Early results say enterprises in the LUKOIL group last year generated revenues from sales in Russia and abroad to the tune of 71.7 trillion rubles, or 17.2% more than projected in the company budget. Pre-tax profit last year exceeded 3.5 trillion rubles (excluding LUKOIL Holding), 6% more than envisaged by the company budget.
In 1997, LUKOIL and its subsidiaries produced 62.3 million tonnes of oil, or 6.6% (3.8 million tonnes) up on 1996 levels.
LUKOIL oil refineries last year processed 19 million tonnes of crude. Including Norsi-Oil, this figure exceeded 22 million tonnes, 13.5% more than in 1996. Product yield on crude rose to 76%. Capital expenditures last year jumped 26.5% while the volume of drilling grew by 24.2%.
Working safety conditions have been improved and so have environmental protection measures. The company is working for technological development and better social support for its employees.
LUKOIL's successful development is proved by the fact that its share price has had a 1.8 times increase.
LUKOIL President Vagit Alekperov said at the Board's meeting that the company's key goals in 1998 included maintaining high oil production volumes, increasing the amount of oil refining and sales of petroleum products in Russia, ensuring tight control over production costs and improving the company's financial results.
In 1998, LUKOIL plans to produce more than 62 million tonnes of oil and increase oil refining volumes considerably, primarily at leased refining capacities in regions with the biggest demand for petroleum products. Capital expenditures in production are likely to reach 6.5 billion redenominated rubles. The majority of funds will come from the completion of the company's privatization in general and by promoting LUKOIL’s investment attractiveness.
Pre-tax profit in 1998 is targeted at about 5 billion redenominated rubles, or much more than expected 1997 levels. Revenues in 1998 are expected to reach 94 billion
redenominated rubles, 16% up on expected 1997 levels. The company will continue working to scale down receivables and payables within the consolidated LUKOIL group and to make capital expenditures more effective. LUKOIL will carry out a new restructuring plan and improve its management in order to boost consolidated profit.
The LUKOIL Board set guidelines for its performance in 1998. The company will work further to develop new fields in the Caspian Sea and upgrade oil production processes in Western Siberia and the European part of Russia. LUKOIL will also begin implementing a strategic program for its participation in the development of the oil industry in Arkhangelsk region.
LUKOIL is consistently refurbishing oil refineries and rejuvenating infrastructure for supply of petroleum products. More than 40 new filling stations will be put on line.
In addition, LUKOIL will continue to develop working safety conditions, social protection of employees and environmental protection.
Alekperov said that LUKOIL had successfully achieved targeted key financial and production indicators in 1997 and even outperformed some of them in comparison with 1996. LUKOIL fulfilled its tax obligations and raised earnings while retaining high positions on the domestic and world markets.
The company will continue with this strategy in 1998.
Press Centre OAO "LUKOIL"
phone.: (095)927-1677, fax: (095)927-1653,
E-mail: pr@lukoil.com
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