March 14, 2012 / 11:23 AM / in 6 years

UPDATE 1-Russia's LUKOIL woos investors with dividend boost

* LUKOIL to up dividend payouts by 25 pct in 2012

* Eyes 50 pct increase in hydrocarbon production by 2021

* Total capex to exceed $150 billion by 2021 (Adds details, background)

MOSCOW, March 14 (Reuters) - Russia’s No.2 crude producer LUKOIL pledged on Wednesday to sharply increase dividend payouts as it portrayed itself as a “cash cow” for investors after presenting its new strategy.

“The new program focuses on increasing the investment appeal and a dramatic growth of payments to shareholders,” LUKOIL said in a statement.

“Thus, the dividend payments are expected to increase by 25 percent in 2012 year-on-year. In the foreseeable future, the growth of dividend payments may be many-fold compared with those in 2011.”

LUKOIL’s dividend yield has held steady at around 3.5 percent for the past three years, while it has said it would pay out 50.2 billion roubles ($1.7 billion) on its 2010 results, up from 44.23 billion the year before.

The company has been struggling with declining production from its mature fields in Russia and is banking on growth at its foreign project s, which account for around 7 percent of its total crude output.

LUKOIL is planning to increase its hydrocarbon production by 50 percent compared with 2011, while 17 percent of output is expected to come from international projects, the company said of its new strategy.

LUKOIL also said capital expenditure is planned to exceed $150 billion by 2021, about 16 percent of which is to be allocated to refining and marketing. ($1 = 29.4337 Russian roubles) (Reporting by Vladimir Soldatkin; Additional reporting by Tom Bergin in London; Editing by David Holmes)

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