No. 4, 2011


August 23, 2011:

The Ministry of Petroleum and Energy of Norway approved the pre-qualification of LUKOIL as operator for the Norwegian continental shelf. This resolution was based on reports of the Norwegian Petroleum Directorate and the Petroleum Safety Authority. LUKOIL will take concrete decisions on participation in the projects of exploration and production of hydrocarbons on the Norwegian shelf depending on the information obtained from the future tender documentation.

August 31, 2011:

LUKOIL published its consolidated financial reporting for the second quarter and first half-year of 2011, prepared in accordance with the US Generally Accepted Accounting Procedures (US GAAP). The Company's net profit over the first six months of 2011 amounted to $6,768 million and its free cash flow to $4,714 million.

August 31, 2011:

LUKOIL-Western Siberia launched drilling of prospecting and appraisal well No. 2011 in the Pyakyakhinskoye field (Yamal-Nenets Autonomous Area), with a projected depth of 4800 m. The design and estimate documentation was developed by the service companies Baker Hughes and Schlumberger.

September 1, 2011:

The fourth LUKOIL report on sustainable development performance in 2009-2010 was published. The document contains exhaustive information about the main spheres and indicators of the Company's production, social and environmental activities in the regions where it operates: the Northwestern, Central, Urals, Volga, Southern and North Caucasus Federal districts.

September 6, 2011:

With LUKOIL support, an exhibition "Poiret - King of Fashion" opened in the museums of the Moscow Kremlin. This is the first full-scale showing in Russia of the legacy of the well-known French fashion designer Paul Poiret, founder of 20th century fashion.

September 9, 2011:

LUKOIL President Vagit Alekperov and Igor Fyodorov, Governor of the Nenets Autonomous Area (NAA) signed a protocol on the cooperation agreement between the Company and NAA at the Company's headquarters in Moscow. The document stipulates, among other things, that LUKOIL will undertake geological exploration in the subsoil license areas under the terms and conditions of license agreements and provide petroleum products to various customers of the district, including housing and public utilities, agricultural producers and public sector entities at market prices.

September 12, 2011:

In the Western Desert, Egypt, Agiba Petroleum Co., a JV of LUKOIL, ENI, IFC and EGPC, drilled a new exploration well at the Zarif structure of the Meleiha oil field, which is one of the most cost-effective production projects of the Company. As a result, an appraisal well revealed the presence of commercial hydrocarbons in the Gawaher structure. Drilling costs totaled $3 million, the depth of drilling made 10 thousand ft3.

September 16, 2011:

LUKOIL President Vagit Alekperov and Anatoly Brovko, Head of the Volgograd Region Administration, signed a cooperation agreement. The agreement aimed at implementation of large-scale investment projects was signed within the framework of the international investment forum held in Sochi. The Volgograd Refinery will reconstruct coke manufacturing, put into operation phase two of diesel fuel hydrotreatment unit, complete phase one of the vacuum gasoil deep conversion unit construction.

September 19, 2011:

In Sochi, Vagit Alekperov, President of LUKOIL, and Sergey Katyrin, President of the Chamber of Commerce and Industry of the Russian Federation (CCI), signed an agreement for cooperation between the Company and CCI. The agreement was signed in Sochi today within the framework of the international investment forum. In accordance with the agreement LUKOIL, among other things, will render advisory and expert assistance to the Chamber, delegate its representatives to attend public events organized by CCI and raise awareness in corporate media about the Chamber's activities. CCI, in its turn, will provide information support to LUKOIL in establishing business ties with foreign partners and mastering new forms of commercial, economic, scientific and technical cooperation.

September 19, 2011:

LITASCO, a LUKOIL's 100% trading subsidiary, is moving forward with terminal construction in Barcelona. This new capacity of 360 km3 will enhance LUKOIL Group's Trading and Supply infrastructure in the Mediterranean region, and will contribute to increasing its competitive position in key consuming markets in and outside of Europe to the benefit of the parent company LUKOIL.

