About the Company: highlights of the year

Public Joint-Stock Company “Oil Company ‘LUKOIL’” is one of the world’s largest publicly traded, vertically integrated oil and gas companies in terms of total proved reserves and hydrocarbon production. PJSC LUKOIL is the corporate center of LUKOIL Group. LUKOIL Group entities employs over 100 thousand people across the globe – in Russia, Europe, Asia, Africa, and the Americas (more than 30 countries worldwide). LUKOIL stays true to its mission of making the energy of natural resources serve the interests of and provide benefits to humankind. We strive for technological leadership that is based on an ecological balance so that all of us can share in a prosperous future.

LUKOIL Group’s operations and financial activities are coordinated from its head office located in Moscow in the Russian Federation. We divide our operations into three business segments:

 
  • Exploration and Production
  • Refining, Marketing and Distribution
  • Corporate and other

Exploration and production

The Company has a high-quality portfolio of assets, diversified both geographically and by type of reserves. Our proved reserves of oil and gas are mostly conventional. In 2020, they amounted to 15.4 billion BOEAccording to the classification of the Securities and Exchange Commission (SEC); BOE — barrels of oil equivalent., 24 percent of which was gas. The Company’s proved reserve life is 20 years.

LUKOIL Group’s oil and gas condensate production in 2020, excluding the West Qurna-2 project, was 77.2 million tonnes, 10.1 percent lower than in 2019. This decrease is attributable to the OPEC+ agreement and the impact of the COVID-19 pandemic on global demand for hydrocarbons. Despite a sharp decline in oil prices and external restrictions on production output, we continued with our forward-looking strategy based on the development of priority projects in Western Siberia, the Caspian Sea, and the Komi Republic. During the year the Company launched oil production at nine new fields in Western Siberia, the Volga Region, the Urals, and Timan-Pechora.

Refining, marketing and distribution

This business segment includes organizationsThis business segment includes several business sectors, such as: Oil refining in Russia, Oil refining abroad, Petrochemicals, Oil product supply in Russia, Oil product supply abroad, Transportation, and Other entities from the Refining, Marketing and Distribution business segment. whose operations relate to the refining of hydrocarbons, transportation, wholesale and retail trade and trading, and generation of electricity and heat.

In 2020, refinery throughput at LUKOIL’s refineries decreased by 15 percent compared to 2019, following the optimization of some refineries’ utilization rates amid lower demand for oil products and refining margins caused by the COVID-19 pandemic, as well as to scheduled maintenance at four refineries. Despite the challenging situation, we continued to build a delayed coking facility and isomerization unit at the Nizhny Novgorod refinery and moved forward with projects to boost energy efficiency at European refineries.

The output of fuel oil decreases, while the share of light products and low-sulfur marine fuel with enhanced environmental properties continues to grow. LUKOIL continues to develop new formulas for oils and lubricants. In 2020, petrochemical output was up by 8 percent compared to 2019, mainly due to increased utilization at the Stavrolen complex after repairs. In 2020, the Company continued designing polypropylene production complexes at the Nizhny Novgorod Refinery and the refinery in Bulgaria.

The Power Generation business sector is represented by a complete vertically integrated chain, from generation to transmission and distribution of heat and power to external consumers (commercial power generation) and for operational needs (supporting power generation). The aggregate installed capacity of our power generating facilitiesThe total electric capacity of the Group’s entities takes into account facilities owned by the Company but leased out to other legal entities. in 2020 was 6.2 GWThe data do not include the West Qurna-2 project., including a combined capacity of renewable power generating facilities of 395 MW. The construction of a 20 MW second solar power plant at the Volgograd Refinery and digital substations continued in 2020.

The Corporate and Other business segment consists of PJSC LUKOIL and other entities. One of the main functions of the Corporate center is to coordinate and manage organizational, investment, and financial processes at the Company’s subsidiaries. A full list of LUKOIL Group entities in accordance with IFRS can be found in Appendix 1.

Key financial and operational indicators
2018 2019 2020
Financial
Revenue, RUB billion 8,036 7,841 5,639
EBITDA, RUB billion 1,115 1,236 687
Total debt to EBITDA, % 48 45 96
Capital expenditures, RUB billion 452 450 495
Free cash flow, RUB billion 555 702 281
Research and development costs, RUB billion 6 6 5
Number of patents received 37 30 25
Labor productivity, RUB million / person 78 77 56
Operational
Production of oil and gas condensate (including the share in associates), million barrels of oil equivalent 644 646 590
Production of oil and gas condensate (including the share in associates), thousand tonnes 87,124 87,488 80,049
Gas production, million cubic meters 33,543 35,046 29,005
  • including APG
8,772 9,548 9,176
Output of petroleum products, thousand tonnes At own, affiliated, and third-party refineries (according to the Group’s share). 70,188 69,296 54,964
Lubricants production (full cycle), thousand tonnes 961 963 923
Output of marketable petrochemicals, thousand tonnes 1,246 1,137 1,229