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Archive. Results. 2014

In 2014 LUKOIL launched the 5th Corporate Environmental Safety Program of LUKOIL Group Companies for 2014-2018. About 59.2 billion Rubles were invested in environmental protection in 2014.

Considerable financial resources were deployed in 2014 by LUKOIL Group companies in the following areas:

  • air protection (41.8 billion Rubles, more than 70% of total environmental protection costs), including  34.4 billion Rubles  to increase APG utilization rate, about 7 billion Rubles to build units to remove air pollutants  from oil, oil products and tail gas as well as vapor recovery units;

  • accident prevention and response, including diagnostics, replacement and corrosion protection of pipelines (12.6 billion Rubles, 21%);

  • disposal of production waste (1.1 billion Rubles, 1.9%);

  • protection and rational use of water resources (1.1 billion Rubles, 1.9%).

AreaMajor Activities in 2013—2014

Rational use of water resources, preventing pollution of water bodies

  • diagnostics, overhaul and corrosion protection of pipelines;

  • construction of preliminary separation and disposal systems for formation water;

  • inspection of pipeline water crossings;

  • remediation of contaminated groundwater from drainage systems;

  • upgrade of existing and construction of new treatment facilities.

Reduction of pollutant emissions

  • Reduction of pollutant emissions

  • upgrade and construction of facilities to increase the APG utilization rate;

  • upgrade and construction of new power generation facilities with enhanced environmental characteristics and higher performance efficiency;

  • replacement and upgrade of equipment at facilities of the Company (staffing box packing, process furnaces, boilers, pump equipment) in order to reduce pollutant emissions;

  • optimization of applied technology — timely adjustment of operation modes of furnaces, boilers, etc. 

Disposal of accumulated oil-contaminated waste

  • increasing the scope of waste neutralization work;

  • bringing the oil-contaminated waste recycling complex in Perm to the design capacity;

  • construction of industrial waste

  • disposal polygons.

Preventing contamination and rational use of land resources

  • remediation of disturbed and oil-contaminated land;

  • ratio of the contaminated land area at year end to the contaminated  land area at the beginning of the year: 2013 — 0.76, 2014  — 0.81.

  • ratio of the disturbed land area at year end to the disturbed land area at the beginning of the year:   2013 — 1.23, 2014  — 1.08. Land is disturbed in areas leased for exploration and development of oil and gas fields. Land plots of this category are returned only after the field development is completed;

  • diagnostics, overhaul and corrosion protection of pipelines;

Conservation of biodiversity

  • financing of activities to replenish fish resources;

  • dedicated monitoring of environment components.

In 2012 the Government increased charges for APG flared above the allowable level (see APG Utilization Section).  Since 2013 costs related to APG utilization are being recognized as environmental protection costs.

In 2014 key unit indicators of environmental impact decreased, while the remaining indicators have stabilized.  For trends of unit environmental impact indicators on all business sectors of the Company see the Sustainability Report of the LUKOIL Group for 2013—

Major share (88%) of pollutant air emissions of the LUKOIL Group come from its oil and gas production companies (OGPC) and APG flaring byproducts contribute up to 75% to the total level of OGPC emissions considering the current level of APG utilization.

In 2014 OGPC of the LUKOIL Group flared 1.081 billion cubic meters of APG which is 15% less than in 2013 (1.267 bcm). The level of APG use throughout the LUKOIL Group has increased from 87.7% to 89.9%, while the volumes of its production and use have increased from 10.3 to 10.7 bcm (3%) and from 9.1 to 9.6 bcm (6%), respectively.

The level of APG utilization has already reached the target established by the Government of Russia, 95%, on LUKOIL's fields in Western Siberia, Baltic Sea and Lower Volga Region, including the North Caspian.  The entire LUKOIL Group is expected to reach the 95% target for APG utilization in 2019.

As part of developing its production capacity, the Company is building sweetening units to remove sulfur-bearing pollutants from oil and oil products. Oil treatment plants at Bayandyskoye and Vostochno-Lambeyshorskoye fields are equipped with sulfur removal, recovery and granulation units.

LUKOIL-Volgogradneftepererabotka is building a sulfur recovery plant which includes units for  amine regeneration, sour waste stripping, tail gas treatment and sulfur granulation.

96% of water consumed by the LUKOIL Group is used for production needs, of which 70% are used by electrical and thermal power generation facilities and more than 17% are used for the needs of the formation pressure maintenance system.

Decrease in water consumption and resulting decrease in waste water disposal in 2014 was due to the introduction of a more high-tech and resource saving equipment at power generation facilities of the Company. The volume of water injected to the formation pressure maintenance systems (including produced water) has increased by 2.5% to 548.5 million cubic meters. The share of polluted (insufficiently treated) waste water of the LUKOIL Group in 2014 remained at 0.6% of the total volume of waste water. About 70% of contaminated waste water are produced by the Power Generation Business Segment, as in 2013 the above-mentioned decision was made to place the majority of the water supply and disposal facilities of LUKOIL Group companies under management of LUKOIL-ENERGOSETI.

Adoption of Federal Law No.261-FZ On Amending the Subsoil Law of the Russian Federation and Certain Legislative Acts of the Russian Federation has minimized the risk of imposing penalties on companies of the LUKOIL Group for re-injection of produced water (as produced water is no longer considered to be production waste).

Increased waste generation in 2014 was due to the increased drilling scope. Drilling waste accounts for more than 90% of the total waste produced by OGPC. Increased waste generation was fully compensated by the increased volume of waste disposal, the ratio of waste disposal to waste generation in 2014 was equal to 1.

Incident Rate

In 2014 there were 87 incidents resulting in a damage to environment:

Volume of spilled oil: 2013 — 56.8 tons, 2014 — 106.6 tons.

At the same time, diagnostics, major overhaul and corrosion protection of pipelines resulted in the reduction in the number of pipeline ruptures per km per year: 2013— 0.156, 2014 — 0.147.