Lukoil

Foundation of the company

On November 25, 1991, Resolution of the Government of the RSFSR No. 18 on the creation of the LangepasUraiKogalymneft oil concern was issued, which was subsequently transformed into the Open Joint Stock Company LUKOIL Oil Company.

The name LUKOIL is derived from the initial letters of the names of the cities of Langepas, Urai and Kogalym, in which the main oil producing enterprises included in the Company are located. This name was proposed by Ravil Maganov, who at that time was the general director of the Langepasneftegaz enterprise.

About the Company

• 1.0% of global oil reserves and 2.2% of global oil production
• 17.8% of all-Russian oil production and 18.2% of all-Russian oil refining
• company No. 3 among the world's largest private oil companies in terms of proved hydrocarbon reserves
• company No. 6 among the world's largest private oil companies in terms of hydrocarbon production
• the largest Russian oil business group with revenues of more than $100 billion and net profit of more than $9 billion.
• The company, whose shares rank second in terms of trading volumes among shares of foreign companies traded on the London Stock Exchange (IOB), according to the results of 2010.
• leader among Russian companies in information openness and transparency. The first Russian company whose shares received a full listing on the London Stock Exchange
• the only private Russian oil company dominated by minority shareholders
• the largest taxpayer of the Russian Federation. The total amount of taxes paid in 2010 is $30.2 billion.

Board of Directors

• Valery Greifer - Chairman of the Board of Directors
• Vagit Yusufovich Alekperov - Member of the Board of Directors, President of OAO LUKOIL
• Viktor Blazheev - Member of the Board of Directors of OAO LUKOIL, Rector of the Moscow State Law Academy
• Gref German Oskarovich - Member of the Board of Directors of OAO LUKOIL, President, Chairman of the Management Board of Sberbank of Russia
• Igor Ivanov - Member of the Board of Directors of OAO LUKOIL, Professor at the Moscow State Institute of International Relations
• Ravil Ulfatovich Maganov - Member of the Board of Directors, First Executive Vice President of LUKOIL
• Matzke Richard Herman - Member of the Board of Directors, Ex-Vice Chairman of the Board of Directors of Chevron Corporation, ChevronTexaco Corporation
• Sergey Mikhailov - Member of the Board of Directors, Deputy General Director of Capital Management Company LLC
• Mobius Mark - Member of the Board of Directors, Executive President of Templeton Emerging Markets Group
• Moscato Guglielmo Antonio Claudio - Member of the Board of Directors, CEO of Gas Mediterraneo & Petrolio
• Alexander Shokhin - Member of the Board of Directors, President of the Russian Union of Industrialists and Entrepreneurs (Employers)

Board

• Vagit Yusufovich Alekperov - President of the Company
• Sergey Petrovich Kukura - First Vice President (Economics and Finance)
• Ravil Ulfatovich Maganov - First Executive Vice President (Exploration and Production)
• Nekrasov Vladimir Ivanovich - First Vice President (Refining and Marketing)
• Anatoly Barkov - Vice President, Head of the Main Directorate for General Affairs, Corporate Security and Communications
• Vadim Nikolaevich Vorobyov - Vice President - Head of the Main Department for Coordination of Petroleum Products Sales
• Sergey Malyukov - Head of the Main Directorate for Control, Internal Audit and Risk Management
• Ivan Alekseevich Maslyaev - Head of the Main Department of Legal Support
• Alexander Kuzmich Matytsyn - Vice President, Head of the Main Department of Treasury and Corporate Finance
• Anatoly Alekseevich Moskalenko - Head of the Main Personnel Department
• Vladimir Vitalievich Mulyak - Vice President, Head of the Main Directorate for Oil and Gas Production Support
• Valery Subbotin - Vice President, Head of the Main Department of Supply and Sales
• Fedotov - Vice President - Head of the Main Directorate of Economics and Planning
• Leonid Fedun - Vice President, Head of the Main Directorate for Strategic Development and Investment Analysis
• Evgeny Khavkin - Secretary of the Board of Directors - Chief of Staff of the Board of Directors
• Liubov Nikolaevna Hoba - Chief Accountant

Activity

Oil and Gas Production

Oil and gas reserves

In terms of proved hydrocarbon reserves, LUKOIL continues to be one of the leaders among Russian and international companies. The current production of LUKOIL Group hydrocarbons with proven reserves is almost 21 years. For oil, this indicator is 19 years, for gas - 31.

Characteristics of the resource base

As of January 1, 2011, the Company's proved hydrocarbon reserves amounted to 17.255 billion barrels. n e., including 13.319 billion barrels. oil and 23,615 trillion feet of gas.

Most of the Company's proved oil reserves are located in Western Siberia, the Timan-Pechora oil and gas province and the Urals. Most of the proved gas reserves are located in the Bolshekhetskaya Depression, Uzbekistan and the Caspian region.

60% of the Company's proved reserves belong to the category of "developed" (including 66% of oil reserves and 38% of gas reserves). This reserves structure reflects the high potential for increasing the Company's production in the medium term, especially gas production.

Most of the Company's proved reserves belong to traditional reserves. Only about 4% of the Group's proved hydrocarbon reserves are in high-viscosity oil and 4% in offshore fields. This structure allows the Company to effectively control development costs and quickly commission new fields.

Geological exploration

LUKOIL Group organizations in 11 countries carry out geological exploration, the main task of which is to replenish hydrocarbon production with reserves and prepare a raw material base for organizing production and ensuring its accelerated growth in promising regions both in Russia and abroad (Timan-Pechora, North Caspian, Bolshekhet Depression, Ghana). During geological exploration, the Company pays special attention to the use of modern technologies, which makes it possible to significantly increase the efficiency of geological exploration.

