February 23, 2012 / 7:51 AM / 6 years ago

UPDATE 1-Lotos writes off $74 mln on delays in upstream

* Lotos books $74 mln loss on delays in North Sea projects

* Q4 net at $30 mln vs. $18 mln expected

* Result boosted by revaluation of reserves

WARSAW, Feb 23 (Reuters) - Poland’s No. 2 refiner Lotos booked a 234 million zlotys ($73.9 million) loss on its North Sea upstream projects on Thursday, fuelling concerns over its ability to quickly find a way to offset poor performance at its ailing refining segment.

The state-controlled company also posted a smaller-than-expected 63 percent net profit drop in the fourth quarter, but it came on the back of a revaluation of its oil reserves rather than the strength of its underlying business, analysts said.

As part of a bid to reduce its reliance on Russian oil and dependence on the fickle refining business, Lotos has been seeking to develop an upstream business and holds stakes in several foreign projects.

“The results clearly signal a difficult macroeconomic environment, the refining segment barely made profit. Upstream was to be the group’s saviour,” said Wojciech Kozlowski, analyst at Espirito Santo in Warsaw.

Talisman Energy, the operator of the Yme oilfield in which Lotos holds a 20 percent stake, warned it could remain offline in 2012.

Lotos had expected production to start by the middle of this year.

Dutch maritime oil and gas engineer SBM Offshore, warned of a hit to its 2011 result stemming from an ongoing dispute over the Yme platform.

Lotos said it earned 94 million zlotys in the last three months of last year compared to 56 million zlotys predicted by analysts. A revaluation of oil reserves boosted the group’s results by 348 million zlotys.

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