Latest issue

No. 4, 2012


LUKOILS GREEN STRATEGY


Oil of Russia magazine talks to Igor Zaikin, Head of LUKOIL Department for Industrial Safety, Environment, Research and Technology

The environmental component is a priority in LUKOIL's production operations. In its work, the Company is guided by the highest environmental and industrial safety standards.

Q: In 2011, a Program was drawn up for strategic development of the LUKOIL Group in 2012-2022. What are the main benchmarks for the Program?

A: Over the next 10 years, LUKOIL plans to expand the priority geological exploration regions, increase hydrocarbon production, continue refining assets upgrading, and strengthen its presence on the European market for oil and petroleum products. At the same time, the two main objectives set for the Group as a whole are to secure sustainable shareholder value growth and environmental, industrial, social and personal safety.

The Company's strategic environmental objectives for the 2012-2021 period include:

  • bringing APG recovery ratio in the Russian Federation up to 95% by 2014;
  • complying with national environmental legislation;
  • achieving the level of the global oil & gas and energy companies in terms of their environmental impact indicators.

Q: On which key environmental safety measures has the Company focused in recent years?

A: We have accumulated considerable experience in ensuring environmental safety. The LUKOIL Group's Environmental Safety Program for 2009-2013, which we are currently implementing, is already the fourth medium-term program of this kind. The result attained is clearly demonstrated by the Refining business sector where, compared to 1993, the specific indicator of pollutant discharges has been cut to a fifth, while that of water consumption - to nearly a quarter. Our current Environmental Safety Program includes about 600 measures costing a total of 92.6 billion rubles. They are all geared to achieving the following goals set for the Group as whole:

  • bringing APG recovery ratio up to 95% by 2014;
  • implementing projects relating to the Kyoto Protocol mechanisms;
  • increasing production of environmentally clean fuel meeting the Euro-5 standard;
  • ensuring that the environmental impact of the LUKOIL Group's operations, including those outside Russia, meets the set requirements of national and international law;
  • providing for further disposal of the accumulated and new waste, and reclamation of disrupted and polluted land.

Results have already been achieved: from July 1, 2012, for instance, well ahead of the requirements of the national technical regulations, all LUKOIL refineries in Russia transferred to producing 92 and 95 octane gasoline complying only with grade 5 (Euro-5). No more grade 4 (Euro-4) gasoline is being produced from that date. The environmental effect of this transfer is obvious, especially if one recalls that over 80% of harmful emissions into the atmosphere in Russian cities come from road vehicles.

Fulfillment of measures to raise the APG recovery ratio has already permitted us to increase the gas utilization figure to 88.5%; by 2014, we plan to reach 95%.

Pursuant to article 6 of the Kyoto Protocol to the UN Framework Convention on Climate Change, which was ratified by Russia back in 2004, we have drawn up a portfolio of projects for reducing greenhouse gas emissions. Between 2008 and 2012, the reductions under these projects will amount to about 33 million tons of 2-equivalent.

Q: Please outline the most significant regional environmental projects implemented recently.

A: Each region in which the Company operates is important to us and we apply unified corporate environmental protection standards in all these regions. They are often stricter than the requirements set by the legislation. This is clear from our approach to ensuring environmental safety during offshore operations.

Conscious acceptance of responsibility toward society for rational use of natural resources and maintenance of a favorable environmental situation constitute one of the main conditions during project implementation. In accordance with the Russian legislation and for purposes of compensating for unavoidable harm to water bioresources during construction of oil production facilities (building of roads and bridges, intake of water from the surface of water bodies), we are constantly performing compensatory measures.

This work is carried out in a targeted manner. In Astrakhan, for instance, several years ago, the Company concluded a direct agreement with the BIOS research and production center to produce juvenile sturgeon. Each juvenile is chipped and, after release into the natural habitat, the fish specialists are able to follow the subsequent fate of each of them.

In the Republic of Komi, for the purpose of fulfilling the set tasks, an agreement was concluded with JSC BioResource Fish Company for breeding young fish and subsequently releasing them into the Pechora River basin. Release of artificially bred juveniles is of enormous significance for restoring the ecosystems of rivers. Artificial seeding will help maintain the required biological balance in nature and ensure that the population can continue its traditional fishery in the future.

Q: Please give us some more detail about the zero discharge principle applied by LUKOIL in offshore field development.

A: Application of the zero discharge principle is one of the obligations voluntarily assumed by LUKOIL in its HSE Policy and invariably applied in offshore field development.

