OAO LUKOIL prepared consolidated financial statements for the first   half of  01 in accordance with US  GAAP. Group's  consolidated net income for 6 months of  01 was $1421 mln.   (98% to the similar period of the previous year).  Income  from operations   and income before taxes came to $1989 and $1845 mln., and increased 5%   and 6%  respectively. Sales  revenue (tax-free) constituted $6273 mln.   (100.4% to the similar period of the previous year). Group's assets  as   of june  30,  01 grew to $19214 mln. (6% increase over 6 months),   stockholders equity - $117  mln. (5%).   World oil  market and macroeconomic conditions in Russia during first   half of  01 resulted in high profitability of operations  and  ensured   further increase of Group's financials.

PRESS   RELEASE November,1    01
LUKOIL'S NET INCOME FOR THE   1ST HALF   OF  01 ACCORDING TO US GAAP       INTERIM CONSOLIDATED FINANCIAL REPORT WAS   $1421   MLN

OAO LUKOIL prepared consolidated financial   statements for the   first half of  01 in accordance with US  GAAP.
Group's consolidated net income for 6 months of 01 was $1421 mln. (98% to the similar period of the previous year). Income   from   operations and income before taxes came to $1989 and $1845 mln., and  increased   5% and 6% respectively. Sales revenue (tax-free) constituted $6273 mln.   (100.4% to the  similar period of the previous year). Group's assets as   of june   30,  01 grew to $19214 mln. (6% increase over 6 months), stockholders   equity   - $117  mln. (5%).

 World oil market and macroeconomic conditions in Russia during first half of  01 resulted in high  profitability of operations   and   ensured further increase of Group's financials. The group's balance  structure and liquidity notably improved profitability of operations and maintained high  liquidity.

The financials grew due to the increase in the   volumes of   production and sales, and cost reduction.  Intensive increase of crude   production (not including the effects of acquisitions and dispositions) by LUKOIL's subsidiaries amounted to 1.6% - oil (38.7 mln. tons) and 6.0%  - gas   (2.6 bln. m3) over first half of  01. The highest increase in crude production was achieved by OAO KomiTEK (+13.9%), OAO "Arkhangelskgeoldobicha" (+50.7%), ZAO "LUKOIL-Perm" (+6.2%), group of   projects on Caspian and  in Azerbaijan (+11.3%).

The increase in drilling for 1st half   year of  01 was 35.9% - to 1.1 mln. meters (29,7% increase in exploration and 37.5% in operational drilling). 365 wells were drilled and completed, 6 new  fields and 5 deposits of hydrocarbons discovered.

Refining throughput on Company's own refineries increased by 9.6%. The increase was solely provided by Company's foreign refineries in CIS countries and Eastern Europe.

Principal marketing subsidiaries of the Company in Russia Europe and US sold 3.4; 0.3 and 1.6 mln. tons of refined products using the   retail networked owned. The number of petrol stations owned and leased carrying the LUKOIL's flag increased up to 2641 units by the middle of 01.  684 petrol stations operated under franchise agreements, including the retail network in Bulgaria.

 0.6 mln. tons of commercial products were produced   by the Company's petrochemical plants in Saratov, Stavropol, Romania,   Bulgaria and Ukraine during the reporting period (25.1% increase). LUKOIL's gas  refineries increased the volume of crude produced up to 0.75 mln.(by 7.5%)

Currently the Company employs 136.5 thousand   persons.

The Company continued to invest heavily in  01.   Group's   total investment exceeded $1402 mln. over the 6 months of  01. The   significant portion of that amounts was invested in newly developed  regions.   We expect that these investments will ensure high long-term competitiveness of the Company under both favorable and unfavorable market conditions.

The interim consolidated financial statements   prepared   according to US GAAP as of and for the period ended June 30,  01 may   be  viewed in full on the Company's web-site (www.lukoil.ru).

The following financial statements were prepared by OAO LUKOIL in accordance with US GAAP and  have not been audited or   reviewed by an outside auditor. If the financial statements are audited in the future, the audit could reveal differences in our financial results and we cannot assure you that any such differences would not be material.
 
 

LUKOIL's FINANCIAL RESULTS US = GAAP
Non-audited
USD million	2000	2001			dynamics
	1 half	1 quarter	2 quarter	1 half	%
Revenues (before = taxes)	6 246	3 057	3 216	6 273	100,4
Income from operating = activity	1 887	867	1 122	1 989	105,4
Amortization and = depreciation	358	217	218	435	121,5
Income before income = taxes	1 735	842	1 003	1 845	106,3
Net income	1 452	690	731	1 421	97,9
Current assets	4 385	6 673	6 913	6 913	103,6
Total assets	14 634	18 095	19 214	19 214	106,2
Current liabilities	3 339	4 048	4 649	4 649	114,8
Total liabilities	5 977	6 971	7 494	7 494	107,5
Stockholder's equity	8 657	11 124	11 720	11 720	105,4
Liabilities and Stockholders'=20 Equity	14 634	18 095	19 214	19 214	106,2
Net cash provided, by = operating=20 activities	915	397	1 098	1 495	163,4
Net cash used in investing = activities=20	(753)	(687)	(664)	(1 351)	179,4
Net cash provided, by = financing=20 activities	220	307	(29)	278	126,4
For information purpose: Cash flows from = operating=20 activities (excluding changes in working capital) =	1 688	848	948	1 796	106,4
EBITDA	2 336	1 084	1 369	2 453	105,0
Capital investment	1 107	713	689	1 402	126,6