ANNUAL REPORT 2005 - Lukoil

ANNUAL REPORT, 2005
as investments in other spheres. The system of continuous staff training, which has been put in place,
aims to ensure that staff acquire the knowledge and professional skills, which they need in their jobs.
The Company uses all modern training tools: seminars, mentoring, training sessions, study periods
abroad, distance learning by computer, and MBA programs. The Company has 20 of its own study
centres, and has created a tradition of study days for top managers.
During 2005 employees who work in sale of fuels and lubricants in Russia and abroad benefited from
practical training and seminars on corporate standards in work with customers at filling stations.
Preparation work was carried out with the executive personnel reserve, who stand ready to assume
roles as top executives in the Company: special programs for development of leadership potential and
management skills have been designed for executives, who are included in this reserve. The Oil &
Gas Business Institute provided professional training to 55 LUKOIL employees, 16 young specialists
studied at the Gubkin State Oil & Gas University, and 9 specialists from LUKOIL oil refining companies
broadened their experience through a period of work for the American company, UOP.
The LUKOIL and ConocoPhillips employee exchange program was developed as part of the strategic
partnership between the two companies. A group of 14 LUKOIL employees went to work in the US
company in May 2005 and 16 advisors from ConocoPhillips are currently working at LUKOIL.
The Company pays special attention to work with young specialists. The Company has approved
a new youth program for 2005–2010, and work with higher education establishments continued in
2005. LUKOIL reached strategic cooperation agreements with the Higher School of Economics and
the Finance Academy under the Government of the Russian Federation, as well as pursuing cooperation
with the Gubkin State Oil & Gas University, Perm State Technical University and other education
institutions in Russia and the near-abroad countries.
Restructuring of LUKOIL Group continued in 2005, targeting cost reduction and efficiency improvements.
Measures to optimize and reorganize parts of the Group and to dispose of non-core assets of
LUKOIL companies led to reduction of employee numbers in geological exploration, oil production and
refining compared with 2004, while employment levels in the expanding filling stations segment
increased. In total, Company employee numbers declined by 10.8% in 2005. At the same time struc-
Hydrocarbon Production
per Employee,
thousand boe/employee
Oil Refining per Employee,
tonnes/employee
Revenue per Employee,
$ thousand/employee
6
350
400
5
300
350
4
3
2
1
250
200
150
100
50
300
250
200
150
100
50
0
2003
2004
2005
0
2003
2004
2005
0
2003
2004
2005
70