Lukoil to spend most of 550 bln rbl 2017 capex in Russia

MOSCOW, Jun 14 (PRIME) -- Russian oil company Lukoil plans to increase its capital expenditures to 550 billion rubles in 2017 from 511.5 billion rubles in 2016, and to invest the bulk of the sum locally, First Vice President Alexander Matytsyn told reporters on Wednesday.

“Our investment stands at about 550 billion rubles given the current exchange rate, of which about 85% will go into exploration and production, of which about 70% will be spent in Russia,” he said.

Pavel Zhdanov, head of the company’s department for capital markets and M&A, said that Lukoil has significantly cut investment in foreign projects. “The bulk of investment that we plan will go in Russian projects. This is because the Russian oil producing business proved to be significantly more stable against volatility of oil prices,” he said.

Lukoil will optimize the portfolio of foreign projects. “We are carrying on with investment we see as attractive, we are investing in Iranian projects, in Uzbekistan. Other projects are at the stage of consideration. Including consideration with operators of the projects,” he said, adding that the company is waiting for a final investment decision on joint projects with Chevron and Shell in Western Africa.

“Nigeria, Cameroon, Ghana – all these projects are in the stage of waiting for the final investment decision. The project in Romania is at the stage of geological exploration, we continue our participation there. We had a discovery there, and additional exploration is being carried out,” he said.

Matytsyn also said that Lukoil forecasts a 2% contraction of oil production in its main region – Western Siberia – in the mid-term, as the company cannot ensure stable production in the region due to economic reasons and the contraction is economically grounded.

(56.9096 rubles – U.S. $1)

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