Russia's top oil producer LUKOIL on Wednesday confirmed details of its 10-year strategy that aims to double daily output to 4 million barrels of oil equivalent -- roughly the amount now produced by Iran.
"The strategy of accelerated growth will place LUKOIL among the largest global energy companies," LUKOIL said in a statement ahead of an investor presentation by chief executive Vagit Alekperov in New York.
The company said it would invest $78 billion under a conservative scenario or $112 billion including acquisitions under an optimistic scenario, with 70 percent of investment going to upstream exploration and development and 30 percent to refining and marketing.
LUKOIL said one of its strategic tasks was to ensure that annual return on average capital employed was no lower than 15-17 percent. It also said it would keep its debt-to-capital ratio below 30 percent.
"Even using a conservative estimate of long-term international oil prices in a range of $35-40 per barrel, the potential for LUKOIL value growth will rise by 2-2.5 times."
Shares in LUKOIL rose 2.2 percent by 1400 GMT, outperforming the broader market <.MCX>.
The strategy presentation by LUKOIL, which is almost 20 percent owned by U.S. major ConocoPhillips
It reported net profit of $4.010 billion and sales of $33.210 billion, slightly beating the consensus estimates of eight analysts polled by Reuters.
The share of gas in overall hydrocarbon production volumes will increase from 6 percent in 2005 to 33 percent in 2016, LUKOIL said, implying oil production of 2.7 million barrels a day if the company hits its overall production target.
It also planned to significantly increase oil refining capacity both in Russia and abroad. It already has refineries in Ukraine and southeastern Europe and has ambitions to expand.
"LUKOIL expects to increase its daily oil refining capacities by more than 70 percent to 2 million barrels by expansion of existing refineries and acquisition of new ones."
The addition of new refineries abroad would cut the share of refining in Russia from 70 percent to 56 percent, it said.
All of the firm's refineries will produce only high-octane gasoline and fuels meeting the Euro-5 standard by 2016, by when LUKOIL plans to have doubled refinery complexity, enabling it to produce twice as much high-quality motor fuel from the same amount of crude oil.
The company also said it was insured for environmental risks up to $15 billion. It planned to spend $1.7 billion on an ecological programme by 2010.
