In 2009,LUKOIL Group implemented its environmental measures in accordance with the objectives and obligations set out in the Company's Health, Safety and Environment Policy. OAO LUKOIL's Management Committee approved its new Policy in March 2009, which came about as a result of the Company's promotion of its operations in various areas, including the environment.
Implementation of the 2004-2008 Environmental Safety Program of LUKOIL Group's Organizations has been summarized. LUKOIL Group spent RUR 32.2 billion to implement this Program (95% of the Program's target cost). The results obtained from this Program reveal that the targets have generally been accomplished. However, some environmental challenges still exist, including waste products accumulated over the previous years and use of associated petroleum gas. These issues are addressed by the 2009-2013 Environmental Safety Program of LUKOIL Group's Organizations approved by the Company's Management Committee in April of 2009. The new environmental safety program includes 483 measures with the total cost estimated at RUR 58.5 billion.
The Company signed a USD 300 million loan agreement with the European Bank for Reconstruction and Development (EBRD) to finance some activities listed in the Environmental Program. In 2008 EBRD experts reviewed the implementation of the projects funded by the borrowed funds in Perm region and declared the results satisfactory. In 2009 the Company worked jointly with the EBRD to adjust the List of Projects funded by the loan; the Company submitted a report to EBRD regarding the projects implemented in 2008.
The Company proceeded with implementation of the Corporate Planning Concept for LUKOIL Group's organizations, based on the Kyoto Protocol. The Company's Management Committee reviewed the implementation of the Integrated Action Plan related to this Concept: the Company took an inventory of greenhouse gases emitted by LUKOIL Group companies followed by an independent review of this inventory; and based on their analysis, the Company developed a carbon investment project portfolio. Three pilot projects aiming at reducing greenhouse-gas emission were reviewed by independent experts. The Company approved its plan to develop specialized carbon documentation for potential projects. It developed draft standards regulating performance of a management system for greenhouse-gas emissions and also the order of implementing projects designed to reduce greenhouse-gas emissions within LUKOIL Group.
OOO LUKOIL-KMN, OOO LUKOIL-Komi, OAO Varandeisky Terminal, and OAO LUKOIL-Nizhegorodnefteorgsintez are developing pilot projects focused on creation of systems of production environmental monitoring (PEM) that are governed by the requirements set forth in OAO LUKOIL's standards.
In 2009 LUKOIL Group organizations enacted multiple environmental safety measures with a total cost of RUR 13.3 billion to mitigate the environmental impact of the Company's production facilities.
Key environmental safety measures implemented by the LUKOIL Group organizations included:
a) Establishment of two business sectors: Oil and Gas Production in Russia and Gas Processing:
troubleshooting and overhaul of transportation pipelines (623 km) and their inhibitor protection;
upgrade and construction of facilities to increase the levels of associated- petroleum-gas utilization (gas-turbine power plants at Tevlino-Russkinskoye field operated by OOO LUKOIL-Western Siberia, Tedinsky field operated by OOO LUKOIL-Komi, Andreevskoye field operated by OOO LUKOIL-Volgogradneftegaz, a gas-piston power plant at Serginskoye field operated by RITEKBeloyarskneft Production Association of OAO RITEK; facilities for the gathering and compression of petroleum gas installed at the fields operated by Yamalneftegaz Territorial Production Association of OOO LUKOIL-Western Siberia in Purovsky district, at Kyrtaelsky field operated by TPP LUKOIL-Ukhtaneftegaz of OOO LUKOIL-Komi; and aproject entitled "The Utilization and Sale of Associated Petroleum Gas in the Upper Kama" in Perm region, etc.);
well stock operations focusing on the conservation of underground mineral resources;
construction of water treatment facilities at Kamenny licensed area of OOO LUKOIL-Western Siberia and Pashshorsky field operated by OOO LUKOIL-Komi; reconstruction of Krivoye water intake of Oil and Gas Production Workshop-11; construction of an oil remover on the Kama river operated by OOO LUKOIL-PERM;
