10-07-05 President Olusegun Obasanjo's drive for direct foreign investment in the country has received a major boost with the recent indication of interest by the world’s second largest oil company, Russia's LUKoil to invest in the country's upstream and downstream oil sector.
LUKoil’s interest in the country's oil industry and preparedness to make appreciable investment presence is already manifesting in its recent bid for oil block in the just concluded 2005 bid round.

The Russian company has already indicated interest and is leading a consortium of International and Indigenous Investors to acquire and turn around the 210,000 bpd capacity Port Harcourt refinery that has already been slated for privatisation by the Federal Government.
Already, the oil company, which is working closely with a well resourced indigenous group actively involved in the downstream sector of Nigeria's oil and gas industry including marine tanker transportation and petroleum products trade a well-established Nigerian Group is also hoping to introduce one of its subsidiaries Hitech. The subsidiary is entering the country's oil industry to participate in such areas as designing, installation, building and maintenance of oil pipelines across the country.

The oil company's interest in the country's oil sector is informed by what it believes are fresh investment opportunities brought about by the ongoing economic reform package and more importantly the liberalization of the oil sector ushered in by the Obasanjo-led administration.
In Russia, LUKoil is the leading vertically integrated oil and gas company whose main activities centre around oil and gas exploration and production, refining and sale of petroleum products. By proven reserves, LUKoil is the second largest oil company in the world and has about 1.5 % of global oil reserves and another 2.1 % of global oil production. It dominates the Russian energy sector with 19 % of that country's oil production and an equal percentage of total oil refining capacity. Last year, its proven reserves were estimated at 15,977 mm bbl of crude oil and 24,473 bn cf of natural gas, totalling 20,056 mm boe.

In terms of production assets, its main production flows from such key operation areas as West Siberia that holds 54 % of its reserve and Perm Oblast. It is also the only Russian oil company with significant hydrocarbon reserves in two new oil and gas provinces Timan-Pechora and Northern Caspian. LUKoil is also aiming for a rapid launch of production at fields located in these areas in the next few years to assure successful long term growth.
At the international level, the company is currently carrying out exploration and production projects in Azerbaijan, Kazakhstan, Egypt, North Africa and Columbia in South America. In the downstream oil sector, LUKoil owns significant oil refining capacity both in Russia and abroad. It owns four large capacity refineries in Perm, Volgograd, Ukhta and Nizhny Novgorod.

At an aggregate estimate, LUKoil’s refineries have facilities capacity of about 40.8mm tones yearly, this is apart from other refineries that it owns in Ukraine, Bulgaria and Romania with a combined capacity of about 17.8 mm tpy. As 2003 performance records show that 42.3 mm tons of crude oil; an additional 34.3 mm tons were refined by its refineries alone in Russia.
The advantage the oil company brings into the country's oil sector is its subsidiary. Hitech-LUKoil whose expertise and vast experience is expected to highly benefit the country through the creation of job opportunities, development manpower and improve the economy.