Vagit Alekperov, president of Lukoil, is confident that the company will successfully overcome the cycle of low oil prices and continue to implement its strategy, he said in a statement in the company annual report released on Tuesday, as reported by TASS.
“I am sure that we will successfully overcome the next price cycle and continue the implementation of our long-term strategy and sustainable business development,” he added.
Alekperov emphasized that the creation of the shareholder value remains the key objective of the company in any macroeconomic environment. He recalled that 2020 brought the oil industry a shock in the form of a catastrophic drop in hydrocarbon demand due to the coronavirus pandemic.
“This had an extremely negative impact on oil prices and production volumes, both for economic reasons and within the framework of international agreements. In this regard, I want to once again note the high resistance of our business model to such shocks,” he added. Alekperov emphasized that Lukoil is characterized by high operational and financial flexibility, low production costs, a high level of vertical integration, and a very strong financial position.”An additional advantage is provided to us by natural hedging mechanisms in Russia. Such a combination has repeatedly proved its high efficiency. Moreover, in recent years we have significantly improved the qualitative characteristics of our production structure and the produced oil products,” he said.
At the end of 2017, Lukoil approved a medium-term development plan for the company for 2018-2020, as well as a long-term strategy for 2018-2027, which laid down a steady growth in dividends. As Alekperov previously reported, as part of the ten-year program, the company plans to invest $80-85 bln in development, maintain oil production at 100 mln tonnes per year, and increase gas production to 35-40 bln cubic meters.