Archive

No. 3, 2012

MARIA KOTOVA

PLOTTING A STRATEGIC COURSE


The LUKOIL Annual General Shareholders Meeting has determined the Companys development priorities

THE LUKOIL ANNUAL SHAREHOLDERS' MEETING held on June 27, 2012 in Moscow was a major milestone in the Company's life. The meeting took an objective look at what had been achieved during the year, verified the status of the decisions made earlier and confirmed commitment to the Company management's plan aiming at maintaining the leading position in the industry in the rapidly changing international and domestic market environment.

Vagit Alekperov, President of LUKOIL, delivered a report outlining the Company's performance indicators in 2011 and highlighting future development plans.

Among other things, he pointed out that in 2011 the Company has achieved record-breaking financial results. The net profit of the LUKOIL Group reached $10,357 million. However, many of the Company's fields are in the late stages of production, as a result of which hydrocarbon production decreased by 4.4% for the first time over the past ten years of operation. In response to this challenge in 2011 the Company developed a new strategic program for 2012-2021, the prime objective of which was to ensure stable production growth.

The LUKOIL Annual Shareholders' Meeting approved the 2011 Annual Report and Financial Statement for the fiscal year.

The shareholders have approved dividends to be paid based on the Company financial performance results in 2011 - 75 rubles per an ordinary share, which is 21.7% more than in 2010 (59 rubles). The amount of dividend was calculated on the basis of the sum allocated for the payment of dividends - 63,792,244 thousand rubles, which is 19.13% of the net consolidated profit per U.S. GAAP and 26.29% of the net profit earned by LUKOIL.

The meeting also approved the amount of bonuses and compensations to be paid to members of the Board of Directors, as well as the bonuses payable to members of the Audit Commission.  JSC KMPG was approved as the independent auditor of the Company. The Shareholders' Meeting has endorsed amendments and additions to the Company's Articles of Association, elected the Board of Directors and the Audit Commission, approved the revised the Provision on the Preparation and Arrangement of the General Shareholders' Meeting and the revised Provision on the Board of Directors of the Company, and also approved a related party transaction.

Among other things, the shareholders have approved amendments to the Company's Articles of Association that provided for dividend distribution on a quarterly basis.

The shareholders have elected the following Board of Directors: Vagit Alekperov, President of LUKOIL; Viktor Blazheev, Rector of the O. E. Kutafin Moscow State Academy of Law; Valery Grayfer, Chairman of the Board of Directors of RITEK; Igor Ivanov, President of the Russian Council on Foreign Affairs, former Minister of Foreign Affairs of the Russian Federation and former Secretary of the Security Council of the Russian Federation; Ravil Maganov, First Executive Vice President of LUKOIL; Richard H. Matzke, former Vice-Chairman of the Board of Directors of Chevron Corporation; Sergey Mikhaylov, General Director of JSC Consulting Group; Mark Mobius, Executive Chairman of Templeton Emerging Markets Group; Guglielmo Antonio Claudio Moscato, Chairman of the Board of Directors and CEO of Gas Mediterraneo & Petrolio, former Chairman of the Board of Directors of Eni SpA, former Chairman of the Board of Directors and CEO of AGIP SpA; Ivan Pictet, Member of the UN Investments Committee of the UN Joint Staff Pension Fund Board, Member of the Board of Directors of Blackstone Group International Limited, AEA European Advisory Board, AEA Investors LP Global Advisory Board, Symbiotics, former Senior Managing Partner of Pictet & Cie Bank; Alexander Shokhin, President of the Russian Union of Industrialists and Entrepreneurs, President of the National Research University - Higher School of Economics.

The meeting of the Board of Directors held after the Shareholders' Meeting elected Valery Grayfer its Chairman.



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