PJSC Lukoil Oil Company (Russian in Cyrillic script: Лукойл, stylized as LUKOIL and ЛУКОЙЛ in Russian Cyrillic) is a Russian multinational energy corporation headquartered in Moscow, specializing in the business of extraction, production, transport, and sale of petroleum, natural gas, petroleum products, and electricity.
It was formed in 1991 when three state-run companies from western Siberia merged. The original companies were named after the towns in Khanty–Mansi Autonomous Okrug where each was based: Langepasneftegaz, Urayneftegaz, and Kogalymneftegaz. Its new name is the combination of the acronym LUK (initials of the oil-producing cities of Langepas, Uray, Kogalym) and the English word oil.[2][3]
Lukoil is the third largest company in Russia after Rosneft and Gazprom, and the country's largest non-state enterprise in terms of revenue, with ₽4,744 billion in 2018.[4][5] In the 2020 Forbes Global 2000, Lukoil was ranked as the 99th-largest public company in the world. Internationally, it is one of the world's largest crude oil producers. In 2019, the company produced 87.488 million metric tons of oil (1.639 million barrels per day) and 35.046 billion cubic meters of natural gas.[6] In 2021, it had operations and subsidiaries in more than 30 countries around the world, but as of 2025, that was down to 14 countries.[7] The company's revenue amounted to 2.9 trillion rubles in 2022, and reached 3 trillion rubles in 2024.[8]
History
Origins
"Langepas, Uray, and Kogalym" oil (Lukoil) was established by the Soviet Union Council of Ministers Decree No. 18 on 25 November 1991, as a state-owned enterprise. In the new company, three oil production companies, Langepasneftegaz, Uraineftegaz, and Kogalymneftegaz, processing company Permnefteorgsintez, and the Volgograd and Novosibirsk refineries, were merged (the latter soon came under the control of the authorities of Bashkortostan).[9]
The central figure in the company's founding was the Soviet deputy minister of oil production Vagit Alekperov.[9] He came to believe the only way Russians could compete against Western companies was to copy their business model. That meant vertically integrating the three branches of the industry—exploration, refining, and distribution—that were strictly separate under the old Soviet system.[10]
Operations
Oil and gas production
Hydrocarbon reserves
The company's proved hydrocarbon reserves as of 1 January 2011, amounted to 17.255 billion barrels of oil equivalent, including 13.319 billion barrels of petroleum and 0.67 trillion cubic meters of natural gas. In terms of proved oil reserves, Lukoil, according to its own information, was the sixth-largest private oil company in the world at the time.[39][40]
In addition, probable hydrocarbon reserves as of 1 January 2011 were 8.46 billion barrels of oil equivalent (including oil, 6.47 billion barrels of petroleum, and 0.34 trillion cubic meters of natural gas). Possible reserves were 3.17 billion barrels of oil equivalent (including 2.78 billion barrels of petroleum and 65.7 billion cubic meters of natural gas).[39]
Corporate affairs
Shareholders
In July 2010, the top managers of the company owned the largest stake (more than 30%) of the company's shares: CEO Vagit Alekperov owning 20.6% and vice-president Leonid Fedun owning 9.8%. The American oil company ConocoPhillips owned 19.21% but, due to financial difficulties, completely withdrew from the shareholders of Lukoil, selling its shares, and in part to Lukoil itself by February 2011. The remaining shares were freely traded on the London Stock Exchange, the Frankfurt Stock Exchange, the Russian Trading System, and the Moscow Interbank Currency Exchange. The company's market capitalization was $60.4 billion as of June 2018.
Management
List of directors that were elected on 21 June 2018:[61]
In September 2022, chairman Ravil Maganov
Environmental record
According to Lukoil, their numbers for 2007 showed a 7.8% decrease in the volume of pollutant effects and a 3.8% decrease in the area of contaminated lands compared to 2006. These numbers came after an appeal from EMERCON, the Ministry of the Russian Federation for Civil Defense, Emergencies and Natural Disaster Recovery, which proposed that Lukoil participate in the development of monitoring, prevention, and emergency recovery systems.[70]
In an effort to increase productivity, Lukoil organized a contract to commence oil pumping operations in the Azerbaijani sector of the Caspian Sea. It conducted an Environmental Impact Assessment of the drill site to facilitate a second exploration drill. This block, D-222, was the largest prospective structure in the north-east section of the Caspian Sea as of 2008.[71] The key issue was to assess how much damage the oil block would inflict on local fish populations. Taking into account the depth of the operation, around 700 meters, the amount of harm was projected to be minimal, with the majority of the damaged marine life being plankton and benthos. A rescue and salvage ship would be stationed there to mitigate the environmental effects on the area. Lukoil would develop contingency plans for oil spills and implement an environmental monitoring system.[72]
Controversies
Environmental incidents
On one of the storage ponds at JSC "Lukoil-Volgograd-neftepererabotka" between 25 July and 8 August 1996, oil sludge was ignited due to the improper conduct of welding operations. The surface layer of oil products was formed during the last two decades, and a similar ignition in this area was already noted in 1972. As a result of the 1996 fire, approximately 50,000 tons of oil products were burned, as the soil at this site was already saturated with volatile fractions. Where the fire was first lit, the concentration of carbon monoxide exceeded the permissible standards by almost 28 times, nitrogen dioxide tripled, hydrogen sulfide and phenol more than 1.5 times. In the residential areas of the Krasnoarmeysky district of Volgograd, located 7 km from the fire, as well as in the nearby settlements - B. and M. Chapurnik, Dubov Gully, Chervlen, Tingut - the content of combustion products in the air also exceeded the maximum permissible concentration. In the liquidation of this major technogenic emergency with severe environmental consequences, the divisions of the Ministry of Emergency Situations of Russia took part.[77][78]
In the autumn of 2003, the Russian Emergencies Ministry revealed the oil spill as a result of the depressurization of the interfacial oil pipeline belonging to the TPP Lukoil-Usinskneftegaz on the territory of the
Criticism
- The Association of Small and Medium-Sized Oil Production Enterprises, also known as Assoneft, criticized Lukoil and the authorities of the Komi Republic for providing tax breaks to the oil companies of the region, which are obliged to extract at least 7 million tons of oil per year and (or) recycle at least 3 million tons. Only two enterprises — Lukoil-Komi and Lukoil-Ukhtaneftepererabotka — correspond to these conditions in the region. In March 2007, the Federal Antimonopoly Service initiated a case against the State Council of the Komi on the grounds of violation of Part 1 of Art. 15 of the Law "On Protection of Competition" concerning restricting competition in the oil production and refining markets.[110][111]
- In October 2005, then-prime minister of Lithuania, Algirdas Brazauskas, was at the center of the scandal involving Lukoil. The opposition of the Lithuanian parliament, Homeland Union, began collecting signatures for the creation of a parliamentary commission to investigate the entrepreneurial activity of Brazauskas' wife, Christina Butrimene-Brazauskiene, in particular with the acquisition of a 38% stake in the elite Vilnius Crowne Plaza hotel from the wife of the head of the Lukoil-Baltija
See also
- Companies of comparable role
- Exxon-Mobil
- Shell plc
- List of companies of Russia
- Petroleum industry of Russia
- Suspicious deaths of Russian businesspeople (2022–2024)
External links
References
- CEO of Russian LUKOIL congrats President Ilham Aliyev on election win www.news.az, 22 February 2024, retrieved 14 March 2024^
- Lukoil - Langepas, Uray and Kogalym Oil (Russia oil company named after major producing cities) www.acronymfinder.com, retrieved 2018-01-12^
- Lukoil - History