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Technologies

Unleashing
the
uncaptured
potential

LUKOIL is leader of the Russian oil and gas industry in terms of efficient application of new production technologies. The Company invests into innovation development by implementing cutting-edge designs and technologies into every area of its operations.

Being one of the world’s largest users of natural resources, LUKOIL stringently abides by the highest global environmental standards and prides itself on the environmental management system it has in place.

Investments into future opportunities, including into innovations to gradually reduce the consumption of natural resources, materials and energy while maintaining the maximum possible output are considered by LUKOIL as its strategic priority. The Company is committed to seeking and utilizing new technologies that it believes to be one of the key preconditions not only for its own development, but also for the development of the entire country.

The following are the factors contributing to the Company’s success in finding solutions to those goals:

  • availability of well developed R&D infrastructure;

  • prospecting operational planning;

  • implementation of innovation projects;

  • international partnerships.

Due to the adopted scientific and technical development program the effort is now under way to create new technologies for the development of viscous oil and mature fields. The Group’s refineries and processing facilities are focused on the achievement of a better refining depth and facility upgrades.

The Company constantly tests new high-performance technologies to achieve its strategic goal of compensating production with the increment in reserves in the environment of an ever growing shortage in raw material resources. Thus, despite the fact that the reserves in the Company’s traditional regions have already been developed for a long time, the Company is still able to maintain stable well flow rates, while in a number of regions it even achieved improvement in production figures. The performance being demonstrated is a result of the use of innovation technologies and improvement of the quality of geological and hydrodynamic models. To improve performance of the production operations by cutting the costs and increasing productivity, the Company is running a program of pilot projects.

In 2015, 84 new technologies were tested of which 10 are now being considered for commercial application. In 2015 the Group performed ORE operations in 6.0 thousand wells, which is a 20% increase vs. the last year’s figure. Most incremental production was obtained by physical methods (more than 14 million tons). One of the high-performance ORE techniques is to drill sidetracks in the existing wells. This technique was again actively used in the reporting period. Thus, in 2015, 209 sidetracks were drilled at the Company’s fields to secure 6.2 million tons of incremental oil production. The success rate demonstrated by sidetracking operations is first of all conditioned by the preparation of scientifically substantiated mini-projects that involve the use of hydrodynamic modeling and higher-precision forecasting of the geology and composition of reserves within sidetracking zones.

* For subsidiaries only, without dependent companies.

High-viscosity oil and unconventional reserves

LUKOIL’s key priority in production is to increase the oil recovery ratio, which, in the long term, will help capture a significant potential of the available resource base. The Company develops and utilizes high-viscosity oil production techniques. One of the priority focus areas is represented by performance improvement of development operations and implementing new technologies in order to launch production of hard-to-recover reserves in a cost-efficient manner, utilization of innovation technologies at mature blocks.

Currently, the Russian Government offers incentives for production of high-viscosity oil making it more profitable by granting tax preferences applicable to the royalty and export duty. The vastest experience in development of high-viscosity oil reserves has been accumulated in the Komi Republic where the Group develops Yaregskoye and Usinskoye fields.

Usinskoye field’s Permian-Carboniferous deposit is developed using areal steam and cyclic steam formation treatment technologies. In 2015, the technology for directional treatment of carbonate reservoirs with the use of deviating acid compositions was successfully field tested and classified as commercial. In 2016, large-scale cyclic steam treatment operations at the edge of the Permian-Carboniferous deposit will be launched.

Yaregskoye field consists of Yaregskaya, Lyaelskaya, and Vezhavozhskaya areas. Oil is produced at Yaregskaya (thermoshaft production) and Lyayelskaya (steam assisted gravity drainage SAGD) areas. In 2015, the use of directional underground drilling technology at the Yaregskaya area enabled to increase the length of flat-dipping wells from 300m to 800m, and this, in its turn, helped significantly reduce the scope of mining operations and reduce the time till commencement of active development of the reserves. Pilot operations for introduction of SAGD technology within the system of 1km long horizontal wells are under way at Lyayelskaya field. In 2015, the oil flow rate was as high as 366513 bbl/day (50—70 tn/day).

Enhanced oil recovery techniques make it possible to significantly increase recoverable reserves through commercial production of high-viscosity oil reserves, as well as reserves in low-permeability reservoirs and hard-to-recover reserves of a mature field. LUKOIL utilizes physical, chemical, hydrodynamic and thermal reservoir treatment techniques. Most incremental production was obtained by physical methods (more than 15 million tons). One of the high-performance oil recovery enhancement techniques is to drill sidetracks in the existing wells. High performance of sidetracking operations is first of all conditioned by the preparation of scientifically substantiated mini-projects that involve the use of hydrodynamic modeling and higher-precision forecasting of the geology and composition of reserves within sidetracking zones. Please note that sidetracking is generally used with the idle well stock in order to recover additional residual oil reserves.

Texas Two Step enables to perform multizone hydraulic fracturing in a predefined sequence rather than gradually from the horizontal well bottom, which improves performance due to higher flow rates. LUKOIL became Russia’s first company to use this fracking technology in a sidetrack. Flow rates of horizontal wells with TTS multizone fracking are 4 times as high as those of the directional wells with regular fracking, and twice as high as those of horizontal wells with standard multizone fracking. Following successful tests, the technology was included into the design document for development of Imilorskoy-Istochny area. The oil flow rate of 806 bbl./day was recorded in the first well.

Prospecting activities in Perm Krai (Cis-Ural region) are complicated by numerous natural protection and water protection zones within the areas of occurrence of potassium and magnesium salts. Therefore, in order to reduce environmental impact, the Group introduced environmentally friendly seismic prospecting and drilling technologies. Environmentally friendly seismic prospecting is done with the use of small-size equipment towed by snowmobiles or mounted on a tool carrier. This helps reduce deforestation activities and preserve primeval soil, while ground water experiences almost no impact. In addition, environmentally friendly seismic prospecting makes it possible to operate within the areas located in difficult geological environments with minimum deviation from the planning scope of work.

The LUKOIL Group has developed the world’s first ever drives based on AC electronic motors that ensure a range of performance parameters enabling optimal process conditions to withdraw the well stream with minimum energy inputs and maximum service life. AC electronic motors help reduce energy inputs during oil production due to higher efficiency factors and lower operating currents, as well as due to the possibility to control the rotation speed and to operate in a cyclic mode.

In the long-term perspective induction motors will be replaced with AC electronic ones in all the wells.

The Group’s research institute has developed an unrivaled waste treatment technology for the waste generated by refineries when producing a high-octane gasoline component. The technology makes it possible to produce calcium fluoride from this waste, which can be used in the metal industry and which can completely replace the imported fluorspar, the natural equivalent of calcium fluoride, that is in high demand on the market.

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