The main volumes of geological exploration for oil and gas were concentrated in the regions of Western Siberia, Timan-Pechora oil and gas province and on international projects. The largest exploration projects are the additional exploration of the Central Astrakhan gas condensate field, prospecting in the Caspian Sea to assess the prospects for oil and gas content of the Neocomian deposits of the Rakushechnoye field and Lower Cretaceous and Jurassic deposits on the Ukatnaya structure.

In 2010, the Company significantly increased the volume of 2D seismic surveys, which amounted to 6,178 km, compared to 2,446 km in 2009, in order to identify and detail structures, as well as to prepare for the laying of exploration wells at promising sites. 17% of the work was carried out by international projects due to the expansion of the Company's activities abroad. The volume of 3D seismic work also increased to 5,840 km2, with 30% of the work coming from international projects. In recent years, the quality of such works, the speed of processing and interpretation of data have increased. This is primarily due to the introduction of the latest information technologies. Due to the high quality of seismic exploration, the success rate of exploration drilling across the Group consistently exceeds 70%.

The volume of electrical exploration amounted to 793 km. Vertical seismic profiling, which allows to detail the geological structure around the well already drilled, was performed in 8 wells. Exploration drilling in 2010 amounted to 118.8 thousand meters. The efficiency of geological exploration was 1,143 tons. t per meter of penetration in drilling. In 2010, 32 exploration wells were completed, of which 22 were productive.

In 2010, 6 fields were discovered (Olginskoye in Tatarstan, Dulepovskoye in the Perm Territory, Southeast Kyzylbayrak and West Aralskoye in Uzbekistan, Arcadia in Egypt and Dzata in Ghana), as well as 25 new oil deposits at fields in Western Siberia and Perm Territory.

The increase in proved reserves according to SEC standards as a result of geological exploration and obtaining additional information during production drilling amounted to 625 million barrels. n e. The main organic increase in proven oil reserves was obtained in Western Siberia (68% of the total increase) and in the Komi Republic (12% of the total increase). In 2010, LUKOIL Group spent $435 million on geological exploration.

Russia

In 2010, exploration drilling in Russia amounted to 102 thousand meters, 2D seismic survey volume - 5,076 km, 3D seismic survey volume - 4,116 km2. Exploration costs amounted to $236 million.

International projects

The main task of geological exploration work carried out abroad is to prepare a raw material base for the early organization of production. In 2010, exploration drilling for projects in which the Group participates amounted to 17.3 thousand meters. The Company's share in 2D seismic exploration for international projects amounted to 1,102 km, 3D - 1,724 km2. Exploration costs amounted to $199 million.

As of the end of 2010, LUKOIL Group conducted geological exploration work in 9 countries outside Russia - in Colombia, Kazakhstan, Saudi Arabia, Uzbekistan, Kot-d, Ghana, Egypt, Venezuela and carried out preparations for production in Iraq.

Oil production

2021: Oil production growth by 3%, to 79.3 million tons

Lukoil in 2021 increased oil production by 3% compared to 2020 - to 79.3 million tons. The company notes that this volume does not include the West Qurna-2 project in Iraq. The group published its production results on February 7, 2022.

Taking into account the indicators of the West Kurna-2 project, Lukoil's oil production in 2021 reached 81.14 million tons against 80 million tons a year earlier. The company stressed that despite external restrictions on production volumes, the development of priority projects continued. In particular, in Western Siberia, the total production of oil and gas condensate at the fields named after V. Vinogradov, Imilorsky, Sredne-Nazymsky and Pyakyakhinsky in 2021 increased by 8.1% compared to 2020, to 4.5 million tons.

In general, Lukoil's hydrocarbon production in 2021 amounted to 2.161 million barrels of oil equivalent per day against 2.064 million barrels a year earlier (excluding the West Qurna-2 project). Thus, the growth was equal to 4.7%.

According to a press release, the dynamics of oil production is associated with the OPEC + agreement concluded in April 2020, which led to the limitation of Lukoil's oil production in Russia and on some international projects.

The volume of crude oil processing at Lukoil Group refineries in 2021 amounted to 63 million tons, an increase of 7.4% compared to 2020. The growth in processing volumes in Russia and abroad is associated with an increase in loading due to an improvement in the situation in 2021, as well as scheduled repairs in 2020, the company's press service reports.^[1]

2010-2017

Russia

LUKOIL Group oil production in Russia 2010 amounted to 89,767 thousand tons, including 89,431 thousand tons produced by subsidiaries.

In 2010, LUKOIL subsidiaries and affiliates produced hydrocarbons in Russia at 355 fields. Production drilling volumes in Russia decreased slightly to 2,286 thousand meters. The production well count at the end of 2010 was 28.61 thousand wells, including 24.42 thousand producing products.

For the period January-December 2017, oil production in Russia:

• Rosneft - 210.8 million tons (-0.3%),
• Lukoil - 82.2 million tons (-1.6%),
• Surgutneftegas - 60.5 million tons (-2.1%),
• Gazprom Neft - 59.9 million tons (+ 3.8%),
• TATNEFT - 28.9 million tons (+ 0.9%),
• Novatek - 11.8 million tons (-5.5%),
• Bashneft - 10.4 million tons (-3.4%),
• Russneft - 7.0 million tons (+ 0.2%),
• Neftegazholding - 2.1 million tons (-7.5%).

International projects

Oil production from international projects in LUKOIL Group's share amounted to 6,225 thousand tons, which is 8.3% more than in 2009. Production growth was mainly driven by the Tengiz and Northern Buzachi projects in Kazakhstan, Southwest Gissar in Uzbekistan and Shah Deniz in Azerbaijan.

