-    The Policy regulates "Environmental protection management" (EM) business process.

-    This Policy has been developed based on and in consideration of requirements of the relevant Policy of OAO LUKOIL.

-    The Policy describes HSE targets and objectives in the area of HSE, as well as the main principles followed by the Holding during achievement of the set objectives.

-    All companies of the LOHL Group should follow this Policy in their activities.  As for companies with 50% or less LOHL (or its relevant  subsidiary) ownership in the charter capital, or which operations are conducted on the basis of the basic title documents (PSA, JOA etc.), this document is applied in so far as it does not contradict the documents of incorporation of such companies or provisions of the above title documents.

-    References to regulatory documents: OAO LUKOIL HSE Policy for the XXI Century (Approved by the Board of OAO LUKOIL, Protocol No. 33 of 28.10.2002).

-    The Holding strategic objective is to provide for the dynamic growth of OAO LUKOIL stock value through constant increase of the effective reserves and oil and gas production volumes overseas in the priority areas of operation. One of the tasks being the part of the set objective is the social responsibility and compliance with the highest HSE standards in the regions of presence.

-    The Holding acknowledges its responsibility against the society with respect to employees and public health protection, preservation of proper environment and rational utilization of natural resources. The Holding expects appreciation of complexity and scale of its objectives by the society.

-    The Holding priority HSE tasks are: ensuring safe labor conditions, protection of health of employees and general population in the areas of the Holding operations, the Holding production facilities as well as preservation of natural environment.

-    For this purpose the Holding has a successful, fully functional and constantly improved Integrated HSE Management System (the IMS). The IMS is in the full compliance with the applicable Russian and international laws, based on the best national and international practices and it is certified for ISO 14001 international standard and OHSAS 18001 standard requirements.

-    The Holding’s HSE Policy was developed in full compliance with the strategies of developed countries and Russia in the area of industrial and environmental safety and rational use of mineral resources.

The Company HSE objectives

The Holding policy in the area of industrial, occupational and environmental safety establishes the following objectives:

-    constant improvement of HSE conditions;

-    rationally use and protect mineral resources involved in the production and existing in the regions of the Holding’s operations;

-    achieve industrial and environmental safety level complying with the best parameters of the leading oil companies of the world;

-    elevate industrial and environmental safety of the Holding’s production facilities, reduce negative effects on environment by improving reliability of process hardware, ensuring its safe and accident free operation;

-    stabilize and then reduce the number of spills of oil and oil products, gas leaks as well as reduce the toxicity of emissions, discharges of pollutants and waste materials while increasing production volumes by means of introducing new progressive techniques, hardware, materials and increasing the level of automation of process control;

-    reduce the industrial burden upon the environment, generated as a result of new facilities commissioning, through improvement of the quality of pre-design and design documents preparation and departmental expert assessment;

-    improve the efficiency of industrial safety and environmental monitoring at Company facilities on the basis of implementing modern information technologies, using modern analytical equipment, as well as the methods of technical diagnostics and remote monitoring.

The Company HSE obligations

In order to achieve the established objectives, the Holding assumes the following obligations:

-    establish efficient procedures for preparation and implementation of industrial, occupational and environmental safety programs providing for constant identification and achievement of the most important objectives of industrial and environmental safety at the Holding;

-    take every practical and feasible measure that may prevent accidents and minimize their consequences;

-    observe the order of priority of planned measures and measures being implemented, related to prevention of impact on environment, personnel and general public, over measures designed to eliminate such an impact;

-    achieve consistent and steady improvement of the parameters of the impact imposed by the Holding’s operations, products and services on the environment, personnel and population, as well as consumption of natural resources in full compliance with the modern state of science, equipment and society;

-    conduct constant targeted work designed to reduce losses of oil, oil products and gas and to prevent their emission to the natural environment;

-    introduce state-of-the-art technologies in order to gradually reduce per unit consumption of natural resources, materials and power while maximizing production output;

-    ensure compliance with international, federal, regional and local legal requirements, international agreements governing international oil corporate HSE activities;

-    adopt and implement any managerial and industrial solutions with  mandatory  consideration of ecological aspects of future activities, products and services.

-    assess the impact of the planned types of business activities and services on environment and health of personnel and general public;

-    develop and implement programs designed to reduce unplanned losses in the course  of the Holding’s operations;

-    assess industrial and ecological risks, develop and implement measures for risk minimization and compensations for losses caused by them;

-    constantly improve quality of environment in the areas of Holding’s operations;

-    in HSE activities comply with international standards;

-    to require all contractors performing operations for the Holding and/or its subsidiaries, to apply the same standards of industrial, occupational and environmental safety as accepted at the Holding;

-    involve all the Holding’s personnel in active HSE work and preservation of resources.  For these purposes to implement the relevant incentive measures and to increase the Holding employees and personnel skills;

-    regularly inform all interested parties (community, executive authorities, etc.) about the Holding’s activities in the area of industrial and environmental safety;

-    revise, adjust and improve, when necessary, the Holding’s policy in the area of industrial, labor and environmental safety;

-    communicate all changes in the Safety Policy to all the staff members of the Holding. as well as executive authorities, controlling bodies, partners and other interested parties;

-    publicly render account to shareholders, the Holding’s personnel, as well as the general public on its HSE activities.

-    require from every employee of the Holding that they act in compliance with the existing rules and regulations of labor safety and environmental protection.

The Company HSE activity directions (business processes)

The Company HSE activities are performed in the following directions:

-    industrial safety management;

-    environment protection management;

-    civil defense.

The Company HSE regulatory base

The regulatory base for the operational Holding IS consists of the following documents:

-    this Policy;

-    Provisions on the Integrated System of the Industrial Safety, Labor Safety and Environmental Protection System Management of LUKOIL Overseas Holding Ltd. (Holding ISM Provision), which define the requirements to Integrated System building, the role and place of IS in the Holding management system as well as the principle and organization of IS functioning at the Holding;

-    Procedures and Methodological Instructions developed based on the Holding ISM Provision, containing the detailed descriptions of the order of meeting various requirements of this Policy, Holding ISM Provision and the applicable requirements of OAO LUKOIL, ISO 14001 and OHSAS 18001 international standards.