LUKOIL Group has proved hydrocarbon reserves in six countries. The major part of the proved reserves (around 90%) is conventional, which is the Company's most important competitive advantage ensuring low development and production costs per barrel.
As of the end of 2016, the Group's SEC proved hydrocarbon reserves amounted to 16.4 billion boe, with oil accounting for 76.1% of this amount. Our reserves life is 20 years as compared to the average of 12 years among the world's largest private oil and gas companies. LUKOIL is one of the leading Russian and international companies in terms of proved reserves and their quality.
Russia accounts for 88% of the Group's proved hydrocarbon reserves, concentrated mainly in West Siberia. Offshore fields and high-viscosity oil comprise around 10% of the proved reserves. About a half of the proved reserves in international projects is located in Uzbekistan, where the Company is actively developing its gas projects.
Around 57% of the Company's proved hydrocarbon reserves is classified as developed, i.e. they can be extracted from existing wells using the available technology and equipment. A large share of undeveloped reserves supports the future production growth potential.
Available contingent resources of 14.4 billion boe provide potential for increasing proved reserves as macroeconomic environment improves, development plans evolve, new technologies are introduced, or pilots are carried out.
Proved reserves are shown according to the data audited by Miller and Lents in compliance with SEC standards.
The hydrocarbon reserve replacement ratio was 81%, for crude oil – 85%. These results were achieved despite the decline in the annual average crude price to a twelve-year low and the higher MET base rate.
Pursuant to the Russian legislation, hydrocarbon exploration and production operations require a subsoil license. LUKOIL continuously works to obtain subsoil rights, monitor objects of subsoil use, apply for new licenses and have existing licenses extended.