Is Russia the new Saudi Arabia?

Probably not -- especially as there is plenty of petroleum in places like Canada's oil sands, Venezuela, and perhaps still Saudi Arabia itself. Nevertheless, Lukoil (NASDAQ:LUKOY) looks to have what many Western oil companies wish they had -- huge reserves, good cost control, and solid production growth.

The fact that first-quarter results disappointed people relative to expectations shows just how much is now expected of this large Russian energy player. Sales were up almost 42%, and net profit and EBITDA both rose 43%, but missed estimates by a not-inconsiderable amount. The big culprit is something that many folks who've followed Russia will understand: taxes. Specifically, taxes rose about 45%. Still, paying higher taxes to the Russian government is preferable to seeing them steal and break up your business a la Yukos.

Most of the other performance metrics looked solid this time around. Oil production rose better than 4%, and lifting costs were up 12% -- largely because of the appreciation of the ruble. All in all, then, Lukoil continues to produce more energy (gas production was up almost 98%), and at a reasonable price.

Like peers, including ExxonMobil (NYSE:XOM), Chevron (NYSE:CVX), and the like, Lukoil not only produces oil and gas, but it also refines it and sells the gasoline (and diesel) through its own service stations. To that end, and to address a shortage of refining capacity in Mother Russia, Lukoil is looking to buy refinery assets in Europe. The first target would appear to be BP's (NYSE:BP) Coryton facility in the U.K., which represents about 8% of that country's refinery capacity.

Will Lukoil succeed? I dunno. Britain tends to be a lot more rationale about mergers and buyouts than its Continental peers, but emotions regarding Russian control of European energy assets are still running high. Nevertheless, Lukoil does need to start doing more of these deals. So much of the company's assets are in Russia (including a huge chunk of reserves) that it's something of a risk.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).