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I. Graifer, Chairman of the Board of directors of LUKOILV. I. Graifer, Chairman of the Board of directors of LUKOILV. Alekperov, President of OAO LUKOIL V. Alekperov, President of OAO LUKOIL Oilmen of LUKOILOilmen of LUKOILProduction facilities of the Caspian Yuri Karchagin fieldProduction facilities of the Caspian Yuri Karchagin fieldOffshore platforme D6 in the Baltic Sea. Kratsovskoe fieldOffshore platforme D6 in the Baltic Sea. Kratsovskoe field Permnefteorgsintez Refinery Permnefteorgsintez RefineryVolgograd RefineryVolgograd Refinery Uhtaneftepererabotka Refinery Uhtaneftepererabotka Refinery Nijnegorodnefteorgsintez Refinery Nijnegorodnefteorgsintez RefineryMini refineries in KogalymMini refineries in KogalymPetrotel-LUKOIL (Romania)Petrotel-LUKOIL (Romania)LUKOIL Neftokhim Burgas (Bulgaria)LUKOIL Neftokhim Burgas (Bulgaria)Odessa Refinery (Ukraine)Odessa Refinery (Ukraine)Filling station commissioning in New-YorkFilling station commissioning in New-YorkChange of brand of a filling station in the USAChange of brand of a filling station in the USADmitry Medvedev, Prime Minister of the Russian Federation, visited the ice-rsistant platform at the Y.Korchagin field in the Caspian Sea. October 02, 2013Dmitry Medvedev, Prime Minister of the Russian Federation, visited the ice-rsistant platform at the Y.Korchagin field in the Caspian Sea. October 02, 2013President of Russia Dmitry Medvedev visited Krasnodarskaya Combined Heat and Power Plant (CHPP) of OOO LUKOIL-Kubanenergo and participated in the launch of a new 410 MW combined-cycle gas turbine (CCGT-410). October 8, 2011President of Russia Dmitry Medvedev visited Krasnodarskaya Combined Heat and Power Plant (CHPP) of OOO LUKOIL-Kubanenergo and participated in the launch of a new 410 MW combined-cycle gas turbine (CCGT-410). October 8, 2011The first large-tonnage oil shipment through the FOIROT (Varandey Oil Export Terminal). June 9, 2008The first large-tonnage oil shipment through the FOIROT (Varandey Oil Export Terminal). June 9, 2008Mounting of mooring cargo handling system on the FOIROT (Varandey Oil Export Terminal)Mounting of mooring cargo handling system on the FOIROT (Varandey Oil Export Terminal)Loading of FOIROT onto sea-going barges (Varandey Oil Export Terminal)Loading of FOIROT onto sea-going barges (Varandey Oil Export Terminal)Construction of Varandey TerminalConstruction of Varandey TerminalCommissioning of a catalytic reforming installation at the Volgograd RefineryCommissioning of a catalytic reforming installation at the Volgograd RefineryNakhodkinskoye gaz field commissioningNakhodkinskoye gaz field commissioningOil Spill Response Exercise in the Caspian SeaOil Spill Response Exercise in the Caspian SeaInternational training exercises at Varandey oil export terminalInternational training exercises at Varandey oil export terminalAnti-terrorism exercises at Vysotsk oil terminalAnti-terrorism exercises at Vysotsk oil terminalInternational anti-terrorism exercises at Volgograd RefineryInternational anti-terrorism exercises at Volgograd RefineryInternational exercise at RPK-Vysotsk LUKOIL-IIInternational exercise at RPK-Vysotsk LUKOIL-IIFire-prevention trainings in Kaliningrad RegionFire-prevention trainings in Kaliningrad RegionExercises Kaliningrad 2004Exercises Kaliningrad 2004Post cardsPost cardsSecuritiesSecuritiesPhotoPhotoEnvelopesEnvelopesStampsStampsReportsReportsFor