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Development and Production

As far as its Upstream operations go, LUKOIL seeks to maximize its efficiency and profits by improving its production performance, carefully selecting new projects and exercising clear-cut control over its production costs.

PRODUCTION OF OIL AND LIQUID HYDROCARBONS

Building up oil production as part of prospective projects and keeping it steady in the traditional areas of the Company’s operations is viewed by the LUKOIL Group as a priority objective. 

In 2015 oil production went up 3.6% reaching an all-time high of 100.7 million tons (736 mln. barrels). Most of the production gain is due to successful development of the West Qurna-2 field in Iraq. A decline in production in Western Siberia is explained by natural depletion of reserves, however the reduced scope of drilling was compensated for by higher production in other high-income regions. The year 2015 saw commencement of raw hydrocarbon production at 14 new fields. The average flow rate in oil wells covered by the projects went up 3.7%.

Oil Production in Russia

Russia’s 2015 oil production went down 0.8% y-o-y to 85.6 mln. tn (629 mln bbl), primarily due to a decline in production in Western Siberia. There’s been a production gain in the Urals Region and under the high-income projects in Timan-Pechora and Caspian.

International Projects

In 2015 the Group increased its oil production as part of international projects by 38.6% to 15.1 mln t (107 mln bbl) which is due to development of Iraq’s West Qurna-2.

GAS PRODUCTION

Gas production accounts for 14% of the total production of commercial hydrocarbons. In 2015 cumulative gas production of the LUKOIL Group dropped by 4.7% to 24.9 bcm. Commercial gas production (after own consumption, injection and transportation losses) of the Group totaled 20.3 bcm, which is a 1.4% growth y-o-y.

Gas Production in Russia

The Group is engaged in development of the Bolshekhetskaya Depression gas fields in Yamal, which is currently the Company’s main natural gas production region.

In 2015 production of commercial gas in Russia dropped by 6.0% to 13.2 bln. cu. m. Nakhodkinskoye is the Group’s main gas field that accounts for 56.4% of the entire commercial gas production in Russia. Bolshekhetskaya Depression is a priority area of development and is viewed as such by the Group under its general strategy of stepping up the percentage of its gas projects.

International Projects

Foreign projects account for 34.6% of the commercial gas production, more than a half of which is produced in Uzbekistan. In 2015 commercial gas production in Uzbekistan went up by 28.6%. Khauzak-Shady and South-Western Gissar have entered production phase. In 2015 gas production commenced at the Kuvachi-Alat, being a part of the Early Kandym Gas project. In the Group’s Shah-Deniz project in Azerbaijan the production gain was 7.2%.

  • Key performance indicators

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