LUKOIL is one of the world’s largest publicly traded, vertically integrated oil and gas companies, accounting for about 2% of global oil production and approximately 1% of proved hydrocarbon reserves.
With our supply of products, energy and heat, we improve the quality of life of millions of consumers every day in more than 100 countries around the world. We employ over 100,000 people who combine their efforts and expertise to ensure the efficient development of the Company and secure its leading position in the market.
EXPLORATION AND PRODUCTION SEGMENT
The LUKOIL Group carries out oil and gas exploration and production projects in 12 countries around the world.
As of December 31, 2011, the volume of proved reserves amounted to 17.3 billion barrels of oil.
90.5% of the Company’s proved reserves and 90.5% of its marketable hydrocarbon production are located in Russia.
In addition, the Company is involved in five ongoing projects outside Russia.
The Company’s core operations are concentrated in four federal districts of the Russian Federation: North-West, Volga, Urals and South.
As of 2011, 42% of the Company’s proved hydrocarbon reserves and 49% of its hydrocarbon production were in the key resource region of Western Siberia.
International projects account for 9.5% of the Company’s proved hydrocarbon reserves and marketable hydrocarbon production.
REFINING AND MARKETING SEGMENT
Refining and Marketing is LUKOIL’s second largest business segment.
By developing this segment, the Company reduces its exposure to volatile crude oil prices, produces high-quality, value-added products and strengthens its competitive position in its key operating regions.
LUKOIL owns refineries in six countries worldwide (including its stakes in the ISAB refinery complex and the Zeeland refinery).
As of the end of 2011, the total capacity of LUKOIL Group refineries amounted to 73.5 million tonnes of crude oil per year.
In Russia, the Company owns four refineries, two mini-refineries and four gas processing plants. Its Russian asset base also includes two petrochemical plants.
As of the end of 2011, the total capacity of LUKOIL Group refineries in Russia reached 45.3 million tonnes per year (332 million barrels annually).
LUKOIL currently produces a wide range of high-quality oil and gas products and petrochemicals, marketing them both wholesale and retail in more than 30 countries worldwide.
LUKOIL has started producing gasoline that meets the Euro-5 standard, made possible by modernization work at its Nizhny Novgorod refinery in Russia. Euro-5-compliant gasoline ensures cleaner exhaust emissions and a significant reduction in the release of chemicals and other substances into the atmosphere.
POWER GENERATION SEGMENT
LUKOIL operates across all stages of the power generation sector, including electricity distribution and heat production at its power facilities.
The LUKOIL Group has an installed power generation capacity of 3.5 GW. In 2011, LUKOIL generated 12.6 billion kWh of electricity and 15.2 million Gcal of heat.
INNOVATION STRATEGY
One of LUKOIL’s key competitive advantages is the implementation of innovations and new technologies. The Company’s professional staff both develop new technologies and play an active role in improving existing ones.
The volume of investment in R&D increased in 2011, reaching USD 140 million (compared with USD 120 million in 2010).
The build-out of LUKOIL’s scientific project capabilities was completed in 2011. With the addition of four regional research units, LUKOIL-Engineering came to have a total of five branches in different regions.
These research units, which constitute the core of LUKOIL’s scientific project capabilities, carried out R&D and project work worth USD 310 million in 2011. In the same year, LUKOIL’s business group began activities related to the Skolkovo Innovation project launched by the Government of the Russian Federation.
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