commissioning of a landfill to dispose of hazardous production waste at the integrated base of OOO LUKOIL-Nizhnevolzhskneft at Ilyinka settlement; reconstruction of landfills for solid domestic and production waste at Severo-Danilovskoye and Urievskoye fields operated by OOO LUKOIL-Western Siberia; groundbreaking of a landfill at Vatiegansky field operated by OOO LUKOIL-Western Siberia; acquisition of a mobile oil-sludge-disposal facility for RITEKBeloyarskneft Production Association of OAO RITEK;
purchase of equipment for potential oil and oil-product emergency spill response;
reclamation of disturbed and oil-cut soils (2,754 hectares and 62 hectares, respectively);
financing of remediation measures to replenish the fish stock (OOO LUKOIL-Nizhnevolzhskneft and OOO LUKOIL-Komi);
introduction of integrated monitoring of environmental media, including satellite monitoring of the Baltic Sea (OOO LUKOIL-KMN);
efficient management of water resources and prevention of water pollution (OOO LUKOIL-Permnefteorgsintez and OOO LUKOIL-Volgogradneftepererabotka completed a large-scale reconstruction of treatment facilities; OOO LUKOIL-Permnefteorgsintez proceeded with the construction and assembly of a water-discharge header in the Kama river; OOO LUKOIL-UNP constructed and reconstructed new and existing water-supply and discharge systems; OOO LUKOIL-Nizhegorodnefteorgsintez constructed the Vemko-2 industrial-effluent-treatment facility);
reduction of air-pollutant emissions (OOO LUKOIL-Permnefteorgsintez assembled 2 flotation tanks and worked on the replacement and upgrading of process furnaces; the Company also replaced obsolete equipment and optimized technologies to reduce pollutant emissions at other refineries and plants);
disposal of accumulated oil-containing waste (OOO LUKOIL-Volgogradneftepererabotka disposed of accumulated viscous waste (69,800 tons); OOO LUKOIL-Permnefteorgsintez continued with its construction of an oil-containing waste recycling facility; it commissioned the first stage of thefacilities in 2009);
coordinated prevention of pollution and efficient management of land resources (OOO LUKOIL-Volgogradneftepererabotka reclaimed a decommissioned landfill for solid industrial waste; OOO LUKOIL-UNP reclaimed lands at local treatment facilities, at sludge pit No. 5, around the oil-and-sludge receiving tank and the non-used part of sludge tank No. 8; lands at de-assembled reservoir fleets No. 8 and No. 8a, with a total area of 7.51 ha, were handed over to the Reclaimed Land Acceptance Committee).
Since 2009, the consolidated environmental safety indicators have included data specific to organizations of the new business sector, Power Generation, purchased by YuGK TGK-8 Holding. Power Generation organizations are large consumers of natural resources: in 2009 they accounted for 2.7% of LUKOIL Group's consolidated air emissions; over 95% of water consumption (the production needs of hydroelectric power plants); 10.4% of discharged waste water, and 2.2% of generated waste. In 2009, audits were carried out at all Power Generation organizations to identify environmental issues, challenges and activities required to integrate these organizations into the corporate Health, Safety and Environment system.
OAO LUKOIL launched a campaign to identify and develop alternative energy sources to increase the portion of environmentally friendly energy sources. Top priority alternative renewable energy sources include water, wind, solar and geothermal energy. Alternative energy sources are currently being developed through the implementation of small-scale projects aimed at addressing local power-supply issues at the Company's sites. The Company installed solar power plants at two gas stations in Serbia and Russia (Krasnaya Polyana in Krasnodar region) in 2009.
LUKOIL Group carries out regular trainings and exercises at all of its marine and river terminals, at oil and oil-product production sites, and at refining and storage facilities in order to keep the staff and facilities on alert for a possible emergency oil-spill response. In 2009, the Company conducted a total of 86 emergency response exercises related to oil and oil-product spills. The Company, the Russian Maritime Registry of Shipping and the Federal State Unitary Enterprise Rosmorport have entered into cooperation agreements to ensure the safety of transportation and bunkering.