The Company is fully aware of the fragility and uniqueness of the natural ecosystems in the territory on which it operates, and it endeavors to use experience and knowledge accumulated, the latest technologies and its own know-how for maintaining the balance of these ecosystems.

The Company's first offshore facility, started up in 2002, was the offshore ice-resistant fixed platform at the Kravtsovskoye field in the Baltic Sea. It was during operation of this platform that the zero discharge principle was first applied, prohibiting all discharges from the platform into the sea and providing for transportation of waste to the shore for subsequent disposal.

LUKOIL's experience of organizing and performing environmental protection work in the Baltic Sea was taken into account by the Committee of the Helsinki Convention in drawing up the Action Plan for protecting the environment from pollution by oil platforms in the area of the Baltic Sea. This Plan stipulates the need for all countries operating on the shelf of the Baltic Sea to observe the zero discharge principle.

This same experience, as well as the priority nature of the tasks involved in maintaining the unique marine environment of the Caspian Sea, provided the basis for selecting solutions for organizing development of the Korchagin oil and gas field, which was started up in April 2010.

In both cases, we are employing a set of measures to prevent and reduce any environmental impact and ensure readiness for immediate response.

For example, specially equipped vessels Professor Shtokman, AtlantNIRO, Atlantida and Kembry are engaged for environmental monitoring in the Baltic. Information about the state of the environment is also gathered by two seabed observatories, a hydrophysics station, two hydrometeorological stations and three meteo-stations set up directly on the offshore ice-resistant fixed platform, on the Curonian Spit, in Klaipeda, Baltiisk and Pionersky. Also, an underwater autonomous seismic station was set up for the first time in this region.

In addition, for rapid identification of oil pollution, the sea surface is monitored by satellite. Over the extended period of space monitoring, not a single oil slick has been identified in the proximity of the offshore ice-resistant fixed platform or along the route of the underwater pipeline. At the same time, numerous oil slicks coming from ships have been pinpointed.

The information management subsystem controls the operation of the information and measurement network, gathering, processing, storage, distribution, and provision to users of information about sources and levels of pollution of components of the natural environment, and also monitors observance of all environmental regulations.

Oil and gas development naturally culminates in transport of the produced hydrocarbons. At the same time, transshipment of crude oil at terminals and its transportation by tankers also entail considerable risks. LUKOIL's over ten years' accident-free experience of operating terminals on the Baltic, Barents and Caspian seas has confirmed their high level of reliability.

Q: How are things going currently with utilization of associated petroleum gas (APG) in LUKOIL?

A: In fact, we started tackling this issue long before the Government of the Russian Federation passed its Resolution No. 7 of January 8, 2009, which, from January 1, 2012, set the target indicator of APG burnt in flares at a maximum of 5% of the volume produced. Within the scope of the Environmental Safety Program, a target subprogram is being implemented within the Company for rational use of associated petroleum gas on the licensed subsoil sectors of LUKOIL Group companies.

During the 2009-2011 period, in fulfillment of the Program, 48 APG utilization facilities were started up and over 16.1 billion rubles spent on this. Hence our current APG utilization level of 88.5%, achieved mainly due to construction and startup of capacity for transportation and use of gas.

From 2012 through 2014, it is planned to start up 62 APG utilization facilities, bringing the utilization level up to 95%.

Let me note that achievement of this goal set by the Government Resolution is hampered by the current lack of certainty on many issues, such as what the basis for calculating this indicator should be: the holding company as a whole, the subsoil user or the field; whether the quantities of associated petroleum gas that objectively have to be burned are deducted, and so on. The federal executive authorities are only in the throes of drafting relevant documents, including setoff of funds allocated by subsoil users for increasing the use of associated petroleum gas.

Q: Since 2008, the Company has been actively developing the electricity sector. What place in the 2012-2021 Program is allocated to resource-saving, energy efficient technologies and green energy?

A: Since 1997, the Company has been developing and implementing energy saving target programs. The programs envisage making energy and fuel use more efficient by cutting losses and irrational consumption and applying new types of energy-saving equipment. In virtually all the spheres of the Company's activities, a corporate regulatory and methodological framework has been developed and adapted for energy saving and methodologies elaborated for calculating the specific fuel and energy resource consumption norms.

The first practical steps were the pilot projects, in 2009, for fitting out three gasoline filling stations in Serbia and Russia with an autonomous energy supply system based on photovoltaic stations.

