ANNUAL REPORT 2005 - Lukoil

Good working conditions, low accident levels and regular medical checks for personnel enable many
LUKOIL subsidiaries to obtain discounts on standard rates for obligatory insurance covering industrial
accidents and job-related illness.
PERSONNEL AND SOCIAL PROGRAMS
LUKOIL acknowledges the prime importance and value of its people, who deserve a large part of the
credit for increases in Company efficiency and shareholder value. We understand that success of the
Company depends to a large extent on the people who work for it. LUKOIL therefore places high
value on the contribution of each employee to the well-being of the Company as a whole. LUKOIL's
social policy aims to improve levels of labour efficiency and social protection of employees. We take
motivation of our personnel seriously and try to ensure that every member of staff has an interest in
the attainment of best results by the Company.
SOCIAL RESPONSIBILITY
We are constantly improving our standards of human resource management, giving the greatest attention
to improvements in the system of incentives for LUKOIL Group employees. In 2005 a system of
result management was designed, which helps attainment of Company business goals by linking them
to areas of employee responsibility. The system uses a differentiated approach to employee incentives
depending on their contribution to improvement of key Company performance indicators.
LUKOIL is aware that incentives do not necessarily have to be financial. National awards were made
to 28 Company employees in 2005 in recognition of professional excellence and conscientious and
productive performance at work. A further 1,533 members of staff won sectoral awards and LUKOIL
itself bestowed marks of distinction on 365 individual employees and 39 groups of employees.
Professional training of staff is seen as essential to Company development. Qualified staff are a major
factor for increasing shareholder value, so investments in training are as important and indispensable
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