Investors and AnalystsFor Investors and AnalystsFor ShareholdersFor ShareholdersGeneral Shareholders MeetingsGeneral Shareholders MeetingsShareholders EquityShareholders EquitySecurities trading statisticsSecurities trading statisticsFCA DisclosureFCA DisclosureFinancial ReportsFinancial ReportsLUKOIL Annual ReportsLUKOIL Annual ReportsLUKOIL Data BooksLUKOIL Data BooksLUKOIL Fact BookLUKOIL Fact BookSustainability ReportSustainability ReportCorporate Governance ReportCorporate Governance ReportFinancial FundamentalsFinancial FundamentalsOperating HighlightsOperating HighlightsPresentationsPresentationsFinancial CalendarFinancial CalendarInvestment calculatorInvestment calculatorAnalyst CoverageAnalyst CoverageInvestor Trips to Sites Investor Trips to Sites ContactsContactsPerm (2013)Perm (2013)Lower VolgaLower VolgaUzbekistanUzbekistanPerm (2003)Perm (2003)Karachaganak Karachaganak West SiberiaWest SiberiaEgyptEgyptShareholder Relations Policy of OAO LUKOILShareholder Relations Policy of OAO LUKOILInvestment calculatorInvestment calculatorDividendsDividendsDepositary Receipts Depositary Receipts FAQFAQContactsContactsAnnual General Shareholders MeetingAnnual General Shareholders MeetingExtraordinary General Shareholders Meeting Extraordinary General Shareholders Meeting History of Share Capital History of Share Capital ShareholdersShareholdersCompany SecuritiesCompany SecuritiesShare price informationShare price informationDebt securities price informationDebt securities price informationShare price historyShare price historyInvestment calculatorInvestment calculatorOil and Gas ReservesOil and Gas ReservesExplorationExplorationOil ProductionOil ProductionGas Production Gas Production Oil RefiningOil RefiningOils and lubricantsOils and lubricantsGas Processing Gas Processing PetrochemicalsPetrochemicalsCrude Oil DeliveriesCrude Oil DeliveriesGas DeliveriesGas DeliveriesPetroleum Product MarketingPetroleum Product MarketingPersonnel Management PolicyPersonnel Management PolicySocial Code of OAO LUKOIL Social Code of OAO LUKOIL Charity and Social ActivitiesCharity and Social ActivitiesSportsSportsCorporate retirement programCorporate retirement programSupport for Orphanages and Educational Establishments for ChildrenSupport for Orphanages and Educational Establishments for ChildrenEducation Programs Education Programs Support for Medical Institutions Support for Medical Institutions Social Project ContestSocial Project ContestSupport for Museums and Creative TeamsSupport for Museums and Creative TeamsPublishing ProjectsPublishing ProjectsSupport for Religious ConfessionsSupport for Religious ConfessionsTargeted AssistanceTargeted AssistanceCorporate VolunteeringCorporate VolunteeringOAO LUKOIL's Special Projects OAO LUKOIL's Special Projects Corporate Sporting Events Corporate Sporting Events Company Policy Company Policy Caring for the Environment Caring for the Environment cological monitoringcological monitoringCertificationCertificationImplementing the Kyoto ProtocolImplementing the Kyoto ProtocolGreen InitiativesGreen InitiativesNew Generation Motor FuelNew Generation Motor FuelUtilization of Associated Petroleum GasUtilization of Associated Petroleum GasGreen News LukoilGreen News LukoilRenewable energyRenewable energyAssociated SitesAssociated SitesSubsidiaries' WebsitesSubsidiaries' Websites
Caring for the Environment

