Industrial Safety

LUKOIL is engaged in onshore and offshore activities that can potentially pose a risk to territories, residents, and the environment. We cannot prevent every incident, but we recognize our responsibility and apply the principle of due diligence to mitigate risks and prevent incidents and emergencies In Russia, an emergency is defined as a situation resulting from, among other things, an accidental oil or petroleum product spill that may cause or has caused human casualties, damage to human health or the environment, significant material losses, and disruption of living conditions of people. Emergencies can be split into categories. The minimum category refers to spills of less than 100 tonnes (or 714 boe, with 1 boe = 0.14 tonnes). , including those caused by oil and petroleum product spills. In accordance with the laws of the countries where we operate and on the basis of voluntary commitments undertaken by LUKOIL, the Company has established a comprehensive system of measures to prevent, respond and eliminate the consequences of emergencies.

Our goals

  • Improving HSE conditions, reducing the risk of accidents at hazardous production facilities, including by improving the reliability of process equipment, including the integrity of pipelines
  • Ensuring the preparedness of the management bodies of the LUKOIL Group entities, personnel and Emergency Response Teams (ERT) to liquidate potential accidents, fires, and emergencies
  • Improving procedures for the preparation and implementation of programs addressing the most pressing issues of industrial, fire, environmental safety, occupational health and safety, and prevention of emergencies

To achieve these goals, LUKOIL Group has committed to take all available steps and to effectively implement them in order to mitigate the risk of injuries and occupational diseases, accidents, and emergencies. This commitment is part of the LUKOIL Group HSE Policy. Reliable functioning of the Integrated HSE Management System is key to achieving the goals.

We strive to comply with global best practices and have consistently maintained low rates of accidents, work-related injuries, and occupational diseases for a long time Transportation safety issues are not significant for LUKOIL’s operations as they apply to a small volume of traffic (which includes the personnel transfers and transportation of fuel by motor vehicles for retailing) and are taken into account in the corporate occupational safety system. The bulk of products is supplied to foreign and domestic customers through the transportation systems of Transneft and Russian Railways, as well as by marine and river tankers of third party carriers. LUKOIL does not have its own rolling stock of rail cars and tanker fleet. .

Industrial Safety Program

Thanks to the measures taken as part of the ISP programs over the long term, there has been a steady improvement in pipeline system reliability and a reduction in injuries among full-time employees and contractor personnel. Most of the ISP activities scheduled for 2020 were completed, despite the challenges presented by the COVID-19 pandemic.

The year 2020, however, saw several indicators decline as a result of oil spills and an increase in the number of accidents (for detailed information, see the sections “Reliability of Pipeline Transportation in Russia” and “Occupational Health and Safety”). The meetings of the HSE Committee and the Board of Directors addressed the issues of occupational injuries and accidents and approved action plans to reduce the likelihood of any recurrence.

The President of PJSC LUKOIL met with the heads of the Group’s entities to discuss the need to enhance industrial and environmental safety measures. Following the meeting, the President gave instructions to carry out additional audits of production facilities. As part of implementing this order, we arranged for an inspection of equipment and preparedness of all our Russian organizations to prevent and respond to oil spills.

  • The technical condition of facilities and machinery was inspected and evaluated with due regard to the environmental impact. Emphasis was placed on reservoirs and tank farms located in the vicinity of water bodies.
  • All mothballed sites were inspected, and proposals were prepared to terminate or continue operating the equipment.
  • Technical means and the availability of trained personnel of the Emergency Response Teams were carefully reviewed. A new procedure for continuous monitoring of the ERT efficiency was introduced during the pandemic. Plans for emergency operation drills were adjusted: in regions with a complicated epidemiological situation, full-scale drills were replaced by office- and site-based training to minimize contact among participants.

Measures to prevent spills and emergencies

The Company has a system of measures to prevent spills and emergencies.

A mandatory assessment is made of the risks of potential spills using scenario simulation at the stage of designing production activities, as well as during the operation of production facilities.

All of our Russian entities operating hazardous production facilities have Emergency Spill Prevention and Response Plans (SPR Plans) in place. Each document contains step-by-step instructions for emergency prevention, detection, and response activities to ensure a rapid response and efficient cooperation between emergency response and recovery personnel.

LUKOIL Group entities have set up emergency response teams Establishing in-house emergency response teams and contracting professional response teams is regulated by the legislation of the Russian Federation. from among the Company’s employees to address accidents. The total number of responders exceeds 2 thousand people, some of whom are stationed directly at production facilities. In addition, we have signed agreements with third-party professional response teams. All response teams have been certified to perform emergency response and recovery operations.

The arrival of ERT on the scene of an incident is regulated by the SPR Plans. If an incident takes place in a remote area, the first to respond is the ERT closest to the site of the emergency. The containment period for the oil spill may not exceed four hours (in case of a spill on waters) and six hours (in case of a land spill) from the moment the spill is detected or the notification about the spill is received.

Employees from our corporate ERTs are also involved in liquidating emergencies that occur in LUKOIL’s regions of operation but are not associated with the Company’s activities. This way, LUKOIL assists regional administrations and local communities. For instance, our response workers helped with putting out forest fires in Western Siberia in 2019.

ERT headcount, people

Measures for contractors’ performance quality enhancement

PJSC LUKOIL uses a comprehensive approach which combines control and interaction methods with contractors to enhance the quality of work performed by service organizations of exploration and production.

  • In-house and outsourced supervisors, who act as authorized representatives of the customer, continuously monitor service companies’ compliance with design documentation, work plans, industrial safety requirements. Checklists were elaborated to cover the entire scope of issues, from record-keeping to the quality and safety of work performance. Carrying out hydraulic fracturing works is accompanied by enhanced control of supervisors and hydraulic fracturing specialists.
  • Joint discussions of field engineering reports with service companies and the chief designer (LUKOIL-Engineering) for design solutions implementation and cooperation on ways to improve the quality of service.
  • Regular control field audits are conducted to inspect work performance of engineering and technical personnel of drilling units and occupational and industrial safety departments.
  • West Siberian sites employ a method designed and tested to rate well construction and reconstruction service companies.
  • Constant interaction is maintained with service companies, for discussion of pressing issues and a joint search for improving the quality and safety of operations. Contractor representatives’ participation in Safety Days, where there is an opportunity to learn best practices and present their own experiences.

The existing contracts with all contracting entities provide for penalties for any violations of health, safety, and environmental requirements.

In 2020, more than a thousand inspectionsFull details of the total scope of the inspections are provided in the Annual Report for 2020, page 70. of contractors were conducted at the Russian entities of LUKOIL Group as part of corporate governance and production control. Employees of counterparties were held liable for any violations and penalties were imposed. Counterparties were required to initiate measures to eliminate and prevent violations in a timely manner.

In 2020, LUKOIL launched pilot projects to compile contractor ratings at LUKOIL-West Siberia and the Perm refinery to encourage contractors to improve their safety culture. The experience was deemed positive, and there are plans to replicate it at other entities.