Production drilling according to the Company's international projects increased by 25.6% compared to 2009 and amounted to 446 thousand meters. The production stock of oil wells increased by 14.2% and amounted to 1,738 wells, the number of wells producing products - 1,583. The Group has commissioned 279 new production wells for international projects.

Gas production

2021: Gas production increased by 11.2% to 32.2 bcm. m

Gas production in average daily terms in 2021 increased by 11.2% compared to a year ago, to 32.2 billion cubic meters. m due to the recovery of gas production in Uzbekistan after a temporary reduction in 2020.

2010-2017

Russia

Sales gas production in Russia in 2010 amounted to 13,635 million m3, which is 27.9% more than in 2009. As of the end of 2010, the Company's production well count in Russia was 306 wells, while the production well count was 213.

Most of the natural gas production in Russia (more than 90%) was provided by the Nakhodkinskoye field of the Bolshekhetskaya Depression. In 2010, it produced 8.2 billion cubic meters of natural gas, 37.1% more than in 2009, as a result of an increase in gas purchases from Gazprom.

Gas production in Russia in 2017 amounted to 690.5 billion cubic meters. m (+ 7.9% vs 2016).

Production indicators of companies in 2017:

• Gazprom - 472.0 billion cubic meters. m (+ 12.4%) or 68.4% of total production in Russia.
• Rosneft - 47.5 billion cubic meters. m (+ 1.8%),
• Novatek - 45.5 billion cubic meters. m (-9.1%),
• Lukoil - 21.1 billion cubic meters. m (+ 14.9%),
• Gazprom Neft - 15.3 billion cubic meters. m (+ 13.4%),
• Surgutneftegas - 10.0 billion cubic meters. m (+ 2.0%),
• Russneft - 2.4 billion cubic meters. m (-1.1%),
• Neftegazholding - 1.4 billion cubic meters. m (+ 0.4%),
• TATNEFT - 0.9 billion cubic meters. m (-3.7%)^[2].

International projects

Sales gas production through international projects in 2010 increased by 16.2% compared to 2009 and amounted to 4,919 million m3. At the same time, the share of natural gas amounted to 86%, having decreased by 6 pp. As of the end of 2010, the Company's production gas well stock under foreign projects amounted to 91 wells, while the production well stock amounted to 73.

The main volume of sales gas production abroad (54%) was provided by the Khauzak-Shady field commissioned at the end of 2007, developed as part of the Kandym-Khauzak-Shady project in Uzbekistan. Production of marketable gas from it increased by 19.2% and amounted to 2.66 billion m3.

Power generation

2022: Increase in energy production from renewable sources by 5% to 1.071 billion kVt·ch

At the end of 2022, the total amount of electricity received from renewable sources by Lukoil Group organizations rose by about 5% compared to 2021. This is stated in the company's Sustainability Report, which was published on July 13, 2023.

The document notes that in 2022, energy generation from renewable sources reached 1.071 billion kVt·ch. For comparison: a year earlier, this figure was 1.021 billion kVt·ch. At the same time, the share of "green" energy in the total volume of generation on an annualized basis has not changed - approximately 4.4%.

One of the main events in 2022 was the end of the implementation of an investment project to modernize the Malaya Krasnopolyanskaya hydroelectric power station on the Beshenka River with the introduction of automated systems and other solutions. In addition, the last stage of expansion of the solar power plant on the territory of the plant in Lobau (Austria) was put into operation. Thanks to the project, the maximum capacity of the site increased to 1.01 MW. A solar power plant was commissioned on the territory of the Krasnodar TPP with a capacity of 2.35 MW. In 2022, a 0.04 MW solar power plant was installed on the roof of the central office of PJSC Lukoil in Moscow: it consists of 156 Russian-made photovoltaic modules. A solar farm with a capacity of 0.047 MW was installed at the Dracevac gas station in the Dalmatia region (Croatia).

The report also said that Lukoil is considering the possibility of building a wind farm on the coast of the Caspian Sea to supply "green" energy to the infrastructure of hydrocarbon production projects. Another project concerns the construction of an offshore wind farm in Azerbaijan.

In general, the installed capacity of Lukoil's generating equipment for the generation of green energy in 2022 reached 420 MW. Of these, 292 MW came from hydropower, 44 MW from solar farms and 84 MW from one wind farm.^[3]

Supply and sale of products

Oil supplies

2022: 14.1% increase in annual oil exports from Russia

According to the results of 2022, LUKOIL increased oil exports from Russia by 14.1% compared to 2021 - up to 35.4 million tons. This is stated in the statements that the company published in early May 2023.

According to Lukoil's materials, the increase in oil supplies abroad is mainly due to an increase in supplies to its own refineries in Europe due to an increase in plant load. In 2022, 1.7 million tons of oil were sold on the domestic market, compared with 2.7 million tons in 2021. The change in sales volumes in the domestic market is associated with an increase in supplies to its own refineries in Russia. The volume of oil sales abroad decreased to 47.6 million tons or 48.8%, which is associated with a decrease in trading volumes by the resource of third parties, the company noted.

Exports of petroleum products from Russia in 2022 increased by 10.5% to 19.4 million tons due to an increase in production volumes, according to Lukoil's materials, excerpts from which are quoted by Interfax. The volume of sales of oil and gas products in 2022 decreased by 24.9%, to 83.1 million tons.

Oil supplies to the group's refineries in Russia in 2022 amounted to 44 million tons, an increase of 3.3% compared to 2021. Oil supplies to the group's European refineries amounted to 24.8 million tons, showing an increase of 35.5%. The increase in oil supplies to refineries, as indicated in the company's materials, is associated with a record refining margin.

