By Jaime Llinares Taboada

Lukoil PJSC on Friday reported improved earnings for the second quarter, reflecting stronger prices for crude oil and refined products, and higher volumes for oil production, oil trading, refinery throughput and retail sales. Here's what the Russian company had to say:

On 2Q revenue and earnings:

"In the second quarter of 2021, our sales amounted to RUB2,201.9 bln, up 17.3% quarter-on-quarter."

"The growth was mainly attributable to higher prices for crude oil and refined products, higher oil production and trading volumes, as well as higher refinery throughput volumes and retail sales volumes of refined products in Russia and internationally."

"These factors were partially offset by lower refined products trading volumes."

"As compared to the six months of 2020, our sales increased by 53.8% mainly due to higher hydrocarbon prices and ruble devaluation."

"In the second quarter of 2021, Ebitda increased by 8.1% quarter-on-quarter to RUB 339.8 bln."

"Besides higher oil prices, Ebitda of the Exploration and production segment in Russia was positively affected by higher oil production volumes due to the OPEC+ agreement. The growth was constrained by lower positive time lag effect of export duty and MET.

"Outside Russia, Ebitda dynamics was mainly attributable to lower costs at the West Qurna-2 project, as well as lower gas production in Uzbekistan."

"The main growth factors for the Ebitda of the Refining, Marketing and Distribution segment in Russia were higher refining margins and throughput volumes, as well as better results in petrochemicals, lubricants and aircraft fueling. The growth was constrained by lower positive inventory effect at the refineries and lower retail margins."

"Outside Russia Ebitda was lower mainly due to the specifics of accounting for hedging operations in international trading, as well as lower positive inventory effect at the refineries."

On Covid-19 impacts:

"The consequences of the pandemic for the Company's operating results include: crude oil production cut at the Company's fields in Russia and certain international projects due to the OPEC+ agreement; gas production cut in Uzbekistan in 2020 due to temporarily lower demand for Uzbek gas from China; reduction of refinery throughput volumes due to lower refining margins and lower demand for some refined products; and lower sales volumes of motor fuels through filling stations because of lower demand."

"The main impact of the pandemic on the Company's financial performance is attributed to volatility in prices for crude oil and refined products as well as lower production volumes."

On OPEC+ quotas:

"On April 12, 2020 a number of oil-producing countries, including OPEC members and Russia, entered into an agreement that aims to reduce their collective crude oil output starting from May 1, 2020 with subsequent gradual increase."

"Due to the agreement, in May, 2020, the Company cut its crude oil production in Russia by approximately 310 thousand barrels per day as compared to the average daily production in the first quarter of 2020."

"Later the Company has been gradually increasing crude oil production in Russia. As a result, in the second quarter of 2021 the Group's crude oil production in Russia was approximately 170 thousand barrels per day higher as compared to the level of May, 2020."

"Crude oil production was also reduced at certain international projects. In particular, production at the West Qurna-2 project in Iraq in the second quarter of 2021 was approximately 50 thousand barrels per day lower than the project capacity."

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

(END) Dow Jones Newswires

08-27-21 0544ET