In Serbia, a 4 kW photovoltaic plant was installed at a gasoline filling station close to Dobanovci, 25 km to the west of Belgrade. The second such photovoltaic plant, of similar design and capacity, was installed at a gasoline filling station near Nikola Tesla Airport, 18 km to the west of Belgrade.

In Russia, such a project was a momentous event. In September 2009, the Company started up the country's first gasoline filling station equipped with a domestically designed photovoltaic plant. Photovoltaic modules with an aggregate capacity of 10 kW were installed at the JSC LUKOIL-Yuzhnefteprodukt gasoline filling stations in Krasnaya Polyana.

The simplest and most effective method for utilizing solar energy is solar collectors (geo-collectors). These were used in a LUKOIL-Perm pilot project. In October 2010, geo-collectors for heating water were installed on the roof of an administrative building of the booster pipeline pumping station at Kueda (Perm Territory).

In February 2012, JSC LUKOIL-Uralnefteprodukt implemented a project for using solar collectors at a gasoline filling station in Orenburg. A solar collector with a surface area of 2.84 m2 and a heating capacity of 1.5 kW was installed for supplying the gasoline filling station with heat and hot water.

At the same time, at gasoline filling stations, LUKOIL is implementing projects for building small capacity windpower units. Implementation of the first such project resulted in installation of a windpower unit with a capacity of 37 kW at a LUKOIL-Uralnefteprodukt gasoline filling station in the Republic of Bashkortostan.

One more sphere is creation of heating systems based on thermal pumps, which are environment-friendly, very safe and highly reliable, have a long service life (15-20 years), and are controlled automatically and highly cost-effective.

LUKOIL's first thermal pump project was implemented in Latvia in May 2010 by LUKOIL Baltia R. So far, another four such projects have been implemented, this time in Russia. The results obtained show that use of thermal pump units has good prospects, so it is planned to use them in new projects at gasoline filling stations of petroleum product supply companies of the LUKOIL Group.

In 2011, a specialized company, JSC LUKOIL-Ecoenergo, was set up within the LUKOIL Group possessing four hydropower plants in Russia with an aggregate capacity of 295.3 MW and focused on developing the renewable energy sector within the Group. Again within LUKOIL-Ecoenergo, together with the Italian company ERG Renew, a JV was set up to implement renewable energy projects in Bulgaria, Romania, Ukraine and Russia.

Q: How are personnel trained in preventing and eliminating potential accidents, fires and emergencies at the Company's facilities?

A: Virtually all the Company's facilities are classed as explosion and fire hazardous, so one of the Company's main goals is to ensure that the management bodies of the LUKOIL Group companies, employees, personnel of emergency response teams and units are prepared to act to eliminate accidents, fires and emergencies.

The management and other personnel of JSC LUKOIL and other LUKOIL Group companies are trained in emergency response in accordance with Russian Federation Government resolution No. 57 dated September 4, 2003 "On training the population in a sphere of protection against natural and man-made emergencies."

I would like to note that every employee is trained in accident and emergency response, but special attention is focused on those belonging to LUKOIL's professional and outside emergency response units.

Thus, one of the above-mentioned educational institutions is LUKOIL's Corporate Training Center in Ilinka, Astrakhan Region, the first of its kind in Russia, for training personnel for working on offshore and other oil and gas facilities. The Center has the most advanced material and technical facilities and equipment. The study program includes practical exercises using a variety of training equipment simulating personnel's real working conditions on offshore oil and gas facilities in normal, abnormal and emergency situations. Since October 1, 2011, the Training Center has been training emergency response unit personnel under programs for primary training of rescue workers, a minimum level of knowledge of fire-fighting equipment and other programs for professional training of rescue workers.

After training in accident and emergency response, the Company's employees are certified as rescue workers and then professional or outside emergency response units consisting of certified rescue workers are set up at the industrial facilities.

The most significant way of training employees consists in regular training under real-life simulated conditions. For these purposes, study and training sessions are regularly organized at all the Company's facilities.

Since the greatest risks are characteristic of offshore facilities, particular attention is focused on training personnel of sea terminals (the Varandey oil shipment terminal, RPK-Vysotsk-LUKOIL-II in Vyborg, Leningrad Region, and the Kaliningrad Oil Terminal), where federal and regional level exercises are carried out twice a year; at oil and gas field infrastructure facilities located in the northern part of the Caspian Sea such training sessions are held once a year.

The standard of training of participants and the procedure by which various response units collaborate, including with foreign rescue workers, have repeatedly been extremely highly appraised by the Russian Ministry of Emergency Situations.




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Oil of Russia, No. 4, 2012
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