No. 1, 2006

Alexander Seleznev


Social responsibility before the public is one of the LUKOIL group of companies' distinguishing features

A number of LUKOIL's subsidiaries operate on the territory of Nizhny Novgorod region and parts of the Volga Federal District. Worthy of special attention are LUKOIL-Nizhegorodnefteorgsintez and LUKOIL-Volganefteprodukt. However, even though they are mainly involved in the refining and marketing of petroleum products, the great wealth of these companies lies in their people and their special concern for the prosperity of their respective regions.

LUKOIL is famous for its long traditions of charity work and patronage. The company's subsidiaries traditionally help organizations representing the interests of those citizens who are least protected socially: orphans, veterans, the handicapped, and so on. Funds are earmarked for strengthening the operational basis of law enforcement agencies, along with children's, sporting, and religious organizations.

LUKOIL's social work in the Lower Volga region is based on careful and detailed consideration of the public's needs, and is coordinated with the region's leadership. Thus, in December 2001, an Agreement on Social and Economic Partnership was concluded between LUKOIL and the Nizhny Novgorod region government. Many different areas of charitable work and sponsorship were mentioned in the agreement. Then, on November 25, 2005, LUKOIL President Vagit Alekperov (then visiting Nizhny Novgorod) and Nizhny Novgorod Governor Valery Shantsev signed a new agreement, valid until 2009, on economic and social partnership between the company and the region government. LUKOIL thereby extended its responsibilities toward the Volga capital, demonstrating another time that it had come onto its land with serious intentions and for the long term.

In particular, it was noted in the agreement that LUKOIL would supply petroleum products to public institutions, to residential communities and utilities services, and to the region's agricultural complex under terms of deferred payment during the especially harsh Russian autumn and winter seasons. LUKOIL pledged to consider providing Nizhny Novgorod Region's passenger transportation companies with high-quality and environmentally- friendly fuel. The Company also intends to collaborate with the region government in implementing a program for the development of roadways in the region.

Support for veterans and the handicapped, maintaining public health care, and supporting culture and sports continue to remain issues of high priority among the Company's charity work and sponsorship in the region.

On the basis of the above agreement, a charitable program worked out in 2001 and aimed at financing a number of public health facilities and educational institutions, the areas of physical culture and popular sport, cultural life, socially unprotected segments of the population, and urban infrastructure facilities now suffering from a shortage of funds, will be developed further.

With regard to areas of responsibility, LUKOIL-Nizhnevolzhskneftprodukt's social work has long extended past the borders of Nizhny Novgorod region. In addition to municipal infrastructures in Vladimir, Ivanovo, Vologda, Kostroma, and Yaroslavl regions, and the three national Republics of Mari-El, Chuvashiya, and Mordovia, the company watches out for many of their medical, children's, and sporting establishments.

In 2004 alone, LUKOIL-Volganefteprodukt donated almost 4 billion rubles to budgets at all levels of government. In addition, the company took an active part in the social development of Nizhny Novgorod, and in the implementation of the Nizhny: Capital of the Volga Region program in particular. The lighting for the town's Bolshaya Pokrovskaya main street was renovated using money from the company, and 10 million rubles' worth of sporting goods was purchased for Nizhny Novgorod schools, along with equipment for the region's mobile dental clinics. A large contribution was made by the company to restoration of the Church of John the Baptist, in front of whose white-stone bell tower a copy of Moscow's monument to Minin and Pozharsky was erected in 2005.

LUKOIL-Nizhegorodnefteorgsintez refinery spent around 7 million rubles on charitable work in 2004. In connection with tragic events in North Ossetia alone, 500,000 rubles were transferred to a fund for helping those who suffered in the terrorist attack on the city of Beslan. Neither were the refinery's employees indifferent to the air crash that took place in the Nenets Autonomous Area's village of Varandey on March 16, 2005. The company's workers raised their one day earnings and sent a total of 850,000 rubles to help the survivors and the relatives of the victims. When combined with the contributions from the refinery's service and units support, the sum donated amounted to more than 1 million rubles.

The companies of LUKOIL group operating in the region devote a great deal of attention to the development of physical education and popular sport, especially among adolescents. In 2005, LUKOIL-Volganefteprodukt assumed the responsibility for financing the LUKOIL-Nizhegorodets racing team; by September, LUKOIL-Nizhegorodets drivers were coming first, second, and third in the ring road auto race in Volga automobile class.

In 2004, the well-known Kstovo Academy of Sambo Wrestling celebrated its 40th anniversary. This school is rightfully considered one of Russia's national treasures. The academy is a unique institution at which a child, brought by his parents, can learn one of many different kinds of sport cultivated there. He can also improve his health, become an athlete, receive an education and find a vocation, defend a dissertation, and be awarded an academic degree. Six Soviet and Russian Honored Masters of Sports have been trained within the walls of the academy, along with 20 international-class Masters of Sports, 105 Masters of Sports, and more than 15,000 Candidate Masters of Sports. Its alumni have won a total of 212 medals at world and European championships. Today, the Academy of Sambo is an independent, non-profit organization. It worthily maintains its glorious traditions, and will always enjoy the support of LUKOIL-Nizhegorodnefteorgsintez.

Neither does the refining giant forget about improving the health of its plant workers, for whom sporting and health-building events are held regularly. At the disposal of refinery employees is a gymnasium and stadium, where football, track and field, and winter sports teams train. There is also a highly regarded children's boxing school. A Russian national boxing tournament is held there every year competing for LUKOIL-Nizhegorodnefteorgsintez prizes.

The next charity event in the We're Helping Children series, organized by LUKOIL-Volganefteprodukt, will be held in Nizhny Novgorod's Switzerland Park on June 1, 2006. On International Child Protection Day, the organizers are arranging a party for 100 children of different ages from three orphanages. The event will take place in the park's amusement and games grounds, making it most memorable. A photographer has been invited to the party, and every child will be able to get his own picture taken as a memento of the event.

What would a children's party be without treats candy, soda pop, and ice cream? That afternoon, the Russian Lion restaurant will provide a picnic lunch prepared right in the park. Presents and surprises are being prepared for each child, and the orphanages will be supplied with new appliances, such as refrigerators, microwave ovens, and printers the presents chosen by the directors of the institutions. The employees of the organizing company will also have contributed heavily by collecting books, toys, and other items for the children.

The We're Helping Children party is a charity event whose main aim is to provide support for children from orphanages and shelters, who cannot take care of themselves. The organizers of the event hope thereby to once again stress the social orientation of their companies, and the responsibility business has before the public.

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Oil of Russia, No. 1, 2006
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