The volume of oil sales at Lukoil decreased by 48.5%, to 49.3 million tons. The decrease in the volume of oil trading had a negative impact on the volume of sales. About 96.5% of the indicator (47.6 million tons) fell on foreign countries, 3.5% (1.7 million tons) - on Russia.^[4]

2010

Total volume of oil sales by the Company, including supplies for refining at own and engaged refineries, in 2010 amounted to 114 million tons. At the same time, due to the higher efficiency of oil supplies to the domestic market compared to most areas of supplies to non-CIS countries, significant volumes of oil were reoriented from inefficient export directions to the Company's refineries and sales on the domestic market of the Russian Federation.

Oil supplies to LUKOIL Group's foreign refineries, ISAB and TRN complexes [1] in 2010 amounted to 20.97 million tons, which is 15% higher compared to 2009 as a result of the acquisition of a stake in TRN refineries in September 2009. Oil supplies to third-party refineries practically ceased in the reporting year (volume amounted to 0.11 million tons), which was due to the cessation of oil processing at third-party refineries in Belarus at the end of 2009 due to a decrease in the profitability of such operations. In the third quarter of 2010, the Company began processing at a third-party refinery in Kazakhstan.

In 2010, 3.6 million tons of oil were sold on the domestic market, which is 22% more than in 2009. The increase in sales volumes was due to the cessation of oil refining at third-party refineries in Russia and Belarus, which led to the release of an additional resource of oil, which was reoriented to the domestic market.

Gas supplies

The gas business is a new and dynamic segment of LUKOIL Group's operations. Its expansion is one of the strategic objectives and is aimed at commercializing gas reserves and increasing the Company's value.

In 2010, sales of natural, associated petroleum and stripped and dry gas by the Group's Russian entities amounted to 14,087 million m3, which is 29% higher than in 2009. The Group sold 10,051 million m3 of gas to Gazprom (including more than 8 billion m3 of natural gas from the Company's Nakhodka field) and 4,036 million m3 of gas to other consumers. The increase in gas sales is due to an increase in global demand for gas and the corresponding lifting of restrictions on gas reception by Gazprom. In addition, in the reporting year, the supply of associated petroleum gas from the resources of OOO LUKOIL-Western Siberia to ZAO Purgaz was more than tripled due to the launch of the Severo-Gubkinskoye field, which was commissioned in June 2009.

The weighted average price of gas sales in the reporting year increased by 7.4% compared to 2009 and amounted to 1,238 rubles/thousand. m3 (1 148 rubles/thousand m3 to OAO Gazprom and 1,461 RUB/thousand m3 to end consumers), as a result of the increase in the share of highly efficient supplies to end consumers.

In order to minimize costs in the reporting year, the Company carried out preparatory work to conclude contracts for the supply of gas directly to end consumers (in particular, LLC UGK TGK-8), bypassing intermediaries.

Information Technology

Main article: Information Technology at Lukoil

History and Performance Indicators

2023

Profit - 1.16 trillion rubles

At the end of 2023, net profit Lukoil"" reached 1.16 trillion. rubles The results for 2022 were not disclosed, but it is noted that compared to 2021, net profit rose by 48.72%. The corresponding indicators are reflected in the financial report published on March 12, 2024.

Lukoil's revenue in 2023 amounted to 7.93 trillion rubles. This is approximately 16% less than in 2021. Other comprehensive income of the company amounted to 563.39 billion rubles: this item includes foreign exchange income when recalculating foreign transactions, profit from investments, as well as revaluation of the net liability. In 2021, according to this indicator, Lukoil received a loss of 16.29 billion rubles. Lukoil's total total income in 2023 reached 1.72 trillion rubles, which is 2.3 times more than in 2021.

Net profit of Lukoil reached 1.16 trillion rubles

The report says that the management of Lukoil decided not to disclose comparative information for 2022 in the consolidated financial statements, since such information is generally classified by management as sensitive data that were not previously published. This is due, among other things, to the formed geopolitical situation.

It is noted that since December 5, 2022, the United States, Britain, the EU, other G7 countries and Australia have introduced a maximum price of $60 per barrel of oil for sea transportation from Russia to other countries. In addition, from February 5, 2023, the same states additionally introduced a restriction on the price of Russian oil products at the level of $100 per barrel for oil products traded at a premium to oil, and $45 per barrel for oil products traded at a discount to oil. In the future, as stated in the published document, these values ​ ​ can be revised.^[5]

Credit of Azerbaijan Socar for processing the company's oil in Turkey

Lukoil will provide state Socar a 1.5 billion loan to the Azerbaijani oil company as dollars part of a broader deal that will allow Socar's Turkey 200,000 bpd STAR refinery to process Russian oil again, three industry sources familiar with the deal said in October 2023.

The deal would allow Lukoil to get another customer in close proximity to Russian ports after most European oil refiners stopped importing Russian oil under U.S. and allied sanctions.

Bulgaria convinced to refuse oil from Russia at Lukoil refinery

In September 2023, it became known that Bulgaria was convinced to refuse to supply Russian oil, which strikes at the Lukoil refinery. Lawmakers voted to limit the use of Russian oil at Lukoil's refinery to 80% by the end of 2023 and to completely abandon it by October 2024.

This move will force PJSC Lukoil's Neftochim refinery, the largest in Southeast Europe, to look for alternative raw materials. This is not an easy task, since the plant processes mainly Russian oil, and the most obvious replacement - a barrel from Kazakhstan - is already in demand in neighboring Romania.

Nationalization by the Bulgarian authorities of the port of Rosenets

On September 4, 2023, Bulgarian Minister of Transport and Communications Georgi Gvozdeikov announced that the country's authorities had taken control of the Rosenets oil terminal, taking it from Lukoil Neftochim Burgas. At the same time, the Bulgarian government does not intend to pay compensation to Lukoil due to the termination of the concession. Read more here.

