multinational energy corporation) reported a decrease in gas export revenues by almost 40 percent. At the same time, Uzbekistan imported 237 times more natural gas in 2020 than in 2019.
It was also reported that in 2020 Uzbekneftegaz JSC managed to increase its net profit by 3.6 times, but the company's debts increased 441 times.
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