Occupational health and safety
The Company’s key priorities are to ensure safe working conditions, to preserve life and health of its employees, as well as employees of contractor organizations working at LUKOIL facilities. The Policy includes the Company’s obligations to require all employees of LUKOIL Group entities and personnel of contracting organizations to comply with the established safety rules, to offer training and continuously improve the qualifications of employees, and to provide incentives.
In order to prevent injuries, we regularly identify risks (including critical risks) in accordance with the corporate standard and take measures to manage them, take occupational safety measures, and regularly inform our staff and contractors about the state of injuries.
In the event of accidents, all LUKOIL Group entities carry out investigations and the results are communicated to the heads of LUKOIL entities and structural subdivisions of PJSC LUKOIL, considered at the meetings of the HSE Committee of the PJSC LUKOIL Board of Directors and included in the annual report to the PJSC LUKOIL Management Committee and on the agenda of the Board of Directors’ meetings.
The COVID-19 pandemic accelerated the introduction of digital technologies based on remote operations.
- An automated system for generating and approving work permits is used, which made it possible to minimize interaction between employees when issuing hazardous work permits.
- Automated systems for briefing projects are being implemented and full implementation is planned for 2021.
- Digital video surveillance systems are installed at the oil refineries to detect and prevent the occurrence
of abnormal Abnormal situation is the occurrence of conditions and states in the operation of technical systems that differ from those envisaged by projects, standards and regulations and can lead to dangerous conditions.situations.
- Interactive training calendars for 2021 named "Safety Culture" have been developed.
- A solution was implemented in the corporate automated control system for fuel stations: i.e., pop-up windows now remind personnel of the safety rules before the start of hazardous operations (for example, receipt of fuel tankers).
Liability and compensation
In all the countries where LUKOIL Group entities operate, the employer’s responsibility for preserving life and health of its employees at the workplace is enshrined
In most countries, employers are required to take out individual or group life and health insurance policies for their employees. The Group entities fully comply with the legislative requirements and apply a uniform approach in accordance with the Insurance Coverage Program for LUKOIL Group entities, including entering on a voluntary basis into certain types of contracts that are not mandatory in the country of operation (for example, third-party liability insurance contracts, insurance contracts in Iraq
Ensuring safe working conditions is a priority task for all LUKOIL Group entities. Every year measures are taken to prevent workplace injuries among full-time employees and contractor personnel. According to our internal analysis, LUKOIL’s injury rates are lower than those of companies with comparable production volumes and headcount.
In 2020, we note an increase in the number of accidents at LUKOIL entities and the number of injured (mostly in foreign entities). Due to continuous efforts to improve the safety culture, the rate of fatalities as a result of work-related injury remains at the same
We regret to say that we were unable to avoid fatalities in 2020: two of our employees (at LUKOIL-Perm and the Nizhny Novgorod Oil Refinery) and four employees of contracting organizations died. The cause of both fatal injuries involving our employees at LUKOIL’s entities was a fall from height. In contracting organizations, the accidents occurred as a result of one employee falling from height and the others were a result of extreme temperatures. All accidents involving employees of LUKOIL Group entities were investigated.
In order to prevent cases like those which occurred in 2020, the following measures were taken based on the results of the investigations.
- LUKOIL-PERM. The circumstances and causes of accidents were communicated to employees, and unscheduled briefing and extraordinary checks of knowledge of labor safety requirements for the operation of wells equipped with sucker-rod pumps were carried out.
- Nizhny Novgorod Oil Refinery. The assignment of personnel between technological facilities of the entity according to process characteristics was organized. Additional control over the work of operators using video surveillance systems is now exercised; new various means of communication are used and checklists on the actual employment of technological personnel during the shift are maintained, while unauthorized access to the premises of ventilation chambers is excluded.
At the end of the year, two LUKOIL entities with fatal injuries were found to have failed to meet the KPI “Ensuring the required level of HSE”. As a result, the annual remuneration of the CEOs of those entities was reduced.
In order to strengthen occupational safety measures, the circumstances and causes of injuries are communicated to the LUKOIL Group entities on a quarterly basis via information letters, which provide an overview of injuries and a description of measures to be taken (including communication with contractors). When identifying risks and hazards in the area of industrial safety and occupational health and safety, the Group entities should apply the results of these analyses in their work.
For example, based on the analysis of the frequency of injuries to employees (including contractor personnel), in 2020 we increased our assessment of the probability of exposure to the risk of falling from height during high-risk work. To mitigate the risk, it is planned to equip the Corporate Training Center with a training complex where personnel working at heights and emergency rescue teams will be trained. Also, stationary safety systems for safe passage at height are being installed at production facilities. A project to equip oil tank farms with bottom loading systems is being implemented in Oil Product Supply entities.