Data breach of millions of customers

In early August 2023, it became known that a database called Lukoil 2022 was made publicly available. It is assumed that it is related to the oil and gas company Lukoil.

According to the Telegram channel "Information Leaks," the file contains 12,926,400 lines of data, including:

• FULL NAME;
• loyalty card number;
• phone number.

According to the Telegram channel, a similar base was previously sold on thematic forums. It is noted that the merged file was in the hands of cybercriminals due to a vulnerability on the website of the loyalty program by parsing.

We checked the phone numbers of several loyalty program participants known to us and compared their card numbers with what is contained in this database - all the information turned out to be relevant, - said in the message of the Telegram channel "Information Leaks."

At the same time, neither Lukoil nor Roskomnadzor comment on the information about the alleged leakage of these customers of the company by August 4, 2023.

According to Vedomosti, since the beginning of 2023, the number of data leaks in companies has sharply increased in Russia. The data found on the network belonged mainly to the largest financial and insurance companies, government agencies, as well as companies in the field of information security. One of the reasons for the increase in the number of incidents is the termination of access to updates for part of foreign software, says Anton Yakimov, deputy general director of the T1 holding for technological development. This provokes a large amount of new vulnerabilities and exploits that have been adopted by attackers, he explains. In addition to this leak, which happened earlier, allowed hackers to better understand the user's profile and interests, says Anton Kuzmin, technical director of Innostage. This factor makes phishing attacks more likely to succeed, he says.^[6]

Sharp increase in transport costs after the outbreak of the conflict in Ukraine: 300 billion rubles for the 1st half of the year or 8.4% of revenue

For seven years from 2015 to 2021, LUKOIL's transportation costs were stable in the range of 130-160 billion rubles for the half year, but transportation costs doubled as of 1P 2023, reaching 300 billion rubles.

Relative to revenue, transportation costs reached an all-time high of 8.4%, while the average from 2015 to 2021 is 4.4% (5-6.5% in crises and 3-4% in high oil prices).

Therefore, answering the question of how much logistics costs, the answer becomes clearer - at least 4% of excess expenses from revenue, which directly reduces the margin of the oil and gas business and overall profitability. Such trends are relevant for all oil and gas companies in Russia, except for Novatek.

Expensive logistics after the start of a special operation in Ukraine is the main channel of excess expenses of oil and gas. Operating, economic and administrative expenses are growing extremely (significantly higher than inflation), capital investment costs are growing.

Lukoil closed a deal to sell refineries in Sicily

Lukoil in May 2023 closed a deal to sell a refinery in Sicily, of which it has been a shareholder since 2008. The sale of the enterprise, which faced a sharp decline in supplies due to sanctions against Russian oil and the threat of nationalization, was announced by the Russian company at the beginning of the year. The buyer was a company from Cyprus.

Lukoil and its partner gained control over the former Russian subsidiary of the insurance company AIG

On April 18, 2023, it became known about the transfer of the former Russian subsidiary of the insurance company AIG to the ownership of Lukoil and its financial partner. The corresponding entry is entered in the Unified State Register of Legal Entities (USRUL). Read more here.

Lukoil has created a private security organization to protect fuel and energy complex facilities

Lukoil has created a private security company to protect the facilities of the fuel and energy complex (fuel and energy complex ). This was announced at the end of March 2023 by the head of the Ministry of Energy of the RFNikolai Shulginov at the final board of the department. Read more here.

Rostelecom became the 100% owner of a telecommunications joint venture with Rostelecom

On March 21, 2023, it became known that Rostelecom was becoming the 100% owner of a telecommunications joint venture with Lukoil. The Federal Antimonopoly Service (FAS) of Russia granted the petition of PJSC Bashinformsvyaz (a subsidiary of Rostelecom) to acquire 49.9% of Inform LLC (formerly Lukoil-Inform). Read more here.

2022

Annual revenue growth by 20.3% to RUB 2.87 trillion

Lukoil's net profit according to Russian accounting standards (RAS) amounted to 790.12 billion rubles at the end of 2022, which is 24.3% more than a year earlier. The company's revenue during this time rose by 20.3% and reached 2.87 trillion rubles. Such data were released in early April 2023.

According to TASS, citing Lukoil's report, the gross profit of the oil company in 2022 increased by 29%, to 1.09 trillion rubles. Profit before taxes increased by more than 30%, to 884.9 billion rubles, and the cost - to 1.8 trillion rubles.

The company reports that in March 2023, financial investments in the form of shares of foreign subsidiaries acquired by Lukoil as part of intra-group transactions in the amount of $1.5 billion were accepted for accounting.

As noted by Alexey Kokin, an expert at Otkritie Research, chief analyst at Otkritie Investments, as a rule, Lukoil's RAS reporting reflects the indicators of only part of the business: at the end of 2021, revenue under RAS amounted to 25% of revenue under IFRS. Thus, the RAS framework does not include the international trading business with its significant turnover. However, operating and net profit under RAS were closer to IFRS indicators in 2021, amounting to 72% and 82% of them, respectively, the expert added.^[7]

The take-off of fuel exports from Romania to Ukraine is 30 times. The leader of oil refining in the country belongs to Lukoil

In February 2023, data from the Romanian Customs Administration were published. They show that the export of fuel from Romania to Ukraine in 2022 increased record, as well as in Bulgaria (see below).

The figures increased 30 times and reached almost 1 million tons. Another 250 thousand tons of fuel was sent from Romania to Ukraine in transit. This is 96 times more than in 2021. And the leading refining volumes among Romanian refineries are also occupied in Bulgaria by the refinery owned by Lukoil. Formally, the exclusive trading representative of Lukoil for the supply of petroleum products outside Russia is the Swiss trader Litasco. It was he who became the "parent" company for the Burgas refinery.

