Yesterday, OAO LUKOIL's Board of Directors held a meeting in Moscow to approve the LUKOIL Group Strategic Development Program for 2010-2019. The program is a revised version of the LUKOIL Group Strategic Development Program for 2008-2017 approved by the Board of Directors in 2007. The Program was amended to reflect the updated macroeconomic and marketing forecasts in the RF and foreign countries for 2010-2019 in view of the global financial and economic crisis. Considering the economic recession, the ensuing decline in feedstock demand and the instability of the financial and consumer markets, the Company resolved to focus on the growth of free cash flow rather than production growth. The Program's ultimate objective is to ensure competitive profitability through the selection of the most efficient projects.
The Strategic Development Program envisages the following top-priority goals and objectives for LUKOIL Group:
Improved labor performance, enhanced energy efficiency, implicit discipline of capital investments, full-scale deployment of the Company's research and engineering potential, further simplification of the organizational structure and spin-off of non-core activities shall be the key tools for attaining the set objectives.
The return on capital employed matching the leading global oil companies' levels remains a key financial indicator for progress evaluation of the Company's strategy implementation.
The Company plans to use the amplified free cash flow to raise shareholder revenue through larger dividend payments and share buybacks.
The Board of Directors also discussed measures aimed at consolidation of the Company's resource base for 2010-2019. These measures are focused on the implicit execution of the geological exploration programs of LUKOIL Group enterprises for 2010-2019 which ensure a 100% compensation of production with incremental hydrocarbon reserves.
Among others, the following measures are identified as crucial for this purpose:
To attain the defined tasks, the efforts of the respective structural units and subsidiaries of the Company will be concentrated around the selection of highly efficient projects in the Russian Federation and abroad with the aim to achieve full compensation of production with incremental hydrocarbon reserves.
Most Popular Articles
From the Career Center
Jobs that may interest you