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Results

In 2015 the Company continued its effort in implementing the 5th corporate Environmental Safety Program of the LUKOIL Group Organizations for 2014-2018. Last year about RUB 48.4 bln. was allocated for environmental activities.

The larger share of the funds was allocated in 2015 to the LUKOIL Group Organizations to cover the following activities:

  • atmospheric air protection (RUB 27.4 bln., more than 57% of the total environmental spendings), including RUB 18.23 bln. to increase APG utilization, around RUB 8 bln. for the construction of purification units for the products (oil and petroleum products) and off-gases remaining from air pollutant compounds, petroleum vapor recuperation units;

  • prevention and remediation of accidents, including pipeline diagnostics and inhibitor protection (RUB 12.9 bln., 27%);

  • industrial waste recycling activities (RUB 1.1 bln., more than 2%);

  • protection and sustainable use of water resources (RUB 4 bln., 8%).

AreaMajor 2015 Events
Sustainable use of water resources, prevention of water body contamination
  • diagnostics and overhaul of the pipeline transport, as well as inhibitor protection;

  • construction of formation water preliminary discharge and utilization systems; 

  • inspection of pipeline water crossings;

  • purification of the contaminated ground water from drainage systems;

  • upgrade of the existing and new water treatment facilities.

Reduced atmospheric pollutant emissions
  • upgrade and construction of facilities enhancing APG utilization;

  • upgrade and construction of new power generating units for the power engineering facilities with enhanced KPI and high efficiency factor;

  • replacement and upgrade of the equipment at the Company's facilities (rope packings, process furnaces, pumping equipment) aimed at reducing pollutant emissions;

  • optimization of applied techniques: timely adjustment of combustion modes for furnaces, boilers, etc.

Oil waste disposal

  • increased scope of waste neutralization operations;

  • bringing the Perm treatment facility for oil-contaminated waste to its rated capacity;

  • landfill construction.

Prevention of soil contamination and sustainable use of land

  • reclamation of disturbed and oil contaminated land;

  • year end vs. year beginning: the contaminated land area was: 0.76 in 2013, 0.81 in 2014; 0.8 in 2015;

  • year end vs. year beginning: the disturbed land area was: 1.23 in 2013, 1.08 in 2014; 1.15 in 2015. Topsoil disturbance occurs in the areas leased for field exploration and development. The land belonging to this category will be returned following completion of the field development operations;

  • diagnostics and overhaul of pipeline transport, as well as inhibitor protection.

Biodiversity conservation
  • financing of compensation operations for fish breeding;

  • targeted monitoring of environmental factors.

Growth of the excessive environmental payments in 2012 was conditioned by the enactment of new legal requirements. Since 2012 increased fees have been charged for APG flaring in excess of the norms (refer to "APG Utilization"). In 2013, costs associated with useful APG utilization were classified as environmental expenses.

2015 saw reduction of the key specific environmental impact indicators, while the rest of them demonstrated stability. For changes in specific environmental impact indicators across all the Company's business sectors please refer to the  Report on Sustainable Development of the LUKOIL Group.

LUKOIL Group's oil and gas production companies (OGPC) account for most of the air emissions (85%), and given the current APG utilization the related flaring by-products account for 65% of the total OGPC emissions.

In 2015 the LUKOIL Group's overall APG utilization grew up by 2 percent from 90.1% to 92,0% which is well in excess of the 2015 planning APG utilization of 90.9%.

The APG utilization at the Company's fields in West Siberia, the Baltic Sea, and the Lower Volga Region, including the Northern Caspian Sea, has already reached the 95% level established by the Russian Government. The 95% level across the LUKOIL Group will be achieved in 2019.

For the purposes of reducing air emissions the following major activities were undertaken by the Business Segment Oil Refining in Russia in 2015: construction of a combined sulphur production unit with the sections for amine regeneration, sour water stripping, tail gas recovery, and sulphur granulation at LUKOIL-Vogogradneftepererabotka, and reconstruction of a gas desulphurization unit used to remove hydrogen sulfide and process furnaces at LUKOIL-Permnefteorgsintez.

Ninety-six percent of the water consumed by the LUKOIL Group is used to satisfy production needs, while about 70% of it is utilized for the needs of power and heat generation facilities, and more than 18% is used to support operation of the formation pressure maintenance systems.  Higher water consumption in 2015 accounts for the needs of formation pressure maintenance systems operated at the Company's OGPCs. Volumes of water injected into the FPM system (including produced water) recorded a 4% increase.

Enactment of Federal Law No. 261-FZ "On Amendments to the Russian Federation Law "On Subsurface" and certain legislative acts of the Russian Federation" significantly minimized the risk of penalties imposed against the LUKOIL Group Organizations for the injection of produced water into subsurface (recognition of the produced water as a waste product).

Great attention is paid by all stakeholders to the protection of water resources. The share of contaminated or insufficiently treated wastewater (the water that underwent pre-treatment that is still not in line with the permissible standards with regard to certain indicators as determined for fishing water bodies) of the total waste water volume of the LUKOIL Group Organizations is under 1%. In 2015, the volume of contaminated/insufficiently treated wastewater reduced by 8%.

The reduction of industrial waste generation in 2015 is conditioned by a lower scope of drilling operations. The consolidated waste utilization to generation ratio made 0.9 in 2015.

Accident rate

Accident consequences over the last three years: 56.8 tons in 2013; 106.6 tons in 2014; 25.3 tons in 2015 of oil and petroleum products contained and recycled as part of the oil spill response activities.

Diagnostics and overhaul of the pipeline transport, as well as inhibitor protection make it possible to keep the specific line rupture figure (events per km per year) at about the same level: 0.156 in 2013, 0.147 in 2014, 0.150 in 2015.

In 2015, the share of LUKOIL Group's annually replaced pipelines made 2.4% of their total length.

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