High crude prices are delivering bigger profits for the world’s oil producers and, as Lukoil has proved, owning refining assets helps to push the profits even higher.

This week Lukoil revealed that its net income had increased 61% to $1.41 billion in the second quarter of 2005. The result was partially due to the Russian oil outfit increasing its refining capacity. On releasing its quarterly results, Lukoil also revealed a desire to increase its production capabilities outside of its home state.

It seems that Lukoil already has a target in mind that fulfils its expansion criteria. The Mazeikiu Nafta refinery in Lithuania processes 8.66 million tons of crude and other feedstock in a year and refinery has been looking for a buyer for its majority share ever since owner Yukos, another Russian oil company, went bankrupt last year.

It is estimated that Lukoil and its collaborator Conoco would have to pay in the region of $1.5 to $2 billion for Yukos’ 53.7% stake. To gain full ownership the companies would also have to buy out the remainder from the Lithuanian government.