Romania's largest refinery, Petrotel Lukoil, located in the city of Ploiești, came under Lukoil's control in 1998. Oil comes to the plant from the port of Constanta on the Black Sea, it processes up to 2.5 million tons a year.

Back in 2014, Petrotel-LUKOIL began to have problems due to an investigation into tax evasion and money laundering. Of course, a political factor played a certain role: after the return of the Crimean peninsula to the Russian Federation, the company's management was offered to sell problematic Romanian assets.

After the start of the SVO of the Armed Forces of the Russian Federation in Ukraine, things went even worse: in connection with the departure from Italy, Lukoil lost 60.76% of foreign oil refining, and only Romanian Petrotel Lukoil and Bulgarian Lukoil Neftochim Burgas remained among its foreign assets. However, the volume of processed oil at both plants, as well as the volume of diesel exports from Bulgaria and Romania to Ukraine, has grown tremendously.

In connection with the decision of the Bulgarian government to soon introduce external management at the Burgas refinery, Litasco has already concluded a deal for $12 million. USA with the state operator of the oil terminal in the Romanian port of Constanta.

In 2023, Litasco will remain the main customer of Oil Terminal and will transport oil to Petrotel Lukoil refineries. The contract "fully takes into account the EU embargo on marine supplies of Russian oil and petroleum products."

Supply of AFU fuel from a plant in Bulgaria during the conflict in Ukraine

In their investigation into Bulgarian supplies to Ukraine in January 2023, journalists from the German newspaper Die Welt mentioned diesel tanks that literally "saved" Ukraine in the spring of 2022. With the help of secret supplies through foreign intermediary firms, Bulgarians supplied Ukraine with fuel, at times covering up to 40% of its needs.

Diesel fuel supplied by Bulgaria for the needs of the Armed Forces of Ukraine was processed from Russian crude oil at the oil refinery of the Russian company Lukoil. Read more here.

Lukoil sold ISAB for €1.5 billion

In December 2022, it became known about the sale by Lukoil of its oil refinery in Sicily. We are talking about ISAB, which is bought by the American investment group Crossbridge for 1.5 billion euros. Read more here.

Nationalization of plant in Italy approved

The Italian Council of Ministers in December 2022 approved the nationalization of the LUKOIL plant in Sicily. The enterprise will be transferred to the temporary special management of the state.

Putin allowed Lukoil and Gazprombank to buy Enel's stake in Enel Russia

At the end of September 2022, the president Russia Vladimir Putin signed a decree on the sale of "" and To Lukoil the Gazprombank fund "-Fresia" of Enel's stake in the company. " Enel Russia More. here

US arrested Boeing aircraft owned by the company for $45 million

The US District Court of the Southern District of Texas has issued an arrest warrant for a Boeing 737 aircraft worth $45 million, which, according to the US Department of Justice, belongs to Lukoil. The department announced this on August 31, 2022, attaching a photo of the liner to the website.

According to court documents, the Russian company owns a Boeing 737-7EM airliner with tail number VP-CLR and serial number 34865. The last time this Boeing flew to the United States was in March 2019 - the country was visited by Lukoil officials, including its co-owner Vagit Alekperov. The American authorities suggest that by the end of August 2022 the plane is in Russia.

The reason for issuing a warrant for the confiscation of the aircraft was that it "flew to and from Russia in violation of the sanctions imposed by the US Department of Commerce against Russia." As explained in the statement of the Ministry of Justice, the sanctions regime implies a ban on "flights to Russia and from Russia by American-made aircraft that do not have an appropriate license or license exceptions."

The case of his confiscation is being conducted by the FBI office in Houston, as well as the Bureau of Industry and Security of the Ministry of Commerce and the Department of Internal Investigations of US Immigration and Customs Enforcement.

In early July 2022, the Ministry of Transport of the Russian Federation reported that 77 aircraft of Russian airlines were stuck abroad at that time. Some of the aircraft were detained by decision of the lessors, and some cars did not have time to return to Russia due to the sharp closure of European airspace, the department said.

In response to the Russian military operation in Ukraine, the US authorities also imposed a ban on the provision of spare parts and maintenance of 99 Boeing airliners located in Russia. The European Union has banned European companies from supplying, leasing, maintenance and insurance of aircraft in the Russian Federation.^[8]

The head of the Lukoil department, Alexei Bessonov, earned 128 million rubles on insider and was sentenced conditionally

The head of the department of trade and financial operations of Lukoil, Alexei Bessonov, earned 128 million rubles on insider and was sentenced conditionally in September 2022.

Bessonov transmitted information about his company's entry into the currency market with sales of dollars. On this, Bessonov's friend from Ronin Europe Kirill Semeshkin earned 146 million rubles. Ronin was created by immigrants from Nomos Bank.

Lukoil acquires 100% of the shares of the football club Spartak-Moscow and Otkritie Bank Arena

In August, it was announced that Lukoil was acquiring a 100% stake in the Spartak-Moscow and Otkritie Bank Arena football club. Leonid Fedun leaves the shareholders of the Spartak football club and will not take part in the management.

Lukoil paid Gazprom 11 billion rubles for a stake in the joint venture Lyavozhneftegaz

Lukoil paid Gazprom 11 billion rubles for a stake in Layavozhneftegaz, a joint venture to develop the Vaneivis and Layavozhsky fields in the Nenets Autonomous Okrug. Read more here.

Approved the new president of Lukoil - Vadim Vorobyov

At the end of May 2022, it was announced the appointment of Vadim Vorobyov as the new president of Lukoil. His candidacy was approved at an extraordinary meeting of the company's shareholders - it was supported by more than 99% of the vote. Read more here.

