OAO LUKOIL held its Annual
General Shareholders Meeting inMoscow today to approve 2007 annual report and
financial statements based on the fiscal year results.
The
shareholders approved dividend distribution based on the Company’s performance
in 2007 in the amount of 42 rubles per ordinary share (38 rubles
in 2006).
The size
of remuneration and compensation of expenses to members of the Board of
Directors and the Audit Commission was also approved. ZAO KPMG was approved as
LUKOIL’s independent auditor. The Annual General Shareholders Meeting also
elected the Board of Directors and the Audit Commission and approved
interested-party transactions.
The
following Board of Directors of OAO LUKOIL was elected by the
shareholders:
|
1. |
Vagit
Yu.
Alekperov |
President
of OAO LUKOIL |
|
2. |
Igor V. Belikov |
Director
of the Russian Institute of Directors |
|
3. |
Donald Evert Wallette, Jr. |
President of Russia/Caspian Region, ConocoPhillips |
|
4. |
Valery
I. Grayfer |
General
Director of OAO RITEK |
|
5. |
Oleg
E. Kutafin |
President
of the Moscow State Academy of Law |
|
6. |
Ravil
U.
Maganov |
First
Executive Vice President of OAO LUKOIL
|
|
7. |
Richard
H.
Matzke |
Former
Vice Chairman of Chevron Corporation |
|
8. |
Sergei
A. Mikhailov |
General
Director of OOO Management-Consulting |
|
9. |
Nikolai
A. Tsvetkov |
Chairman
of the Board of Directors of OOO Upravlyayuschaya kompaniya Evolyutsia
[Evolution Management Holding Company] |
|
10. |
Igor
V. Sherkunov |
Chairman
of the Board of Directors of ZAO Investitsionnaya Gruppa Kapital [Capital
Investment Group] |
|
11. |
Alexander
N. Shokhin |
|
Valery
Grayfer, General Director of OAO RITEK, was elected Chairman of the newly
elected Board of Directors at the Board of Directors Meeting held after the
Annual General Shareholders Meeting.
In their
address to the shareholders, Vagit Alekperov, President of OAO LUKOIL, and
Valery Grayfer, Chairman of the Board
of Directors, pointed out that 2007 had witnessed outstanding financial results
and implementation of new large-scale projects. The Company continued to develop in line with its long-term
strategy and to consolidate its competitive positions on the global energy
market.
In
2007 the
Company’s net profit grew by 27.1% to a record level of USD
9.5 billion. Return on average capital employed came to 22.2%. Operating cash flow was
significantly higher than in 2006, and came to USD 10.9 billion. This enabled
the Company to finance USD 9.1 billion of capital expenditures. Thanks to record
financial results in 2007, the shareholders
were advised to approve the dividends of 42 rubles (USD 1.80) per share, which
is by 10.5% higher than 2006 dividends. Dividend yield will be highest in three
years and come to 2.1%.
The
favorable price environment, i.e., high oil prices and high oil refining margin
were the main factors which accounted for the growth of LUKOIL Group financial
results in 2007. Growth of financial results was also supported by enlarged
scale of Company business. In particular, the Company achieved significant
increase of oil refining volumes. Thus, refining throughputs at Russian
refineries rose almost by 8%, loading of Russian refining capacities reached a
record-breaking 96%, unprecedented in the Company’s history. Besides, unlike
most competitors, LUKOIL continued to increase its hydrocarbon production rate.
LUKOIL Group production came to 2.18 million boe/day in
2007.
There
was positive effect on Company results from work to improve operational and
financial efficiency in all areas of activities. The Company continued to
maintain strict financial discipline. Given a high inflation rate and
considerable US dollar devaluation, LUKOIL exercised efficient control over
production costs. This was achieved mainly through centralized interaction with
contractors and suppliers, use of tender procedures, energy saving, and increase
of labor productivity.
In
the Exploration & Production business segment LUKOIL adhered firmly to its
strategic goals aimed at increasing production volumes and efficiency, expanding
the resource base to ensure long-term sustainable growth. The Company is continuously expanding its
resource base and has completely replaced hydrocarbon production through
increase of proved reserves in each of the last 8 years. Large resource
potential, launch of production in new major projects and accelerated
implementation of gas program make the Company confident that it will achieve
its strategic objectives for growth of hydrocarbon production in the medium
term.
A
particular emphasis should be laid upon development of cooperation with state
companies all over the world. As resource volumes available for private oil
companies diminish, this cooperation is vital for efficient and stable long-term
activities. Partnership with OAO Gazprom and its subsidiaries is of utmost
importance. In 2007 LUKOIL established partnership relations with state
companies of China,
Indonesia and
Qatar.
2007
witnessed a considerable increase in hydrocarbon sales efficiency due to
improvements in price formulas and optimization of supply routes. Thus, net
profit in the gas sector doubled also due to increase in direct sales to end
consumers. Besides, high levels of refining margin in Russia led to 7%
increase in deliveries of crude oil to the domestic market.
In
the Refining & Marketing business segment, the
Company set a high priority on increase of capacities and refining throughput,
improvement of product quality, and development of sales network.
Oil refining volumes at the Group’s own refineries increased almost
