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26.10.2005 BoD meeting

BoD meeting  

The Board of Directors of OAO “LUKOIL” had an out session today in Usinsk (Komi republic).
It was stated at the session that the oil production in Timan-Pechora province nearly doubled during the period from 2000 to 2004 to reach 11.7 mln tons. The Company expects to produce 12.3 mln tons of oil in that region in 2005. 31 new fields are scheduled to be put into development by the Company in Timan-Pechora province by 2015.
The Board of Directors specified as priorities of its activity in Timan-Pechora region the recovery of the commercial oil reserves which should increase by at least 120 mln tons of oil within the period from 2005 to 2010 as well as raise of the oil production output to the level of 22-23 mln tons per year by 2015. Total investments in Timan-Pechora province by 2015 may reach 197 bln rubles.
The Company also decided to develop a project on increasing the capacity of the Varandey oil terminal up to 12 mln tons per year to be commissioned in 2007.
The hydrocarbons reserves addition is expected to be 1.3 times higher than the production to ensure stable development of the Company in the forward-looking period.
Activities are envisaged for development of new oil and gas regions such as Timan-Pechora oil and gas province, Yamal, Caspian sea. In particular, the major oil production increase is expected to be in Yuzhno-Hylchuiuskoye field in Timan-Pechora region which is being developed jointly with ConocoPhillips.
Accelerating production of gas is also intended, mainly in Yamal. With that, the part of gas in the total production of hydrocarbons by the Company will rise more than twice.
Upgrades of the Company’s refineries in Russia and abroad are scheduled to ensure a significant growth of the high-octane petrol production and provide quality parameters of the engine fuels at the background of rising requirements in the European market. Further development of the retail petrol service stations network is planned mainly in the central region of Russia, Bulgaria and Ukraine.
High results that are scheduled for 2006-2008 allow to anticipate further increment of the shareholding dividends compared to the 2004-2005 level.
The Program of LUKOIL Group strategic development in 2005-2014 provides for increase of the part of gas in the total production of hydrocarbons by the Company up to 33%. In this connection the Board of Directors approved a LUKOIL Group gas sector long-term development program integrated into the Program of LUKOIL Group strategic development in 2005-2014. The main objective of the Program is a rise of the Company price due to the gas reserves commercialization.
Forward-looking statements
Forward-looking statements may contain projections or other statements about future development prospects or future economic performance of OAO LUKOIL. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. The Company is under no obligation to update or alter any forward-looking statements to bring them to conformity with actual outcomes.