Dec. 16 (Bloomberg) -- OAO Lukoil, Russia’s largest non- state oil producer, is cutting production and investment costs on expectations that oil prices won’t rebound until the middle of 2010 at the earliest.

“According to the forecasts of Lukoil experts, the period of low prices will continue for a minimum of 1 1/2 to two years,” the Moscow-based company said today in an e-mailed statement. “That means the company will have to correct its plans, budget and investment program.”

The company began a “strict” cost-cutting regime in the fourth quarter, reducing production costs and the investment program, according to the statement. Lukoil has no plans to reduce personnel or wages, the company said.

Lukoil plans to delay the start of “major” overseas projects because of the global financial turmoil.

Investment will be reduced during the next two years and the start of “major international projects” will be postponed, Chief Executive Officer Vagit Alekperov told a conference in Moscow yesterday.

To contact the reporter on this story: Lucian Kim at lkim3@bloomberg.net

Last Updated: December 16, 2008 11:15 EST