The Company’s core operations are concentrated in four federal districts of the Russian Federation, specifically in the North-Western Federal District (the Nenets Autonomous Area, the Komi Republic, and the Kaliningrad Region), the Volga Federal District (the Perm Territory and the Republic of Tatarstan), the Ural Federal District (the Yamal-Nenets Autonomous Area and KhantyMansi Autonomous Area – Yugra), and the Southern Federal District (the Volgograd Region, Astrakhan Region, and the Republic of Kalmykia).
West Siberia is the Company's key oil production region (44% of the LUKOIL Group's oil production), and its key resource base (52% of the LUKOIL Group's proved oil reserves).
The first oil field in West Siberia was discovered in 1960, and as early as in 1964 commercial oil production commenced in the region. As of today, West Siberia is Russia's major oil production region. Most fields within the region are extra large and located close to each other.
The Company has had operations in West Siberia since its establishment, when LangepasUrayKogalymneft state-owned corporate group was created on the basis of West Siberia enterprises.
LUKOIL has operations in in two West Siberia autonomous regions: Khanty-Mansi (mostly oil fields) and Yamal-Nenets (mostly gas fields).
West Siberia accounts for 51% of LUKOIL Group's exploration drilling. Most prospecting operations in this region are conditioned by the need for replenishment of the resource base. Despite the highly explored West Siberia reserves, exploration activities that are under way in the region demonstrate high performance and efficiency.
The region's main prospects depend on the development of hard-to-recover reserves, and therefore a strategic goal of the Company is to develop relevant technological capabilities, including pilot operations. Enhanced oil recovery, fracturing, sidetracking, horizontal drilling and other techniques are actively deployed in this region. The multi-level field development monitoring system that uses geotechnical models helps LUKOIL to constantly optimize its field development operations.
A number of growth projects are being implemented on a regional scale:
The Timan-Pechora oil and gas province has strong potential for high-viscosity oil production growth.
Mainly deposited at the Yaregskoye and Usinskoye fields, heavy crude oil accounts for approximately 5% of the Group's proved hydrocarbon reserves. The development of these reserves is stimulated through special tax rates.
The Company began its operations in the region in 1999 following the acquisition of the controlling interests in OJSC KomiTEK. In 2001, controlling interests were acquired in Kharyaganeft LLC, OJSC Bitran, CJSC Baitek-Silur, and AmKomi LLC. Timan-Pechora accounts for 18% of the Groups proved oil reserves, and 19% of oil production.
In 2000s, an export terminal was constructed near the settlement of Varandei in the Barents Sea due to the growth in production and the region's poor infrastructure. The terminal enables year-round shipment of oil from Timan-Pechora province to be supplied to the international market, particularly in the USA. In mid 2008 the terminal was commissioned following the expansion of its capacity up to 12 million tonnes per year.
The Company is activety developing its growth projects in this region: Yaregskoye and Usinskoye high-viscosity oil fields as well as R. Trebs and A. Titov joint venture project.
- Yaregskoye Field (high-viscosity oil)
- Usinskoye Field (high-viscosity oil)
Trebs and Titov fields
In 2011, OJSC LUKOIL and OJSC Bashneft established a joint venture to develop R. Trebs and A. Titov oil fields. LUKOIL's share in the project is 25.1%.
R. Trebs and A. Titov fields are the largest onshore oil fields in Russia situated in the north-east of the Nenets Autonomous region. Both fields are on the Sadayaginskaya bench of the Khoreiver depression.
Volga region's oil production commenced in the 1930s and up until the late 1970s it was the country's largest region in terms of proved reserves and oil production.
Volga region is the Company's traditional oil and gas production region. LUKOIL commenced its operations here in 1995 when the region's producing enterprises were transferred into its authorized capital by the Russian Government's order.
The region accounts for 6% of the Group's proved oil reserves, and 11% of the Company's oil production. Over the last 5 years Volga Region's share in the Group's total oil production increased from 7% to 11% mostly due to the growth in the North Caspian.
LUKOIL has pioneered the development of the Russian sector of the Caspian Sea bed and set the ground for nine field discoveries with combined recoverable reserves of 1.1 billion tonnes of reference fuel in this region.
The Urals region is the Company's traditional oil and gas production region. LUKOIL commenced its operations here in 1995 when shares in a number of the region's producing joint-stock companies were transferred into its authorized capital by the Russian Government's order.
The Urals fields are relatively small in terms of reserves and are geographically dispersed. However, the high-developed transport infrastructure that is available in this region, as well as the Company-owned refinery and gas processing facilities significantly improve performance of field development operations. The use of cutting-edge technologies helps improve the oil recovery and increase the region's production.
The region currently accounts for 17% of the Company's proved reserves and 17% of oil production. The specific aspects of prospecting activities in the Perm Territory are numerous natural protection and water protection zones here within the areas of occurrence of potassium and magnesium salts. In order to comply with the environmental law and its corporate environmental policy, the Company developed and implemented special energy saving technologies, as well as seismic and drilling techniques.
LUKOIL commenced its operations in the Kaliningrad region in 1995 when shares in a number of the region’s producing joint-stock companies were transferred to its authorized capital by the Russian Government’s order.
The main prospects in the region are related to the development of offshore fields in the Baltic Sea.
The Company has unparalleled expertise in the Baltic Sea operations, which minimizes the risks associated with new field development and shortens new project lead times. The proximity to export markets and the Company's own transportation infrastructure reduces the transportation expenses and improves the cost efficiency of operations in the region.