In addition, it is planned to check the knowledge of those responsible for organization and safe performance of work at height in contractor organizations before allowing them access to LUKOIL facilities. If the assessment is unsatisfactory, the contractor’s personnel will be sent for training to the centers equipped with simulator complexes, and will not be allowed to work at height until positive results on the knowledge check are obtained. To ensure compliance with the requirements of safe work at height, disciplinary measures are applied in the event violations are detected or personal protective equipment is not used.
|Lost time accident frequency rate (LTAFR)||0.20||0.19||0.28|
|Lost time injury frequency rate (LTIFR)||0.12||0.13||0.15|
|Rate of fatalities as a result of work-related injury||0.01||0.01||0.01|
|Rate of high-consequence work-related injuries (net of fatalities)||0.03||0.05||0.04|
|Rate of registered occupational injuries or damage to health||0.15||0.18||0.19|
|Total number of occupational accidents||21||19||28|
|• high-consequence work-related injuries||5||8||7|
|Number of victims of accidents||23||25||28|
If during the reporting period an employee suffered more than one injury, each case is counted as a separate injury.
Measures to prevent injuries in contractor organizations
Injury rates in contractor organizations have improved (of particular note is that the number of injured has decreased significantly), in part due to increased cooperation in this area. Pre-tender assessments of contractors for compliance with the HSE requirements are performed on a regular basis, and compliance checks are performed in the course of work. In addition, representatives of contractor organizations are invited to attend Safety Days and quarterly meetings held by the Group entities to analyze injuries and discuss measures to prevent accidents in the future.
|• high-consequence work-related injuries||1||6||3|
|• Number of victims of accidents||3||1||1|
|Number of victims of accidents||9||16||11|
Health in the workplace
In 2020, significant efforts of the Company’s medical services were focused on protecting employees from COVID-19 (for details, see the section “Our Employees”).
The corporate health control system for employees is based on managing the risks of occupational and work-related diseases. The risk management system identifies typical hazards, such as increased noise, vibration, chemical exposure, labor intensity and others. If the risks identified at the LUKOIL Group entity level are assessed as significant, measures are developed to control and reduce their impact.
The Company has appointed a Health Protection Officer to hold regular consultations with employees on health-related issues; trade union organizations are also involved in this work.
Occupational illnesses are extremely rare among the LUKOIL Group employees. LUKOIL-Komi is the only entity where difficult conditions remain (i.e., in the shaft oil production).
LUKOIL-Komi implements projects to improve working conditions in oil mines, such as introduction of new ventilation systems; purchase of equipment that excludes contact with vibration sources; introduction of automation equipment; and the use of specialized personal protective equipment. Priority is given to the early identification of workers predisposed to occupational diseases, and their treatment, and transfer to work that excludes contact with sources of harmful production factors.
In 2020, a priority project was launched to reconstruct the oil mines at the Yaregskoye field and the related infrastructure. Among other things, this project is intended to improve safety and working conditions in accordance with the Rules for industrial safety in the mine development of oil fields, which were developed at the initiative of LUKOIL.
|Occupational disease rate (ODR) per 1,000 workers||0.19||0.13||0.071|
|per 1,000,000 man-hours||0.11||0.08||0.04|
The safety of production operations of nature resource producing companies in the Arctic Zone became particularly important in 2020 due to a number of major accidents and accelerated climate changes in the region. LUKOIL pays special attention to environmental and industrial safety in the Arctic, applying cutting-edge technical solutions and methods of engineering protection of facilities and territories.
Observations of the Arctic climate
At the same time,
There are 30 fields in the Arctic Zone of the Russian Federation (onshore) developed by LUKOIL Group organizations (in the Yamal-Nenets Autonomous Area, the Nenets Autonomous Area and the Komi
The Company has built an effective management system that enables timely control of the condition of facilities located in the permafrost area. The climatic specifics of the northern territories are taken into account at the design, construction and operation stages of all production facilities located in the Arctic Zone; all facilities are insured against the risks of property loss or damage.
Design and construction stages
At the design stage of production facilities possible thawing of permafrost is taken into account, facilities are designed with a large safety margin based on engineering calculations and geological surveys. Engineering solutions are used, which make it possible to prevent permafrost thawing, maintain equipment integrity and reduce product losses.
- Pipelines, buildings, structures and tank farms are built on pile foundations.