Agreement on the acquisition of a subsidiary of Shell in Russia

On May 12, 2022, it became known that Lukoil had agreed to acquire a subsidiary of Shell in Russia, which owns a network of gas stations and a lubricant plant.

Vagit Alekperov left the board of directors and the post of head of Lukoil due to US sanctions

On April 21, 2022, Vagit Alekperov left the board of directors of Lukoil and the post of head of the company after falling under US sanctions.

Purchase of ESA Fuel Company

On March 24, 2022, it became known about the sale of the ESA fuel company to Lukoil. The relevant information appeared in the SPARK-Interfax system. The amount of the transaction was not disclosed. Read more here.

Buying 50% Fieldwood Mexico

At the end of February 2022, Lukoil announced the purchase of 50% of the Block 4 project in the Gulf of Mexico. The transaction was completed through the acquisition of Fieldwood Mexico. The remaining 50% of the project remained with the oil and gas company PetroBal (part of the Mexican conglomerate GrupoBAL). Read more here.

2021

Revenue growth by 67.3% to 9.44 trillion rubles

At rubles the end of 2021, Lukoil's revenue reached 9.44 trillion, which is 67.3% more than a year earlier. This rise in the company was associated with an increase in hydrocarbon prices, devaluation, ruble an increase in hydrocarbon production, as well as refining and trading volumes with oil and petroleum products. IFRS The Russian oil and gas giant published its reports on the Russian oil and gas giant in March 2022.

Lukoil's net profit in 2021 amounted to 773.4 billion rubles against 15.2 billion rubles in 2020. In addition to the increase in EBITDA, the dynamics of net profit is due to the impact of non-cash losses on asset impairment and exchange rate differences in 2020, the company said.

EBITDA for 2021 more than doubled (to 1.41 trillion rubles), mainly due to rising hydrocarbon prices, devaluation of the ruble, the positive effect of reserves at refineries, growth in refining volumes and margins, the positive effect of the temporary lag in export duty and MET, as well as an increase in oil and gas production in Russia and gas abroad. At the same time, EBITDA growth was constrained by the abolition of tax incentives for high-viscosity oil and the deterioration of retail business results in Russia.

In the Exploration and Production segment in Russia, in addition to rising oil prices, the EBITDA dynamics was positively influenced by an increase in oil production due to the dynamics of external restrictions under the OPEC + agreement, as well as an increase in the positive effect of the temporary lag on export duty and MET. Abroad, EBITDA dynamics is mainly related to the increase in hydrocarbon prices and an increase in gas production, as well as an increase in EBITDA of the West Qurna-2 project.

In 2021, Lukoil's free cash flow increased to 693.6 billion rubles, compared with 281.1 billion rubles in 2020. The growth is associated with an increase in operating margins and a decrease in capital expenditures, with the accumulation of working capital having a chilling effect.^[9]

Purchase of 50% of Meretoyakhaneftegaz

At the end of December 2021, Lukoil and Gazprom Neft entered into a purchase and sale agreement for a 50% stake in the authorized capital of LLC Meretoyakhaneftegaz, a 100% subsidiary of PJSC Gazprom Neft. The agreement was signed as part of the creation of a joint venture to develop a large oil and gas cluster in the Nadym-Pur-Tazovsky region of the Yamalo-Nenets Autonomous Okrug. Read more here.

Arrest of ex-department chief from company Treasury on insider trading charges

The Basmanny Court of Moscow at the end of September 2021 sent under house arrest the former head of the department of trade and financial operations of the Lukoil treasury Alexei Bessonov and the owner of the investment company Ronin Europe Kirill Semeshkin. In December 2015, Semeshkin, acting in the interests of the investment Ronin Europe Ltd (Cyprus), repeatedly made transactions with foreign exchange instruments using Bessonov's insider information. He conducted transactions and each time there were short-term deviations of the ruble/dollar pair by 0.1-0.5% of the market price. Ronin Europe earned at least 146 million rubles. Bessonov for the deliberate use of insider information, which caused major damage, faces up to 6 years in prison, Semeshkin - 4 years.

Payment of 374.2 million rubles for damage to the Kolva River

In early September 2021, it became known that Lukoil paid 374.2 million rubles for damaging the Kolva River in the Komi and Nenets Autonomous Okrug.

Company allowed oily liquid to spill into northern river... As a result, both water and soil were contaminated. Our specialists worked on the spot for a long time, made overflights, took samples and eventually calculated the damage, - wrote the head of Rosprirodnadzor Svetlana Radionova on her Instagram page.

The head of the department recalled that the struggle to preserve the Arctic nature is the task of both the state and the public, as well as responsible subsoil users.

Responsible behavior of the nature user is what we strive for, "she added.

In May 2021, an oil leak occurred near Usinsk (Komi Republic) as a result of the depressurization of the pipeline. According to preliminary data presented by Lukoil-Komi, 90 tons of oil got on the ground, and 9 tons got into the water.

The Usinsk administration, citing preliminary data from Lukoil-Komi, reported that the depressurization of the pipeline occurred in the section from the Osh to the Kharyaga field at a distance of about 300 meters from the coastline of the Kolva River. At the same time, Rosprirodnadzor explained: oil products leak occurs from time to time, and corrosion of pipe metal most often becomes the cause. On land, the spill was quickly localized. 230 people and 70 pieces of equipment took part in the elimination of the accident.

In June 2021, Rosprirodnadzor tentatively estimated the damage to nature at 300 million rubles. Lukoil did not agree with the assessment. The company announced that it intends to clarify "what the calculation is based on." Despite the disagreement, Lukoil made it clear that the company was still ready to pay the fine, explaining that the oil company was "law-abiding."^[10]

Buying a stake in a Mexican oil project for $0.5 billion

On July 5, 2021, Lukoil announced its entry into the Block 4 project, within which hydrocarbons are being produced on the shallow shelf in Mexico. The Russian company received a 50% stake in this project by buying the holding company that owns its operator. Read more here.

