Lukoil outlines plans for the future

Vagit Alekperov, the President of Lukoil, paints a positive outlook for both Russia's oil industry and Russia's largest private oil major.

A conference of the Russian Union of Industrialists and Entrepreneurs has been held in Moscow, with Lukoil President, Vagit Alekperov, addressing participants on the outlook for Russia's oil industry. The head of Russia's largest private oil major was upbeat about the future.

Speaking on his birthday and just a few days before 'National Oilmen Day', the Lukoil chief was upbeat about Lukoil's plans.  He outlined a joint venture with Gazpromneft to focus on offshore and East Siberian exploration and development. It stems from an accord signed in May, which he hopes will be signed by the Gazpromneft board when it next meets on September 3.

He also confirmed the price dispute between Lukoil and monopoly German buyer Sunimex has been resolved.

“The economics of sending oil to Germany was not as good as sending it elsewhere – this includes both the Druzhba and Baltic pipeline systems. We’ve been in lengthy talks with our German partners and, in Germany’s case, there is just one buyer – Sunimex. We have been able to reach an agreement with amended prices and Lukoil is now fulfilling all of its contractual commitments,” informed Vagit Alekperov.

He went on to add that Lukoil is planning to raise production by 4% this year, and highlighted prospective international expansion with exploration and development deals in Venezuela and Turkmenistan. He also added that the Russian major may look at taking a non-controlling stake in Iraq's West Qurna field when that country's new oil law is adopted.

He did sound a note of concern about the perception that Russian oil is divided between state and non-state majors, noting that Lukoil has a number of joint-ventures with state-controlled companies.

“The strengthening of state companies arouses our concern. We wouldn't like companies to be divided into state and private. I think national companies are operating in this country in the interests of the Russian Federation. Lukoil is on excellent terms with Rosneft and Gazprom, with whom the company is implementing joint-ventures. There will be no fears as long as there is logic in the actions,” added Vagit Alekperov.

Alekperov said he was looking to build his stake in Lukoil. Tthe company is poised to tackle new goals such as improving operational efficiency and to developing new oil and gas fields. He wants Russia's largest private oil firm to move from being a simple crude exporter to being a larger supplier of refined, higher value added products.