- Aerial crossings are constructed when water bodies are crossed.
- Boreholes are drilled using the slant-hole directional drilling method (“pipe-in-pipe”), which prevents intense warming of soils.
Construction on piles. During construction of facilities, piles made of cold-resistant steel are submerged in boreholes. Cavities within the seasonal freezing and thawing layer are filled with frost-resistant concrete. The lower ends of the piles are at least 0.5 m lower than the ice foot. The piles are marked with geodetic markers that indicate pile deflection due to settling or movement of the ground. For timely identification of equipment sludge, the pile substructure and foundation markers are leveled (once every two years).
For example, five oil storage tanks with a volume of 10,000 cubic meters each are located at the site of acceptance and delivery point of Pyakyakhinskoye field (the Yamal-Nenets Autonomous District). The tanks are installed on a pile foundation. The base of the tank farm is equipped with thermometer wells up to 25 m deep. Soil temperature is measured twice a year, and the measurement results are recorded in logs and reviewed.
Thermal stabilization systems. Temperature stabilization systems, plastic-frozen soil stabilizers, thermal insulation screens at the base of underground tanks and external thermal insulation of facilities are used to maintain the temperature regime of permafrost soils and eliminate unforeseen heat releases.
This approach is also used at the Pyakyakhinskoye field. Temperature stabilization systems “GET” and “VET”, which are hermetically sealed structures made of pipes filled with refrigerant, are installed in the base of oil storage tanks. A similar system was used in the construction of the tank farm of the Yuzhnoye Khylchuyu Central Gathering Facility (the Nenets Autonomous Area): temperature of foundation soils is stabilized using the “GET” temperature stabilization systems and plastic-frozen soil stabilizers.
At the operation phase, systematic maintenance and control of the buildings and equipment condition are carried out, including:
- control of temperatures of critical units, characteristics and vibration, check of alignment of the main technological equipment;
- monitoring of the foundations of buildings and structures;
- control of the depth of seasonal thawing and the groundwater level.
Equipment is monitored at least once a year by qualified specialists engaged on a contractual basis and by LUKOIL employees (surveying inspections, geotechnical monitoring). In the event any violations of the thermal regime of soils exceeding the permissible values are identified, additional measures are taken to restore the original temperature.
The technical condition of the main gas pipeline of the gas transportation system of the Bolshekhetskaya Depression is monitored once a year by helicopter inspection using a laser gas leakage locator, as well as on a monthly basis by visual inspection driving along line pipes.
“LUKOIL-Komi” is one of the largest subsoil users in the Timan-Pechora oil and gas province in the north-western Russia and operates in the Komi Republic and the Nenets Autonomous Area. The entity includes territorial production enterprises (TPE) LUKOIL-Usinskneftegaz, LUKOIL-Ukhtaneftegaz, LUKOIL-Severneftegaz, the Yareganeft oil and mines division, as well as the Usinsk gas processing plant. High-viscosity oil is produced in the region, including by means of shafts. Production volume in 2020 was 14 million tonnes, 12 percent less than in 2019 (16 million tonnes). The Group also includes the Ukhta oil refinery located in the region.
When planning and performing the production activities, we take into account the complexity of issues that need to be resolved in the Komi Republic. LUKOIL is committed to reducing environmental risks for LUKOIL-Komi producing companies and the population, in 2020 the implementation of the program Comprehensive Organizational and Technical Measures to Reduce Social and Environmental Risks in the Komi Republic (2020–2022) started. It is a part of the LUKOIL Group’s investment program and includes measures, that are aimed at significantly reducing the negative environmental impact of LUKOIL-Komi’s operations in the following key areas:
- liquidation of the sediment ponds of oil mines 1, 2 and 3
- construction of water pipelines for the injection of wastewater from the combined-cycle plants (Usinskoye field);
- implementation of the roadmap to restore water bodies from historically accumulated pollution (the Maly Voyvozh stream);
- disposal of accumulated oil-saturated sandstone from the mine workings of oil mines (with the involvement of a qualified contractor), as well as testing of mobile technology for washing this waste at the oil production site;
- rehabilitation of contaminated land.
Measures to improve reliability and safety of the pipeline system and improve the environmental situation in the Komi Republic are determined during the annual planning process and are also funded as part of the ISP and the ESP. In 2020, RUB 8.9 billion was allocated to implementation of these.
