The largest oil company Lukoil writes off its assets

Lukoil – the second large Russian company in terms of proceeds amount, has deprived its property for $2.5 billion. In connection with this, its profitability decreased almost by 30% as compared with the previous year. According to the company, $510 million were written off because of rediscount of the South-Khylchuyuskoye oil field’s geological model. Reevaluation was conducted twice because of primary mistake of geologists.

The enterprise’s accounting under IAS reports that the company’s loss because of the assets devaluation made up $2.47 million. The largest deduction (on the South-Khylchuyuskoye oil field) made up $510 million. In the second half of 2013, 30% of hydrocarbon reserve were taken and 67% were deducted. Today the reserves consist of about 13 million barrels of oil equivalent.