OAO LUKOIL, together with its subsidiaries, engages in the exploration, production, refining, marketing, and distribution of oil and gas in Russia and internationally. Its exploration and production activities are primarily located in Russia, Azerbaijan, Kazakhstan, Uzbekistan, the Middle East, South America, and northern and western Africa. The company also engages in refining, marketing, and trading of crude oil, natural gas, and refined products; and processing and trading of petrochemical products. In addition, it engages in power generation, banking, and finance businesses.

LUKOIL was formed in 1991, when three state-run, western Siberian companies, Langepasneftegaz, Urayneftegaz, and Kogalymneftegaz, merged. The initials of the three companies are preserved in the name Lukoil.

Production

Liquid hydrocarbons
Liquid hydrocarbons production excluding the West Qurna-2 project was 1,539 thousand barrels per day in the fourth quarter of 2020, which is 2.3% higher quarter-on-quarter. As a result, in 2020 liquid hydrocarbons production totaled 1,598 thousand barrels per day, which is 10.5% lower year-on-year. Liquid hydrocarbons production dynamics was driven by the OPEC+ agreement concluded in April 2020, which led to limitations on production by the Group in Russia and at certain international projects. In particular, due to the agreement crude oil production by the Group in Russia was cut in May 2020 by approximately 310 thousand barrels per day, or by 19%, as compared to the level of the first quarter of 2020. By the end of 2020 production was gradually increased by approximately 100 thousand barrels per day as compared to the May level.

Gas
In the fourth quarter of 2020, gas production increased by 37.8% quarter-on-quarter, to 8.2 billion cubic meters. The growth was driven by recovery of gas production in Uzbekistan. As a result, in 2020 gas production was 29.0 billion cubic meters, which is 17.2% lower year-on-year. Production decline was due to temporary decline in demand from China for gas produced in Uzbekistan amid the COVID-19 pandemic.

Reserves

LUKOIL's proved hydrocarbon reserves at 2019 year-end totaled 15.8 billion barrels of oil equivalent, 76% of which stood for liquids. The proved reserves replacement ratio for liquids, excluding the effect of changes in macroeconomic factors on evaluation, totaled 107% in 2019. The Company's proved hydrocarbon reserves life is 18 years.

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