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Press Release

LUKOIL REPORTS PRELIMINARY OPERATING DATA FOR THE SECOND QUARTER AND SIX MONTHS OF 2020

For the six months of 2020 LUKOIL Group's average hydrocarbon production excluding the West Qurna-2 project was 2,155 thousand boe per day, which is 8.4% lower year-on-year as a result of a significant production cut in the second quarter of 2020. The cut was due to the new OPEC+ agreement and a decrease in gas supply from Uzbekistan to China, that were driven by a negative impact of the COVID-19 pandemic on hydrocarbon demand.

 Hydrocarbon production, thousand boe per day

2Q    20201Q    2020 6M    20206M    2019
1,9812,328Total (excluding the West Qurna-2 project)2,1552,352

Oil production excluding the West Qurna-2 project was 40.2 million tonnes for the six months of 2020, which is 5.6% lower year-on-year due to a 12% production cut in the second quarter of 2020 compared to the first quarter. The cut was due to the new OPEC+ agreement concluded in April 2020, that led to limitations on oil production by the Group in Russia and at some international projects.

Oil production, thousand tonnes

2Q    20201Q    2020 6M    20206M    2019
18,81521,384Total (excluding the West Qurna-2 project)40,19942,598
17,87720,365Russia38,24240,787
17,75820,227Subsidiaries37,98540,481
119138Share in affiliates257306
9381,019Outside of Russia1,9571,811
565588Subsidiaries1,153960
373431Share in affiliates804851
1,065721Compensation oil from the West Qurna-2 project1,786775
19,88022,105Total 41,98543,373

Despite a sharp decrease in oil prices and external limitations on production volumes, active development of the priority projects continued. In particular, in West Siberia overall oil and gas condensate production at the V. Vinogradov, Imilorskoye, Sredne-Nazymskoye and Pyakyakhinskoye fields increased for the six months of 2020 by 27% year-on-year and exceeded 2.0 million tonnes.

Further development of the Yaregskoye field and Permian reservoir of the Usinskoye field, including the launch of new steam-generation facilities, allowed to increase high viscosity oil production for the six months of 2020 by 4.5% year-on-year, to 2.5 million tonnes.

Implementation of drilling programs at the V. Filanovsky and Yu. Korchagin fields in the Caspian Sea allowed to maintain production at project levels. Total oil and gas condensate production at these fields for the six months of 2020 was 3.7 million tonnes, flat year-on-year.

The share of the abovementioned projects in the LUKOIL Group's oil production excluding the West Qurna-2 project amounted to 20% for the six months of 2020 as compared to 18% for the six months of 2019.

Gas production, million cubic meters

2Q    20201Q    2020 6M    20206M    2019
6,3968,412Total14,80817,352
4,3054,665Russia8,9708,856
4,2844,643Subsidiaries8,9278,812
2122Share in affiliates4344
2,0913,747Outside of Russia5,8388,496
1,9333,581Subsidiaries5,5148,172
158166Share in affiliates324324

For the six months of 2020, LUKOIL Group's gas production was 14.8 billion cubic meters, which is 14.7% lower year-on-year. The decline was due to lower demand from China for gas produced in Uzbekistan amid the COVID-19 pandemic. At the same time gas production in Russia increased by 1.3% year-on-year driven by the launch of the second stage of the booster compressor station at the Nakhodkinskoye field in December 2019.

Refinery throughput, thousand tonnes

2Q    20201Q    2020 6M    20206M    2019
13,52517,090Total for LUKOIL Group refineries30,61533,491
9,28310,937Russia20,22021,716
4,2426,153Outside of Russia10,39511,775
3,9985,590Oil processing9,58810,778
244563Refined products processing807997
2453Third party refineries abroad773,231

For the six months of 2020 refinery throughput at LUKOIL Group's refineries was 30.6 million tonnes, which is 8.6% lower year-on-year. The decline was due to scheduled maintenance works and throughput optimization at some of the Company's refineries in the second quarter of 2020 on the back of lower demand for petroleum products and decline in refining margins due to the COVID-19 pandemic.

Refinery throughput in Russia for the six months of 2020 decreased by 6.9% due to scheduled maintenance works and throughput optimization at the Nizhny Novgorod and Ukhta refineries in the second quarter of 2020. At the same time, throughput at the Perm and Volgograd refineries remained unchanged compared to the first quarter of 2020. Refinery throughput in Europe for the six months of 2020 decreased by 11.7% due to scheduled maintenance works at refineries in Bulgaria and the Netherlands, as well as throughput optimization at European refineries in the second quarter of 2020.

Note:

LUKOIL will release its Condensed Interim Consolidated Financial Statements prepared in accordance with IFRS and MD&A for the second quarter and six months of 2020 on August 27, 2020.

The information in this press release is an estimate of the LUKOIL Group's results for the second quarter and six months of 2020 and therefore constitutes forward-looking statements. This information is preliminary and based on information available at the date of this document, and may be revised after statistical, financial, tax and accounting statements become available. The information on the LUKOIL Group's operational results in this press release are subject to many external factors which may cause the actual results to differ materially from those expressed or forecasted in this press release for the second quarter and six months of 2020. The LUKOIL Group assumes no obligation to update or alter its forward-looking statements, whether as a result of new information, subsequent events or otherwise, except to the extent required by applicable law.

This document does not constitute or form part of an invitation or inducement to engage in investment activity with, or any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of, the LUKOIL Group, nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of, or any investment in, the LUKOIL Group.

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