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Lukoil to invest $3 bln in refining, chemicals

OAO Lukoil, Russia's biggest oil company, will invest as much as $3 bln in refining and petrochemicals production this year after President Vladimir Putin urged business leaders to develop manufacturing.

Lukoil will spend $2.3 billion to upgrade and expand oil refining and $700 million to develop petrochemicals production, CEO Vagit Alekperov said today in Budyonnovsk in southern Russia, in remarks relayed by spokesman Dmitry Dolgov. Putin called for more investment in manufacturing capacity to wean the country from its dependence on raw materials exports during a meeting with Russia's richest businessmen in the Kremlin on February 6. Russia is the world's biggest producer of crude oil and natural gas. Lukoil will upgrade its facilities using its own cashflow rather than borrowing, Dolgov said. The $3 billion in investments include $200 million for upgrades at its eastern European refineries. The amount doesn't include possible acquisitions or investments in its filling station chains, he said. Last year, Lukoil approved an ambitious $112 billion investment plan to double oil and natural gas output and diversify its business and develop refining, petrochemicals. Lukoil's OOO Stavrolen plant today commissioned a unit to start producing 120,000 tons a year of polypropylene, a base material for thread, pipes and plastic bottles, at a ceremony attended by Alekperov. The unit, in the Stavropol region, which neighbors war-ravaged Chechnya, uses Dow Chemicals technology and will make enough polypropylene and polyethylene to supply all of southern Russia, Alekperov told Putin at the meeting last month. (Bloomberg)