Lukoil

LUKoil ( Russian ЛУКОЙЛ )
legal form	PAO (Public Company )
ISIN	RU0009024277 ; US6778621044 ( ADR )
founding	1991
Seat	Moscow , Russia
management	Wagit Alekperow , founder, largest shareholder and chairman of the board; Valery Graifer , Chairman of the Supervisory Board (Совета директоров);
Number of employees	110,300 (2014)
sales	99.9 billion US dollars (2017)
Branch	Oil and gas
Website	www.lukoil.com

A Lukoil gas station in Tula

A Lukoil gas station in the USA

Lukoil (own spelling LUKOIL , Russian ЛУКОЙЛ ) is a Russian mineral oil company. The company, which is now internationally positioned, is listed in the RTS Index . In the Forbes Global 2000 of the world's largest companies, Lukoil ranks 98th (status: FY 2017). The company had a market value of over USD 60 billion in early 2018.

The core tasks of Lukoil include the extraction and production of crude oil and natural gas as well as the manufacture and marketing of mineral oil products. The geographical focus is on western Siberia, the Timan - Pechora region and the Yamal region. At the end of October 2012, the group applied for a permit for geological exploration in the Arctic (area of around 135,000 square kilometers).

Positioning in the market

Lukoil is the sixth largest publicly traded oil company in the world and the first in Russia to be vertically integrated .

Lukoil produced 2.31 million barrels of oil and gas per day in 2014 . The group has an oil equivalent of 17.6 billion barrels. This puts it in second place worldwide after ExxonMobil and ahead of BP . In terms of crude oil reserves, it outperforms all other publicly traded companies in the world. They are 16 billion barrels; that is 0.4 percent of the world's oil reserves.

Ownership

The majority of the group is owned by its Russian managers. The US oil company ConocoPhillips holds 20 percent of the shares. According to the Moscow media, Wagit Yusufovich Alekperov holds a 13 percent stake.

history

On November 25, 1991, by order of the Council of Ministers of the Soviet Union, the state oil company LangepasUraiKogalymneft (LUKOIL) ( ЛангепасУрайКогалымнефть (ЛУКОЙЛ) ) was created from several smaller oil production and processing companies. It was named after the three West Siberian cities of Langepas , Urai and Kogalym , in whose area the three main areas of the group, which are still important today, were located. In 1993 the company was converted into a stock corporation under the sole name of Lukoil, and privatization began in the following year.

On November 8, 2016, LUKOil announced that it has produced 2 billion tons of crude oil since it was founded in 1991. While the production of the first billion lasted 15 years (1991 to 2006), the production of the second billion took place in just 10 years.

Lukoil oil production by region in million tons

In 2015, crude oil production increased by 3.6 percent compared to the previous year and reached 100.7 million tons (736 million barrels), the largest volume in the company's history. In 2016, the output dropped significantly to 91.99 million tons. The reason is likely to be the decline of 3.17 million tons in West Siberia, but above all a massive decrease in international production and the Iraqi "compensation oil". In addition, there is a delayed reaction to the OPEC measures to lower the price, which affected all Russian oil producers.

region	2012	2013	2014	2015	2016
Western Siberia	49.21	48.21	46.84	44.21	41.04
Ural	13.65	14.09	14.69	15.13	15.36
Volga	3.83	6.05	6.94	7.05	7.23
Timan Pechora oil field	15.63	15.23	15.95	17.33	17.72
Others in Russia	1.90	1.90	1.91	1.90	1.84
International	5.62	5.33	10.88	15.08	8.82
Source (oil production in millions of tons per year)

The company's oil production increased by over 10 percent from 2004 to 2009. In 2011, however, the company's output fell, v. a. noticeable in Russia. International production also fell, but only accounts for a small part of total production. According to Lukoil, the decline in 2011 is due, on the one hand, to the exhaustion of some fields in Siberia, and, on the other hand, to the fact that the most modern conveyor technologies are installed on many conveyor systems, during which time it is not possible to mine there. According to Lukoil, the production rate had recovered again in the second half of 2011 in West Siberia.

LUKOil has opened up many new small fields for crude oil and natural gas production in recent years.

Originally, LUKOil was supposed to develop the Iraqi West Qurna oil field, one of the world's largest oil fields, together with the Norwegian company Statoil, and to massively increase production in the long term. Statoil sold its 18.75 percent stake, however, and LUKOil secured it, making the company 75 percent and the Iraqi state oil company 25 percent. Because of the size of the field, it is divided into several projects. LUKoil has shares in "Phase II". This part of the field was producing just over 400,000 barrels of oil per day in January 2017.

As part of an ambitious Iraqi plan, the West Qurna-2 oil field returned to the media in May 2018. The state-owned Basra Oil Company with their 25 percent and Lukoil with 75 percent of the shares want to double production to 800,000 barrels a day by 2025. In a first step, however, production is to be increased to 480,000 barrels a day by 2020.

In 2015, LUKOil received 10.558 million tons of so-called "compensation oil" for the investments to develop the field. Phase II produced over 20 million tons of crude oil in 2015. In the first 9 months of 2016, deliveries decreased to 4.477 million tons. The alliance, which now consists only of LUKOil, was to receive 1.15 US dollars per barrel produced as well as compensation for the extremely high costs of the development and construction of the infrastructure.

Foreign production will play a much bigger role in the future, so negotiations are in progress with Iran. Likewise in numerous other oil-rich countries. Natural gas production has also increased; here too, large parts of it are found abroad, e.g. B. Uzbekistan instead. When it comes to oil, the focus is also on former Soviet republics, for example in Azerbaijan and Kazakhstan.

However, these efforts have not been sufficient. Lukoil announced that Lukoil's production decreased to 92.0 million tons in 2016, including 83.177 million tons from Russian oil fields. According to the company, it was 100.7 million tons in 2015. However, natural gas production rose slightly in 2016 to 20.3 billion cubic meters.

In the second half of 2016, however, two new oil fields, the Filanovsky and Pyakyakhinsky oil fields, went into operation, initially at a low level. The number of wells was also increased in western Siberia and particularly strongly in the "Urals" region as well as wells in the Timan Pechora oil field and its surroundings.

Oil refineries and petrochemical plants

Lukoil Neftochim in Burgas, Bulgaria is the largest refinery in Southeast Europe

Lukoil owns seven oil processing companies, including 1 plant each in Romania, Bulgaria, Italy and the Netherlands. With a total capacity of 82.1 million tonnes per year (as of the end of 2016) and holds a 49% share in the ISAB refinery complex in Sicily and 45% in the TRN refinery in the Netherlands:

Country	Surname	place	Built	v. Lukoil acquired	Capacity, mln tpa
Russia	Lukoil-Nischegorodnefteorgsintes	Kstowo	1958	2000	15.0
Russia	Lukoil-Permnefteorgsintes	Perm	1958	1991	12.0
Russia	Lukoil-Volgogradneftepererabotka	Volgograd	1957	1991	9.9
Russia	Lukoil-Uchtaneftepererabotka	Uchta	1934	2000	3.7
Ukraine	Lukoil-Odesski NPS	Odessa	1937	1999	3.6
Bulgaria	LUKOIL Neftochim Burgas	Burgas	1964	1999	7.5
Romania	Petrotel-Lukoil	Ploieşti	1904	1998	2.4
Italy	ISAB	Priolo Gargallo	1975	2008 *	16.0 *
Netherlands	TRN	Vlissingen	1973	2009 *	7.9 *