ISSN 2330-717X

LUKOIL Reports Preliminary Operating Data

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For the nine months of 2020 LUKOIL Group’s average hydrocarbon production excluding the West Qurna-2 project was 2,065 kboe per day, which is 11.6% lower year-on-year. In the third quarter of 2020 hydrocarbon production was 1,885 kboe per day, which is 4.9% lower quarter-on-quarter.

Production was reduced due to the new OPEC+ agreement and a decrease in gas supply from Uzbekistan to China, that were driven by a negative impact of the COVID-19 pandemic on hydrocarbon demand.

 Hydrocarbon production, kboe per day

3Q 20202Q 20209M 20209M2019
1,8851,982Total (excluding the West Qurna-2 project)2,0652,337

Oil production excluding the West Qurna-2 project was 58.5 million tonnes for the nine months of 2020, which is 9.0% lower year-on-year. In the third quarter of 2020 oil production decreased by 3.0% quarter-on-quarter, to 18.2 million tonnes. Oil production dynamics was driven by the OPEC+ agreement concluded in April 2020, which led to limitations on oil production by the Group in Russia and at certain international projects. In particular, due to the agreement crude oil production by the Group in Russia was cut in May 2020 by approximately 310 thousand barrels per day, or by 19%, as compared to the level of the first quarter of 2020. Crude oil production in Russia was subsequently increased by approximately 20 thousand barrels per day in July and incrementally by 60 thousand barrels per day in August.

Oil production, thousand tonnes

3Q 20202Q 20209M 20209M2019
18,24918,817Total (excluding the West Qurna-2 project)58,45064,238
17,41617,877Russia55,65861,491
17,29217,758Subsidiaries55,27761,033
124119Share in affiliates381458
833940Outside of Russia2,7922,747
495567Subsidiaries1,6501,494
338373Share in affiliates1,1421,253
5651,094Compensation oil from the West Qurna-2 project2,3801,192
18,81419,911Total60,83065,430

Despite a sharp decrease in oil prices and external limitations on production volumes, active development of the priority projects continued. In particular, in West Siberia total oil and gas condensate production for the nine months of 2020 at the V. Vinogradov, Imilorskoye, Sredne-Nazymskoye and Pyakyakhinskoye fields increased by 23.6% year-on-year and exceeded 3.1 million tonnes.

High viscosity oil production at the Yaregskoye field and Permian reservoir of the Usinskoye field for the nine months of 2020 increased by 5.1% year-on-year, to 3.9 million tonnes.

Implementation of drilling programs at the V. Filanovsky and Yu. Korchagin fields in the Caspian Sea allowed to maintain production at project levels. Total oil and gas condensate production for the nine months of 2020 was 5.6 million tonnes, which is 2.0% higher year-on-year. In September 2020 jackets were installed in the Caspian Sea for the fixed ice-resistant platform as part of the V.I. Grayfer field development.

The share of the abovementioned projects in the LUKOIL Group’s oil production excluding the West Qurna-2 project amounted to 21% for the nine months of 2020 as compared to 18% for the nine months of 2019.

For the nine months of 2020, LUKOIL Group’s gas production was 20.8 billion cubic meters, which is 18.9% lower year-on-year. In the third quarter of 2020 gas production decreased by 6.7% quarter-on-quarter, to 6.0 billion cubic meters. Production decline was due to lower demand from China for gas produced in Uzbekistan amid the COVID-19 pandemic. At the same time gas production in Russia for the nine months of 2020 increased by 0.6% year-on-year driven by the launch of the second stage of the booster compressor station at the Nakhodkinskoye field in December 2019.

Refinery throughput, thousand tonnes

3Q 20202Q 20209M 20209M2019
14,84813,525Total for LUKOIL Group refineries45,46351,737
10,2079,283Russia30,42733,326
4,6414,242Outside of Russia15,03618,411
4,2153,998Oil processing13,80316,986
426244Refined products processing1,2331,425
4124Third party refineries abroad1184,973

For the nine months of 2020 refinery throughput at LUKOIL Group’s refineries was 45.5 million tonnes, which is 12.1% lower year-on-year. The decline was due to throughput optimization at some of the Company’s refineries in the second and third quarters of 2020 on the back of lower demand for petroleum products and decline in refining margins due to the COVID-19 pandemic, as well as due to scheduled maintenance works. In the third quarter of 2020 refinery throughput was increased by 9.8% quarter-on-quarter.

Refinery throughput in Russia for the nine months of 2020 decreased by 8.7% year-on-year, to 30.4 million tonnes, due to scheduled maintenance works and throughput optimization at Nizhny Novgorod and Ukhta refineries in the second quarter of 2020. In the third quarter of 2020 refinery throughput in Russia was increased by 10.0% quarter-on-quarter.

Refinery throughput in Europe for the nine months of 2020 decreased by 18.3% year-on-year, to 15.0 million tonnes, due to scheduled maintenance works at refineries in Bulgaria and the Netherlands, as well as throughput optimization at European refineries in the second and third quarters of 2020. In the third quarter of 2020 refinery throughput in Europe was increased by 9.4% quarter-on-quarter, to 4.6 million tonnes, mainly due to partial throughput recovery at refineries in Bulgaria and Italy.

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