Environmental Protection in LUKOIL Group in 2012

A task-level environmental protection program was developed as part of the 2012-2021 LUKOIL Group Development Strategy. The following strategic guidelines for environmental safety promotion were identified:

       Achievement of 95% utilization of associated petroleum gas;

       Ending discharge of effluent into natural water bodies;

       Reducing greenhouse gas emissions and obtaining additional income through implementation of the mechanisms of Article 6 of the Kyoto Protocol;

       Fully overcoming the aftermath of previous environmental damage;

       Obtaining a ratio no higher than 1x between waste accumulation and use/recycling of waste;

       Reduction of pipeline failures and purification of land that has been damaged as a result of such failures

LUKOIL acknowledges its responsibility to society for rational use of natural resources and preservation of the environment. The Company therefore observes the highest standards of care for the environment and of industrial safety in its operations.

Over USD 700 million was allocated for environmental safety measures in 2012. A significant share of this money (more than 50%) was spent to protect air quality, including increased levels of associated gas utilization. A further 35% of the total were spent to address the consequences of accidents.

The Company achieved reduction of per unit environmental impact indicators in nearly all business sectors during 2012:

       Release of pollutants into the atmosphere was reduced by nearly 14%, thanks mainly to steps as part of the corporate program to increase utilization of associated gas, thereby reducing combustion of the gas at field flares;

       The area of polluted land was reduced by 17% thanks to reclamation work;

       The number of incidents that caused damage to the environment was reduced by 12.5%. Nearly all of the accidents were caused by pipeline failures. Major repairs to pipelines are being carried out in order to minimize such failures.

Main environmental actions by LUKOIL Group organizations in 2012 are presented in the following table:


Main actions in 2012

Rational use of water resources,

preventing water pollution

Diagnostics and major repairs to pipelines (905 km, +36% compared with 2011) and application of corrosion inhibitors to pipelines.

Building preliminary water-discharge systems and systems for utilization of formation water.

Checking the condition of pipeline crossings over water.

Purification of polluted ground water from drainage systems.

Modernization of existing purification facilities and installation of new facilities.

Reduction of atmospheric

pollutant emissions

Modernization and construction of facilities to increase the rate of utilization of associated gas.

Modernization and construction of new, more efficient combined-cycle turbines at generating facilities.

Replacement of equipment for the reduction of pollutant emissions: replacement of lateral seals, modernization and replacement of furnaces, replacement of pumping equipment.

Better use of technologies: timely regulation of combustion in furnaces, boilers, etc.

Utilization of accumulated

waste containing oil

Increase of sub-contractor works to neutralize waste.

Construction of a complex for processing of waste containing oil.

Construction of specialized zones for utilization of production waste.

Preventing pollution and ensuring

rational use of land

Reclamation of disturbed land and land polluted by crude oil (2,464 and 159 hectares, respectively).

Diagnostics and major repairs to pipelines, and application of corrosion inhibitors.

Preserving biodiversity

Financing of work to replenish fish stocks.

Monitoring of environmental components.

Environmental Protection in LUKOIL Group in 2011
Environmental Protection in LUKOIL Group in 2010
Environmental Protection in LUKOIL Group in 2009

In 2009,LUKOIL Group implemented its environmental measures in accordance with the objectives and obligations set out in the Companys Health, Safety and Environment Policy. OAO LUKOILs Management Committee approved its new Policy in March 2009, which came about as a result of the Companys 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 Programs 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 Groups Organizations approved by the Companys 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 Companys 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 Companys 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 a project 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);

b) Establishment of the Refining in Russia business sector

-        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 the facilities 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).

LUKOIL Group continues to upgrade its refining facilities aiming to increase the recovery rate, minimize environmental risks and improve the environmental properties of produced oil products. In 2009, an isomerization unit was commissioned at OOO LUKOIL-Ukhtaneftepererabotka. This enabled the plant to produce Euro-3 and Euro-4 gasolines. The Bulgarian refinery LUKOIL-Neftokhim Burgas replaced an obsolete sulphuric-acid-alkylation unit with a new facility that embraces the best available technologies for gas and waste-water treatment.

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 Groups 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.

Environmental Protection in LUKOIL Group in 2008
Environmental activities of LUKOIL and its subsidiaries in 2005

Environmental activities of LUKOIL and its subsidiaries in 2004

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