A statement released Monday by the agency said that the outlook has been changed following analysis of 2004 operational and financial results.
LUKoil's financial flows have risen substantially, due partly to the oil price rise, but also to a 7% production increase, a higher proportion of exported crude, higher oil product prices on the domestic market, and stable expenditure on extraction, despite the ruble strengthening 18.5% in real terms during 2004.
Standard & Poor's also considers LUKoil's strategy for sustaining investment levels to be positive, in that it provides strong long-term growth in oil extraction levels while keeping dividend payouts at moderate levels compared to similar companies.
However, the agency still considers LUKoil's profit level and financial flows to be weak compared to competitors.