September 21, 2011:

LUKOIL President Vagit Alekperov heads the list of the Company's top executives included in the Top 1,000 Russian Managers by the National Association of Managers. The list includes: Sergey Kukura, First Vice President of LUKOIL; Andrey Kuzyaev, Vice President of LUKOIL, President of LUKOIL Overseas Holding Ltd.; Valery Subbotin, Vice President, Head of the Main Division of Sales and Supplies of LUKOIL; Anatoly Moskalenko, Head of the Main Division of Human Resources of LUKOIL; Sergey Malyukov, Head of the Main Division of Control, Internal Audit and Risk Management of LUKOIL; Alexander Vasilenko, Head of the Public Relations Department of LUKOIL; Maxim Tararashkin, Head of the Division for Interaction with Central and Regional Authorities of LUKOIL.

September 23, 2011:

LUKOIL Mid-East Ltd. (the LUKOIL operating structure) signed a contract with the oilfield services company Schlumberger for the drilling and testing of three wells in West Qurna-2 field in Iraq

to confirm its reserves. According to the contract, Schlumberger is to drill and test two estimates and one exploratory well.

September 29, 2011:

LUKOIL specialists participated in the international complex maneuvers Caspian Sea-2011.The maneuvers were held in the vicinity of the fixed offshore ice-resistant platform at Yury Korchagin field and at the self-elevating semisubmersible drilling rig Astra involved in prospect drilling at Sarmatskaya area. The purpose of the exercise was to train the response of both the personnel and special forces to emergencies like a collision of a tanker with another vessel close to the platform or a regional-significance oil spill during prospect drilling. Taking part in the exercise were rescue teams from Kazakhstan and Azerbaijan.

September 29, 2011:

In Saint Petersburg, LUKOIL held an informational meeting with shareholders. The meeting that had become a traditional event for the Company was also attended by representatives of Registrator NIKoil Company, the registrar for the Company's securities. LUKOIL representatives informed the shareholders on Company financial results in the first six months of 2011. The meeting also focused on the issues related to shareholders' rights and responsibilities, specifics of inherited dividends acceptance, taxation of dividends and the dividend policy of LUKOIL that provides for dividend payments to be no less than 15% of net profit determined on the basis of the Company's consolidated financial statements prepared in accordance with US GAAP.

October 7, 2011:

An agreement has been signed today to raise loan in the amount of up to $500 million for a five-year term for financing the investment program and increasing the working capital of Turgai Petroleum (Kyzylorda Region, Republic of Kazakhstan). The shareholders of Turgai Petroleum on a parity basis are LUKOIL Overseas and PetroKazakhstan (a joint venture of CNPC (66.6%) and KazMunayGaz (33.3%).

October 8, 2011:

During his trip to Krasnodar, President of Russia Dmitry Medvedev visited Krasnodarskaya Combined Heat and Power Plant, a major production facility of LUKOIL-Kubanenergo. Accompanied by LUKOIL President Vagit Alekperov and Governor of Krasnodar Territory Alexander Tkachev, the President of Russia inspected a new 410 MW combined-cycle gas turbine. The CCGT-410 construction has been completed. The turbine is being prepared for start-up. The new unit will increase the installed electric capacity of Krasnodarskaya CHPP by 50% to 1,090 MW. The efficiency factor of CCGT-410 is 57%, which is 1.5-times higher compared to the existing steam turbine units installed at the vast majority of Russian thermal power plants and combined heat power plants. The new turbine consumes 350 million m3 per year less natural gas than conventional steam turbine units with a similar capacity.

October 11, 2011:

In Moscow, Russian President Dmitry Medvedev awarded LUKOIL First Vice President Vladimir Nekrasov the "Order of Merit" of the 4th degree.

October 13, 2011:

In Nizhny Novgorod, LUKOIL President Vagit Alekperov and President/CEO of GAZ Group Bo I. Andersson, signed a cooperation agreement. Under the document, GAZ Group will purchase fuels, lubricants and petrochemicals manufactured by the LUKOIL Group entities using the price formulas based on market markers. LUKOIL's products will be used by GAZ Group in the first automobile priming in an assembly line and will be recommended for use with GAZ Group's equipment in the automobile after-sales service.

