Speaking to the shareholders, PJSC LUKOIL President Vagit Alekperov outlined that the major achievement in 2017 was an update of Company’s long-term strategy.

The new strategy is based on the conservative price scenario (50 USD per barrel) and bets on qualitative – not quantitive – goals: efficiency, cutting unit costs, ensuring FCF and ROACE growth.

Instead of dynamic overseas expansion, LUKOIL will focus on the sustainable organic production growth in the traditional areas, using leading edge technology in particular. Company will still look into new projects outside Russia – in case they are profitable enough.

In E&P segment, LUKOIL bets on priority projects that allow to rump up high-margin production volumes. These projects combine low unit costs with direct access to the major export destinations.

Development of priority projects allowed Company to increase hydrocarbon production in 2017 by 2.5% to 2.3 mln bpd, raising share of high-margin barrels to 21%.

The main 2017 achievements in the E&P segment were:

• Launching major production facilities at the Gissar cluster of fields and Phase 1 of the Kandym gas processing plant in Uzbekistan
• Discovery of the large oil field Eridu at Block 10 in Iraq
• Obtaining the rightfor exploration and development of Block 12 in the Gulf of Mexico