Treatment facilities at Yarega
In 2020, a hallmark event of long-term importance for the region was the completion and commissioning of new treatment facilities at all oil mines of the Yareganeft oil mine production enterprise. The old facilities did not provide the necessary treatment level of wastewater discharged into surface water bodies, which led to chronic pollution of the Maly Voyvozh stream. The new facilities were commissioned at three sites: in the villages of Yarega (near oil mine No. 1), Pervomaysky (near oil mine No. 2) and Nizhny Domanik (near oil mine No. 3).
After the commissioning of the new facilities, the volume of insufficiently treated water discharges was reduced to a minimum already in 2020 (from over 400 thousand to 43 thousand cubic meters), and the mass of pollutants contained in the wastewater decreased by 94 percent (as compared to 2019). At the same time, fresh water intake from local surface water bodies was reduced (by three times) due to the fact that wastewater from the oil mines after deep treatment is sent to a closed cycle for the production of steam required for high-viscosity oil production. The operation of the treatment facilities is under constant control of the control center. The project cost amounted to RUB 1.9 billion.
We took a comprehensive approach to the task of improving the environmental situation in the area of the oil mines in Yarega. In addition to the commissioning of new treatment facilities, two other projects were undertaken to eliminate liquid waste and pollution accumulated in the pre-privatization period.
- Treatment (disposal) of wastewater from the combined cycle plants. The work will be carried out in stages and is planned to be completed in 2022.
- Elimination of old settling tanks of the treatment facilities of oil mines. It is planned to pump out the oil-containing liquid, as well as to remove and dispose of bottom sediments. The pits will then be backfilled with the mined-out rock of the oil mines and reclaimed. The completion of the project is expected in 2023.
One of the environmental problems in Yarega is pollution of the Maly Voyvozh stream (part of the ecosystem of the Yarega and Ukhta rivers) which accumulated both in the pre-privatization period and during LUKOIL-Komi’s operations. LUKOIL set as its goal to carry out a complete cleaning of the stream and return the water body to its original state if possible. In 2019, a stationary hydraulic seal was commissioned to prevent the spread of pollution downstream.
In 2020, LUKOIL-Komi and the Biological Institute of Tomsk State University entered into a contract to clean the water and bottom sediments of the stream of oil and oil products. Our partner has its own technology for bottom sediments treatment, which has already been tested on Shchuchiy Lake (the Komi Republic). The project underwent a public hearing procedure and then, during the first stage, the steam was examined and samples of water, bottom sediment and soil were taken. In 2021, it is planned to implement the second stage — the treatment of water, bottom sediments and the shoreline. The completion of the project is expected in 2023.
In 2020, 40 hectares of contaminated land were remediated, including in the Ukhta District (near the Maly Voyvozh stream) and the Izhemsky District (in a forest area).
The implementation of all those projects will significantly improve the environmental safety of oil production at the Yaregskoye field.
Prevention of oil spills
LUKOIL continues to act diligently to improve reliable operation of our pipelines. Key areas to improve reliability and safety of the LUKOIL-Komi pipeline system include pipeline corrosion protection, timely current repair and overhaul, pipeline reconstruction, continuous corrosion monitoring, in-line diagnostics and cleaning, as well as expert examination of industrial safety and technical diagnostics of pipelines.
The most stable result is achieved by replacing pipeline sections with corrosion-resistant pipelines. The following results were obtained thanks to the measures taken by LUKOIL: the length of corrosion-resistant pipelines has increased by 18 percent since 2018 while during the same period, the specific failure rate of pipelines has decreased by 30 percent. A promising area is the use of corrosion-resistant pipelines (about 200 km of non-metallic pipelines are in operation as part of a pilot project).
- In accordance with the roadmap, the reconstruction of the interfield oil pipeline of the central gathering facility Lekkerka, booster pump station V. Masterel, was performed on time. In 2021, the remediation of contaminated lands at the pipeline location will be completed.
- Pilot testing of polymer pipes made of polyethylene with higher temperature resistance produced by the Stavrolen complex will begin in 2021. Facilities at Yareganeft’s fields have been selected for testing.
