Lukoil to halve 2009 spending if oil low
Russia's second biggest oil producer Lukoil could halve its 2009 capital spending programme to $4 billion if the global oil price falls below $45, chief executive Vagit Alekperov said today.
Alekperov said that if Lukoil had to reduce the programme, the cut will mostly be applied to its refining projects and the company was not going to delay the launch of new deposits in west Siberia and the Caspian Sea.
"We have worked out three scenarios with oil price of $80, $65 and $45 per barrel,” Reuters quoted Alekperov as telling reporters.
“At $80 per barrel we will have investment programme of $8 billion, at the next scenario the programme will be less by $2 billion and at $45 billion the figure will be $4 billion.”
Benchmark US crude futures were around $62 a barrel today.
Lukoil said last month its board had slashed the capital expenditures plan for 2009 to 2011 to between $7.5 billion and $9.0 billion per year due to the oil price weakness.
The company’s capex this year is expected to total around $12 billion excluding aqcuisitions.
Alekperov said Lukoil might postpone upgrading catalytic cracking units at its Volgograd and Perm refineries as well as the construction of deep refining complex at its Bulgarian plant.
The company could put off some of it refining projects by two years, he added.
Russian blend crude Urals was traded at $54.84 per barrel yesterday.
Alekperov also said Lukoil could spend on acquisitions the 100 billion roubles ($3.72 billion) it is planning to raise through bond issues.
He could not say what acquisuitions the company was planning to make.
"We have not placed them (the bonds) yet... But we are planning to spend it on acquisitions," Alekperov said.