- Sputnik International
World
Get the latest news from around the world, live coverage, off-beat stories, features and analysis.

Russia's LUKoil set to increase oil and gas output by 4% in 2007 -1

Subscribe
(Recasts, adds additional information in paras 2-14)

MOSCOW, August 30 (RIA Novosti) - LUKoil [RTS: LKOH], Russia's largest independent crude producer, intends to raise oil and gas output by 4% year-on-year in 2007, the company's chief executive said Thursday.

"The company is operating successfully and we expect hydrocarbon production to expand 4%," Vagit Alekperov told a news conference in Moscow.

The CEO said the company needed to replenish its resource base by geological prospecting, to compensate for the large production rate.

LUKoil, which accounts for about 1.3% of global oil reserves and 2.1% of world crude output, develops its main deposits in Western Siberia. The company contributes 18% to Russia's oil output and 18% to the country's oil refining.

The LUKoil board of directors discussed Thursday the company's preliminary results for the first half of 2007, and also its 2007 budget performance and investment program progress report.

The company said in a statement: "Oil exports by the company's subsidiaries came to 21.8 mln [metric] tons [160 mln bbls] in the first half of 2007, which is 3% less than over the same period in 2006. The decline in exports is accounted for by raised oil refining capacity within Russia under high profit margins."

Oil refining at the company's facilities in Russia grew 10.1% in the reporting period to 20.6 million metric tons, while total refining at the company's Russian and overseas plants gained 7.8% to 25.1 million metric tons, the statement said.

Aggregate oil production by LUKoil Group (production by subsidiaries and LUKoil's share in the production of affiliated companies) increased 3.9% year-on-year in January-June 2007, to 48.5 million metric tons (355 million bbls), including 45.6 million metric tons (334 million bbls) in Russia and 2.9 million metric tons (21.3 million bbls) under foreign projects, the statement said.

LUKoil and U.S.-based ConocoPhillips are expected to sign a contract on the development of three oil and gas blocks in hydrocarbon-rich Turkmenistan in Central Asia, Alekperov said.

"We hope to sign a contract this year," the chief executive said, adding that the contract would involve Turkmenistan's offshore blocks 19, 20 and 21.

Alekperov also said LUKoil could sign a contract on the development of a heavy oil deposit in Venezuela by the end of the year. LUKoil is implementing several projects in the South American country. The Russian company is completing the geological prospecting of the Junin-3 block in the Orinoco heavy oil belt, and is holding talks on setting up a joint venture with the national petroleum company of Venezuela, PdVSA, for the rehabilitation of inactive oil fields. The JV is expected to be set up in 2008.

Alekperov said he intended to gradually increase his stake in the company.

The chief executive, a former deputy Soviet oil minister born in Azerbaijan's capital Baku, is one of LUKoil's largest individual shareholders, and is ranked as the world's 48th richest man by Forbes Magazine, with estimated wealth of $12.4 billion.

LUKoil's majority shareholder (63.3%) is Russia's ING Bank (Eurasia), and U.S. oil major ConocoPhillips has a 20% stake in the crude producer. Alekperov and LUKoil Vice-President Leonid Fedun controlled 16.9% and 8.3% of the company as of April 16, 2007, via ING Bank.

Newsfeed
0
To participate in the discussion
log in or register
loader
Chats
Заголовок открываемого материала