Russia 's largest private oil company OAO Lukoil Holdings (LKOH.RS) said Friday it expects its oil production in 2011 to fall 5.5% from 2010, and sets output stabilization at its traditional areas of operations and higher free cash flow amid its top priorities for 2012.

The company, which for years has been struggling with a falling oil output at its matured fields in Western Siberia , said its crude oil production in 2011 is expected to be 90.7 million metric tons, of which 84.7 million tons were coming from Russia . The figures, together with the company's priorities for 2012, were presented at the board meeting Friday.

Lukoil said it expects total oil production to stabilize by 2012 and then grow from 2013.

The company said its natural gas output in 2011 is expected to reach 22 billion cubic meters, which is 3.2% higher than in 2010.

Lukoil said in its statement that it expects the overall investments in 2011 to reach $9.8 billion, a 22% rise from 2010.

The company said its priorities for 2012 are stabilization and maintenance of the production volume in the traditional regions of operation, continued implementation of the projects in West Africa , Romania , Uzbekistan and Iraq . The company also aims at modernization of its refineries in Russia . The "maintenance of the competitive level of the return on capital employed, a higher free cash flow and increased return on shareholder value are considered Lukoil's top priorities for 2012," the company said.

Shares in Lukoil were 0.3% down at RUB1756.30 at 1050GMT in Moscow on a marginally higher wider market.

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