We made an important decision to use UAVs to assess the condition of the pipelines and adjacent infrastructure in addition to the traditional types of monitoring (walk-round checks and snowmobile patrols in winter). UAV flights help to identify even minor oil transportation equipment malfunctions more quickly and with greater area coverage. Flights have been carried out since July 2020 according to an approved schedules, and, based on the results, a database is being formed for further monitoring purposes.
|Environmental performance of LLC LUKOIL-Komi||2019||2020|
|Pollutant emissions, thousand tonnes||72||64||57|
|Intake of water from surface sources, thousand cubic meters||380||340||122|
|Discharge of insufficiently treated water, thousand cubic meters||452||416||43|
|Discharge of polluted water, million cubic meters||0||0||0|
|Total weight of pollutants contained in wastewater discharged to surface water bodies, thousand tonnes,||571||701||42|
|• including hazard classes 1 and 2, tonnes||0.33||0.5||0.03|
|Waste generated, thousand tonnes||42.2||206.9||421.1|
|Waste disposed of, thousand tonnes||42.7||209.6||421.4|
|Volume of oil spilled in accidents, tonnes||19.6||13.8||33.2|
|Remediated lands, ha||41.2||49.6||40.0|
Treatment facilities at the Ukhta oil refinery
One of the tasks to be solved is related to the condition of treatment facilities at the Ukhta oil refinery. The facility was designed and built in the late 1960s; it receives both wastewater from the plant’s production processes and municipal wastewater, which accounts for more than 80% of the total wastewater volumes to be treated. After mechanical and biological treatment and disinfection, wastewater is discharged into the Ukhta River.
As part of the investment project to upgrade the oil refinery treatment facilities, this important facility is being re-equipped to significantly improve the quality of wastewater treatment. Total investments will exceed RUB 1 billion.
In the first stage, new equipment of settling basins, aeration systems and biological treatment was installed, which led to a significant reduction in the pollutant concentrations. The second stage was completed in 2020 with the re-equipping of the mechanical cleaning system. As a result, wastewater treatment quality significantly improved in terms of phosphorus compounds, nitrates, and organic substances.
By the end of 2023, it is planned to complete the last stage (i.e., to complete mechanical and biological treatment facilities and to equip the facility with an automated system of industrial environmental control) and to bring the quality of wastewater to regulatory requirements.
We also take actions to improve the social situation in the republic. On an annual basis, LUKOIL supports projects of local administrations, municipal and public organizations. In 2020, the funding for social projects in the Komi Republic amounted to about RUB 229
Applications from local organizations are considered as part of external social programs. When an application is received, the request is evaluated based on the following criteria: the cost of implementing the project; territory of implementation; audience coverage; reputation of the organization. LUKOIL-Komi assesses the effectiveness of the projects by monitoring social networks and mass media for positive feedback.
Interaction with residents and public organizations
At key stages of projects, LUKOIL holds consultations with residents whose interests may be impacted by corporate plans. Various communication channels are used for this purpose, including public hearings on projects, personal meetings between LUKOIL Group management and specialists and residents, and a permanent hotline to interact with the public. The opinion of local residents is taken into account when deciding on project implementation parameters.
In 2020, 14 applications on environmental issues were received via the hotline (26 applications in 2019). Based on the review of the applications, all the applicants were provided with clarifications on LUKOIL-Komi’s production activity plans.
We regularly hold meetings with local residents and heads of settlements, cooperate with many public organizations, such as Komi Voityr (Komi People), Izvatas (Izhemtsy), Rus Pechorskaya and others.
- Interaction with residents of the Ust-Usa village and the Novikbozh village (Usinsky District)
Both settlements are located at a distance of about 15 km from the Usinskoye field, so the Company is constantly in contact with the local residents. In 2019, the Company’s plans to construct a production facility (prospecting well) were discussed at the public control meetings. Based on the discussion results, LUKOIL decided to move the construction site farther away from the villages. In 2020, as a continuation of the dialogue, a working group was created that included representatives of LUKOIL-Komi management, administration of the Usinsk urban district and the initiative group of the residents. Repeated hearings on the project were organized and the dialogue continues.
Another topic for discussion was the performance of seismic exploration works in the floodplain of the Pechora River in 2018, which caused concern among residents in connection with forest devastation. After completion of the seismic work, LUKOIL-Komi organized flights over the territories where the work was performed, during which time photo and video recordings of the disturbed land condition were made. In October 2019 and in August 2020, repeated flights around the territories were made together with representatives of supervisory authorities and representatives of the villages. As a result, formal notes were drawn up on the absence of comments on the quality of cleaning of wood residues in the cuttings. Seedlings of spruces were then planted.
- Interaction with the residents of Shellyayur and Diyur villages (Izhemsky District)
LUKOIL’s plans to build a solid and liquid oil sludge landfill that would enable LUKOIL-Komi to neutralize oil sludge, without risks to the environment initially led to protests by the environmental community and residents of two villages of the Izhemsky district. Following the public hearings, it was decided to move the construction of the facility to the territory of the Makaryelskoye field of the TPE LUKOIL-Ukhtaneftegaz. The territory where the landfill was supposed to be built is being reclaimed.