'Russia's image may hit sales': Lukoil

Income impact: Vagit Alekperov's Lukoil warns of sales pressure

Lukoil has warned it could face a decline in sales abroad due to Russia's negative public image in other countries, according to a report.

In a quarterly filing for Russian audit standards, the Moscow-headquartered explorer said “a negative perception of Russian Federation's public image in the majority of the company's countries of operations... may lead to a short-term decline in retail sales” by association.

Russia’s largest independent oil producer also said the “negative development of the Ukrainian situation may have a negative impact on macroeconomy...including higher exchange rate volatility and business climate degeneration in general,” according to a report by Dow Jones Newswires.

The warning is being seen as indicating that despite Kremlin assurances to the contrary the Western sanctions against Russia are impacting the whole economy and threatening the companies not directly affected by them, the wire service said.

Last week, Lukoil chief executive Vagit Alekperov was quoted by Reuters as saying that the explorer would look to cut back on its investment programme and could sell more assets in eastern Europe over the fact that the sanctions would limit access to international finance.

"The sanctions are related to the country, we are a Russian company. This will impact us, just like everyone else," he said.

Lukoil itself is not under sanctions the West introduced against Russian officials and corporations in response to the Crimean crisis.

The company is due to release its full second-quarter results later this month.

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