Conoco may need to take a year-end writedown as large as $1.7 billion as it adjusts the value of its 20 percent interest in Lukoil, according to a note from energy investment bank Simmons & Co Int'l.

As of September 30, Conoco put the book value of its investment in Lukoil at $12.86 billion, according to a filing with the U.S. Securities and Exchange Commission.

On a year over year basis, crude oil prices fell more than 50 percent, while natural gas prices tumbled 25 percent.

The sharp drop in prices will prompt Conoco and other energy companies to test their asset base for impairments, forcing some to reduce book values, analysts said.

Simmons and other analysts said the third largest U.S. oil company may reveal the Lukoil writedown when it releases its interim report later this week.

A spokeswoman at Houston based Conoco declined to comment on the contents of the interim report.

Conoco shares rose 15 cents at $50.62 in afternoon trading on the New York Stock Exchange.

(Reporting by Anna Driver in Houston; Editing by Andre Grenon)