"In the coming year, we plan to produce about the same amount as in 1994," he said. LUKoil produced 43.6 million tons of crude oil last year, down from 48.8 million in 1993.
Senior government officials and trade sources said last week that Russia's total crude oil output was likely to level off this year at about 310 million tons, after falling sharply for the past several years. The State Statistics committee has estimated 1994 output at 315.7 million tons, 10 percent down from 1993.
A LUKoil board meeting Friday discussed the company's 1994 performance. "There was a rather critical assessment of the company's activities, with several questions raised about declining output," Vasilenko said.
The evolving structure of LUKoil and the efficiency of links between the company's various units was also discussed. "We should be more strictly vertically integrated to resolve the problems facing us," Vasilenko said.
LUKoil, founded in April 1993, was the first of Russia's vertically integrated companies, each with its own production, refining and marketing units. There are now several such companies, including Yukos, Surgutneftegaz and Sidanko, competing with each other.
Vasilenko said Friday's meeting was attended by managers of three firms with which LUKoil expects to merge under new restructuring proposals -- Permneft, Nizhnevolskneft and Kaliningradmorneftegaz. LUKoil Vice President Leonid Fedun has also named Astrakhanneftegaz as a merger candidate.
The acquisition of Permneft alone would add 8 million tons annually to LUKoil's total output. But Interfax reported earlier this month that Permneft employees had voted to join the Russian-Belarussian company Slavneft.
The government is expected to settle the fate of Permneft and other Russian oil companies early this year by allocating them to existing vertically integrated firms. (Reuters, MT)
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