Total volume of crude oil sales by the Company in 2011, including deliveries for refining at the Company’s own refineries and at third-party refineries, was 110 million tonnes. Deliveries of oil to the domestic market were more efficient than most non-CIS delivery export routes, therefore substantial volumes of oil were reallocated from less efficient export routes to Company refineries or to the domestic market. Refining at facilities inside Russia remains the most efficient use of crude oil produced by LUKOIL. Crude oil deliveries to Group refineries in Russia in 2011 were 45.3 million tonnes in 2011, which is almost the same as in 2010.

Deliveries of LUKOIL feedstock to the Group’s foreign refineries and to the ISAB and Zeeland complexes were 19.6 million tonnes in 2011, which is 6.3% less than in 2010, mainly due to suspension of operations at the Odessa Refinery at the end of 2010. Deliveries of oil for refining at third-party refineries outside Russia totalled 0.27 million tonnes, which is many times more than in 2010 thanks to resumption of deliveries to refineries in Belarus and growth of deliveries to refineries in Kazakhstan.

Crude oil sales on the domestic market totaled 4.5 million tonnes in 2011, exceeding the figure in 2010 by 22.8%. Domestic crude sales contracts are arranged to ensure guaranteed take-up of crude oil on the domestic market using formulas that offer a premium to the export alternative.

Crude oil exports from Russia by LUKOIL subsidiaries (including oil acquired from other producers) were 34.7 million tonnes in 2011 (696,800 barrels per day), which is 14.5% less than in 2010. Lower exports were the result of lower output of crude oil.

Most of the Company’s exports of crude oil are delivered via the Transneft pipeline system (deliveries via the system accounted for 84.7% of exports), but Transneft deliveries declined by 6.9% in 2011 to 29.4 million tonnes. The share of export deliveries by-passing the Transneft system decreased in 2011 from 22.2% to 15.2%, due to reduction of output at the Yuzhno-Khylchuyuskoye field. The latter deliveries were valued on the basis of actual quality of the crude oil, with a premium to the Urals price.

The Company exported 5.1 million tonnes of crude oil via its own transport terminals in 2011. Exports through the Varandey terminal accounted for 4 million tonnes, and exports through the port of Svetly were 1.1 million tonnes.

Sales of crude oil on the international market (including exports) were 43.8 million tonnes in 2011, of which 6.2 million tonnes were sold in the CIS countries and 37.6 million tonnes on other markets. Total sales of oil on Russian and international markets in 2011 were 48.3 million tonnes, which is 6.1% less than in 2010

Crude Oil Deliveries in depth: