LUKOIL is a major international vertically-integrated oil & gas company, accounting for 2.2% of global output of crude oil.
The strong position, which the Company enjoys today, is the fruit of 20 years work to expand the reserve base, increasing business scale by seeking out and executing strategic transactions.
LUKOIL TODAY
- 2.2% of global production of crude oil;
- The largest privately owned oil & gas company in the world by proved oil reserves;
- 4th largest privately owned oil & gas company in the world by oil production;
- 16.6% of Russian crude oil production and 17.7% of Russian crude oil refining;
- One of the biggest Russian oil business groups with $133 billion revenue and net income in excess of $10 billion
EXPLORATİON & PRODUCTİON SEGMENT
LUKOIL is implementing oil & gas exploration and production projects in 12 countries.
Proved reserves as of December 31, 2011 were 17.3 billion barrels of oil.
90.5% of Company’s proved reserves and 90.5% of marketable hydrocarbon production are in Russia.
The Company is also taking part in projects in 5 countries outside Russia.
Most activity is concentrated in four federal districts of the Russian Federation: the North-West, the Volga, the Urals and the South.
The Company's main resource base and oil production region is Western Siberia which accounted for 42% of proved hydrocarbon reserves and 49% of LUKOIL’s hydrocarbon production in 2011.
International projects account for 9.5% of Company’s proved hydrocarbon reserves and 9.5% of marketable hydrocarbon production.
REFİNİNG & MARKETİNG SEGMENT
Refining & marketing is LUKOIL's second major business segment.
By developing this segment the Company lowers its exposure to high price volatility on the crude oil market and enhances its competitive position in main business regions by production and sale of high-quality petroleum products with high value-added.
LUKOIL currently produces a wide range of high-quality petroleum and gas products and petrochemicals, selling them via wholesale and retail in over 30 countries.
Has oil refineries in 6 countries (including share in the ISAB refinery complex and Zeeland Refinery).
Overall capacity of LUKOIL Group refineries at the end of 2011 was 73.5 mln tons of crude oil per year.
The Company owns 4 oil refineries and 2 mini-refineries in Russia, as well as 4 gas-processing plants. The Company's Russian assets also include 2 petrochemical plants.
Overall capacity of Russian oil refineries of LUKOIL Group at the end of 2011 was 45.3 mln tons per year (332 mln barrels per year).
LUKOIL currently produces a wide range of high-quality petroleum and gas products and petrochemicals, selling them via wholesale and retail in over 30 countries.
LUKOIL produces a first batch of automotive gasoline to Euro-5 standards. This was made possible by commissioning of a hydrofluoric alkylation unit as part of catalytic cracking complex at the Nizhny Novgorod Refinery. Euro-5 gasoline ensures so-called ‘clean exhaust’, reducing emission of sulphur oxides and the products of incomplete combustion of aromatics (including the particularly dangerous carcinogen and mutagenic, benzopyrene).
POWER GENERATİON SECTOR
Power Generation sector comprises all aspects of power generation, including delivery and marketing of electrical energy and of heat produced at power plants. The nucleus of the segment is the Russian power generating company, UGK TGK-8, which was acquired by LUKOIL in 2008, but it also includes companies producing electricity and heat in Bulgaria, Romania, and Ukraine.
LUKOIL Group has power generating capacity of 3.5 GW. The Group’s electricity output in 2011 totalled 12.6 billion kWh. Heat production in 2011 was 15.2 million Gcals.
INNOVATİON POLİCY
Innovation and the application of new technologies are among the main competitive strengths of LUKOIL. The Company’s specialists both design new technologies and work to modernize existing technologies.
Total Research and Development financing increased in 2011 and accounted for more than $140 million (comparing with more than $120 million in 2010). Organizational transformation of LUKOIL’s scientific project capacities was completed in 2011. Four regional institutes were taken into LUKOIL-Engineering, which established five branches in different geographical regions where it has activities. The institutes, which are the core of LUKOIL’s scientific project capacity, carried out R&D work, project studies and other work with total value of $310 million in 2011.
A LUKOIL working group was set up in 2011 to consider issues associated with participation in the Russian Government’s Skolkovo innovation project. Work was carried out during the year on selection of scientific and technology projects, which have been recommended for implementation as part of joint work with the Skolkovo Innovation Center. Joint scientific research work between OJSC RITEK ( LUKOIL subsidiary) and the Skolkovo Center is scheduled in 2012–2014.
The Group continued to work closely in 2011 with the Russian Corporation of Nanotechnologies (RUSNANO) on commercialization of nanotechnologies and their application in the oil and gas industry. OJSC RITEK carried out joint work with RUSNANO during the accounting year on innovative developments for extraction of difficult reserves in Bazhenov formations.