8 Dec 2009 18:11

Lukoil plans to boost production to 2.7 mln bpd in 2017-2019

MOSCOW. Dec 8 (Interfax) - Lukoil plans to boost commercial hydrocarbon production to 2.7 million barrels per day by 2017-2019, up from 2.2 million bpd previously, Vice President Leonid Fedun said at a press conference.

Fedun also said the oil company's new development cuts investment from $75 billion to $60 billion.

Pretax profit fell $100 million-$120 million short due to pressure from the Federal Antimonopoly Service and $100 million short due to restrictions on gas pipeline access, Fedun said, commenting on the Q3 earnings report to US GAAP.

Fedun said Lukoil has put some gas projects back until later and decided to focus only projects that produce high margins right now.

"We decided to move back development of a portion of the gas structures," he said and specifically mentioned the Caspian, the Central Astrakhanskaya structure and Yamal.

This is due partly to the sharp drop in gas consumption in Europe and to the increase in production of non-conventional gas, particularly in the United States.

"Our country will probably encounter serious problems with gas export before long," he said.

"Given the uncertainty, the decision to move back a number of projects was made," Fedun said. The company will focus on projects with high returns, and overall gas production volumes will continue to rise, he said.

Lukoil's investment in 2010 will total $6 billion, somewhat less than in 2009, Fedun said.

President Vagit Alekperov said previously that Lukoil would maintain investment at about $8 billion in the near term. "We would like to maintain the investment program in 2010 at the level of 2009, about $8 billion," Alekperov said.

Speaking of 2010, Fedun said the company plans to boost liquid hydrocarbon production by 2% compared with 2009.

Meanwhile, he said Lukoil plans to close the purchase of BP's stake in the Lukarco joint venture in the near future.

It was reported earlier that the deal might total $1.5 billion.