Creation of a $0.5 billion fund to invest in promising projects

In early June 2021, the largest shareholders of Lukoil created a fund with a starting volume of $0.5 billion to invest in promising projects. Vagit Alekperov, president and co-owner of Lukoil, spoke about this in an interview with TASS. Read more here.

Purchase of Australian oil and gas company FAR Limited

In mid-February 2021, it became known about Lukoil's intention to acquire the Australian oil and gas company FAR Limited for 220 million Australian dollars ($171.2 million). The Russian company is going to pay the deal with its own money. Read more here.

2020

Combined revenue of Lukoil - 12,156,127 thousand rubles

At the end of 2020, Lukoil reduced revenue by 8% - to 12,156,127 thousand rubles Data include the combined revenue of two insourcing companies "" Lukoil - Inform(3,984,811 thousand rubles) and "(LUKOIL Technology 8,171,316 thousand rubles) In the ranking, " TAdviser "The largest IT insourcing companies in Russia Lukoil took the seventh line. In 2019, the same figure was 13,218,644 thousand rubles.

Lukoil acquires 40% in the RSSD project in Senegal

In July 2020, the second largest oil production in the Russian Federation, Lukoil, entered into an agreement with Cairn energy PLC to acquire a 40% stake in the RSSD project in Senegal for $300 million.

The RSSD project includes the Rufisque, Sangomar and Sangomar Deep fields and will be implemented under the terms of a production sharing agreement (PSA). The deal must be closed after approval by the Senegalese authorities. The agreement also provides for the possible payment of a bonus to Cairn Energy PLC in the amount of up to $100 million after the start of production.

The project operator is Woodside with a 35% share. Other partners are FAR (15%) and state-owned Petrosen (10%).

2019

Oil Barrel Production Cost $10.2

Bloomberg based on IFRS 2019 data. calculated the cost of producing a barrel of oil from the three largest Russian companies Lukoil:,,. For Rosneft Gazpromneft all three, it does not exceed $12 per barrel.

For Rosneft, this figure is $11.3 per barrel ($3.8 OPEX and $7.5 CAPEX), for Lukoil - $10.2 per barrel ($3.7 OPEX and $6.5 CAPEX), for Gazprom Neft - $9.8 per barrel ($3.8 OPEX and $6 CAPEX).

Lukoil entered the top 10 most profitable companies for investors in the world

Lukoil closed the top 10 world rating The Boston Consulting Group (BCG) of companies that provide shareholders with the largest increase in investments. BCG has been publishing the rating for 21 years and takes into account how much shareholders could earn in the five-year period on the purchase and sale of shares - taking into account the dividends received during this time. The yield on ownership of Lukoil shares from 2014 to 2018 amounted to 27.1% - more than that of "" Novatek(23.5%), as well as (Sberbank 16.6%), writes BCG. At the end of 2018, only these three Russian companies entered the top 50^[11]

Chinese and American companies are ahead of Lukoil. The leader is GPU developer Nvidia (54.4%), followed by media content maker Netflix (38.5%), Chinese investment company Tencent Holdings (43.5%) and food holding Kweichow (29.3%).

In the BCG industry ratings last year, seven Russian companies: Alrosa - the fourth among mining companies, Evraz, MMK and Severstal - are in the top 10 in the ranking of metallurgists (3, 5 and 10th places, respectively).

Average return on shares among Russian oil companies over 12 years

Lukoil will bring its subsidiary Lukoil-Inform beyond the perimeter of the group

On March 11, 2019, it became known that LUKOIL JSC would bring a subsidiary of Lukoil-Inform LLC beyond the perimeter of the group. Read more here.

356th in the ranking of the most expensive brands

In the ranking of the most expensive brands, which was announced on January 22, 2019 by the Brand Finance consulting company, Lukoil is in 356th place against 363rd a year earlier. The brand value of the oil giant rose by 19.7% and reached $5.8 billion.

2013: Revenue growth 1.6% to $141.5 billion

2013 was successful for the company in terms of growth in operating indicators (production increased by 1.5% to 2.2 million barrels of oil per day) and high oil prices. However, revenue grew by only 1.6% YoY to $141.5 billion, and net profit decreased by 30% YoY to $7.8 billion. True, this fall is of a "paper nature" - a number of assets were written off in the Nenets Autonomous Okrug, Africa, the USA, Italy and Ukraine. The growth of net debt and capital expenditures by 28% compared to 2012 (up to $15.4 billion). By 2016, LUKOIL plans to switch to IFRS reporting - perhaps preparations for the transition to a new standard have begun in the current reporting. In addition, we recall that earlier LUKOIL abandoned SPO plans in Hong Kong.

2011: Profit for 9 months amounted to $9 billion

LUKOIL's net profit in the third quarter of 2011 was $2.2 billion, compared to $2.818 billion a year earlier.

According to the results of the first nine months, the profit amounted to $9 billion. Meanwhile, analysts expected these figures to be at $3.064 billion and $9.832 billion, respectively.

The most accurate was the forecast of Raiffeisen Bank, whose experts predicted LUKOIL's net profit of $2.594 billion and $9.362 billion, respectively.

The significant increase in financial indicators is mainly due to the increase in hydrocarbon prices in the period of 9 months of 2011 compared to the same period in 2010.

The net profit for the third quarter of 2011 was negatively affected by losses related to the impairment of the ruble in the amount of about $570 million, including income tax expenses on foreign exchange differences of Russian enterprises of the group in the amount of about $340 million, the company explains.

Links

• LUKOIL Website

Notes