October 20, 2011:

The Government of the Socialist Republic of Vietnam has approved the deal on acquisition by LUKOIL Overseas of a 50% interest in the PSA for the Hanoi Trough-02 offshore block. The interest in the PSA was acquired from Quad Energy in April this year. The current Quad Energy's share in the PSA is 50%. LUKOIL Overseas is the project operator.

October 20, 2011:

The Government of Romania has ratified concession agreements for exploration and development of Est Rapsodia and Trident, two blocks in the Romanian sector of the Black Sea. The project is being implemented by a consortium of investors, which includes LUKOIL Overseas (80%, operator) and Vanco International (20%). In order to clarify the geological structure of the blocks, LUKOIL Overseas plans 3D seismic acquisition in 2012.

October 23, 2011:

LUKOIL Overseas Holding Ltd. has begun drilling the first deepwater exploration well at the prospective Buffalo structure of the offshore CI-205 block in the Gulf of Guinea. The depth of the well will be about 5,300 meters at a water depth of more than 2,400 meters. The well is being drilled by a sixth-generation Maersk Deliverer semi-submersible drilling rig.

October 24, 2011:

In Moscow, LUKOIL President Vagit Alekperov met State Councillor in charge of the Department of Health and Economy, Republic and State of Geneva Pierre-Francois Unger to discuss the activities of the Company in Geneva.

October 25, 2011:

An official ceremony of laying down a time capsule symbolizing the launch of construction phase one of a gas processing plant, part of a gas chemical facility (GCF), took place in Budyonnovsk, Stavropol Territory. The ceremony was attended by Deputy Prime Minister of the Russian Federation Igor Sechin, LUKOIL President Vagit Alekperov and Valery Gaevsky, Governor of Stavropol Territory. The GCF will be built on the industrial site of Stavrolen plant, a LUKOIL's subsidiary. The primary feedstock for the GCF will be associated petroleum gas from the fields developed by LUKOIL in the Russian sector of the Caspian Sea.

October 27, 2011:

In Moscow, the LUKOIL Board of Directors held a meeting to discuss gas production projects and the Company's policy to increase shareholder value. The draft 2012-2021 Development Program for the Exploration & Production Business Segment provides for an increased share of gas production in the total volume of hydrocarbon production from 20% in 2011 to more than 35% in 2021.

October 30, 2011:

In Kazan, President of the Republic of Tatarstan Rustam Minnihanov met LUKOIL President Vagit Alekperov. The parties discussed the prospects of cooperation between the Republic and the Company.

Among other things, the BOD meeting decided that work should be continued to raise natural gas production, to achieve a higher utilization level of associated petroleum gas in view of the macroeconomic conditions and also that development outlooks should be assessed for projects of shale gas production in Russia in view of the risks associated with shale gas production in Eastern Europe.

November 3, 2011:

LUKOIL ranked 5th among the oil and gas companies of Europe, Middle East and Africa, and placed 10th among the world's majors in the 2011 list of ‘Top 250 Energy Companies' compiled by the American energy agency Platts. All companies were ranked by four main criteria: asset value, revenues, profits and return on invested capital. The valuation was performed based on Standard & Poor's database which is, like Platts, a unit of The McGraw-Hill Companies.

November 7, 2011:

The LUKOIL's Varandey fixed offshore ice resistant oil terminal (FOIROT) has been registered in the Guinness Book of Records as the world's most northerly continuously operating oil terminal, namely, 69 degrees 03 minutes 11 seconds of the northern latitude. The FOIROT is assembled at a 17-meter depth in the Barents Sea located 22 km off the coast of the Nenets Autonomous Area. It is more than 50 meters tall and has a total weight of over 11,000 tons, which includes a substructure with living quarters, a mooring cargo handling system with a jib and a helicopter platform. The FOIROT capacity totals 12 million tons of oil per year.

November 9, 2011:

On the Krasnoleninskoye field, LUKOIL-Western Siberia commissioned a 48 MW gas turbine power plant which works on associated petroleum gas. Commissioning of the gas turbine power plant will bring the level of utilization of associated gas field on field up to 95% and will provide electricity to the field facilities.

All articles
Oil of Russia, No. 4, 2011
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