Profits at Russia's Lukoil up 55%

Lukoil says it is too expensive to export oil to China

Russian oil company Lukoil has beaten forecasts with a 55% rise in third quarter profits.

Rising oil prices and improved cost control helped it earn pre-tax profits of $3bn (£1.7bn), but the firm said it was being hit by a rising "tax burden".

Increased oil export tariffs led it to cut exports by nearly 1 million tonnes in the third quarter of 2005, stopping sales to China altogether.

But it exported more refined products to take advantage of rising prices.

Lukoil said it found 160 million tonnes of new oil and gas reserves in 2005, 50% more than it actually produced.

The company, which is 16% owned by US oil firm ConocoPhillips, said it would increase gas production by 40% in 2006.