LUKOIL's Board of Directors met today in Moscow to discuss current issues and approve a concept for LUKOIL's development to the year 2005 with estimates to 2010.

Directors also confirmed the date of LUKOIL's shareholder meeting as June 5, 1997. They decided to set the list of shareholders that may attend on April 7, 1997.

LUKOIL's strategic development concept was compiled on the basis of scientific materials, analytical, statistical and accounting data describing the state of the company and its perspectives for future development. LUKOIL's global strategy consists in developing as a transnational corporation oriented to competitiveness on the world market.

The document includes:

• a management strategy designed to make taking and implementing decisions more effective;
• a financial-management strategy;
• an analysis of the starting conditions for the company's future development, including a marketing forecast;
• the main directions for deepening vertical integration;
• structural growth in reserves;
• structural growth in oil output;
• structural growth in refining;
• structural growth in products sales;
• developing petrochemicals;
• strategic monitoring and rationalization of costs;
• a program to develop the system of material and technical supply and engineering;
• an environment strategy;
• a social strategy;
• a strategy to develop human potential, including internal public relations.

The concept also covers the drafting of a development budget for 1997-2010.

LUKOIL directors said the company will make current payments for federal taxes and to extra-budgetary funds. It has a positive record of making current payments to regional budgets.

Directors also looked at forming a single products pricing strategy for LUKOIL and its subsidiaries.

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