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SUSTAINABILITY REPORTSOCIAL AND ECONOMIC PARTNERSHIP WITHREGIONAL AND MUNICIPAL GOVERNMENTS"In response to the new social responsibilitiesof business while equality of access to acceptableemployment and benefits is diminishing, the Companyvoluntarily commits itself to socially responsibleparticipation in the life … of the local populationin the regions of its operation…"LUKOIL Social Code, Part IIThe Company signed its first Cooperative Agreements with Kray,Oblast and Local Administrations several years ago. Usuallyan Agreement confirms a previously existing participation of theCompany in regional social and economic development. Partiesto an Agreement annually analyze the progress of its implementationand prolong the Agreement by special protocols, or negotiatea new one. In 2003 the Company spent over 955 million roubleson partnership and charity, and in 2004 over 1,051 million roubles.Pursuant to its Agreements, the Company funds institutions forhealthcare, education, mass sports, culture, housing and utilities,and important municipal institutions, as well as a number of earmarkedprogrammes that complement the social policies of regionaladministrations. This is the approach the Company finds appropriateat this stage. Total funding for social infrastructure institutionsprovided by the company in 2003 was 1,480 million roubles, and1,364 million in 2004.In accordance with its Agreements, the Company also participatesin federal and regional programmes to supply petroleum productsto consumers involved in providing vitally important services to theregion, that is, to enterprises operating in agriculture, forestry, utilities,transportation and road-maintenance. Petroleum products are30