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PRESS-RELEASE
10.02.2015
LUKOIL PRESIDENT MEETS WITH EMPLOYEES IN SIBERIA AND TALKS WITH YUGRA RESIDENTS VIA TV BRIDGE

As part of his working visit to Kogalym, Vagit Alekperov, OAO LUKOIL President, and Natalya Komarova, Governor of the Khanty-Mansi Autonomous Okrug-Yugra, met with the employees of OOO LUKOIL-West Siberia (a wholly-owned subsidiary of OAO LUKOIL).

The meeting focused on plans and tasks facing LUKOIL-West Siberia in 2015 and also on issues of the company’s development and strategy.

Vagit Alekperov and Natalya Komarova also held a teleconference with residents of LUKOIL’s four key cities in Yugra: Langepas, Urai, Kogalym and Pokachi. The audience, numbering more than ten hundred, included oilmen, representatives of the public and the municipal sectors. The program was broadcast live by the local TV channels, the Yugra District Television and Radio Company, the digital “Nashi Goroda” (our cities) television channel of OAO Rostelekom and also at the websites of OAO LUKOIL, the Yugra OTRK, the Yugra Regional Information Center and the Zapadnaya Sibir (West Siberia) Media Holding.
PRESS-RELEASE
10.02.2015
LUKOIL TO SUPPORT SOCIAL AND ECONOMIC DEVELOPMENT OF ELEVEN TERRITORIES IN YUGRA

Vagit Alekperov, OAO LUKOIL President, and Natalya Komarova, Governor of the Khanty-Mansi Autonomous Okrug (district), signed a supplement agreement to the cooperation agreement between the oil company and the KhMAO-Yugra government, in Kogalym today.

As part of the agreement, the company will invest in the social and economic development of 11 territories of the Khanty-Mansi Autonomous Okrug in 2015. Underway in Kogalym is reconstruction of a municipal out-patient hospital, construction of a 16-story residential house and completion of the Victory Park. In Langepas, a water sports complex, the Neftyanik (oilman), and a garden square, Molodozheny (newlyweds), will be constructed. In Urai, a biathlon center. The face of the city hospital will be repaired and a ski resort will be designed in Pokachi. Obelisks will be created with the support of the oilmen for the Victory Park in Mezhdurechensky Urban Settlement of Kondinsky District.

The construction of the third stage of the city stadium and an indoor ice rink with synthetic ice will be launched in Sovetsk, a cultural and sports complex with a library and a multi-purpose game arcade will be constructed in the village of Yarki in the Khanty-Mansi District, while a leisure center will be built in Oktyabrskoye settlement to include a recreation complex, a children’s music school, a library and a museum. In the Beloyarsky District, the embankment will be reconstructed. In the village of Russkinskaya, Victory Square will be redeveloped and a field for national sports constructed, while a gas-boiler house will be constructed in Agan settlement of the Nizhnevartovsk District.

For reference:

The Cooperation Agreement between OAO LUKOIL and the Government of the Yamalo-Nenets Autonomous District was signed on October 25, 2013. The document shall be valid for five years.

PRESS-RELEASE
04.02.2015
LUKOIL COMMISSIONS PLANT TO PROCESS SULFUR AT BAYANDYSKOYE FIELD IN KOMI REPUBLIC

A unit for recovery and granulation of sulfur was commissioned today at Bayandyskoye field of OOO LUKOIL-Komi (a wholly-owned subsidiary of OAO LUKOIL). The new production facility was launched by Vagit Alekperov, OAO LUKOIL President, and Vyacheslav Gaizer, Head of the Komi Republic.

The plant will make it possible to fully utilize hydrogen sulfide and will allow for no harmful emissions of the gas into the environment, which complies with the RF Government Regulation “On Measures to Reduce Atmospheric Air Pollution with Associated Petroleum Gas Combustion Products at Flares”.

“Development of Bayandyskoye field infrastructure is a key point in the development of the Denisovsky license area. The commissioning of the new unit for recovery and granulation of sulfur solves important engineering and no less important environmental issues,” Mr. Alekperov noted.

 

PRESS-RELEASE
06.02.2015
PROVED HYDROCARBON RESERVES OF LUKOIL GROUP GO UP BY 1% TO 17.6 BILLION BARRELS OF OIL EQUIVALENT AND FULLY REPLACE PRODUCTION IN 2014

OAO LUKOIL finished an evaluation and independent audit of its oil and gas reserves as at December 31, 2014. The evaluation was performed in accordance with the US Securities and Exchange Commission (SEC) standards until the economic limit of commercial production is reached.

The audit results by the U.S. firm Miller and Lents suggest that the company’s proved hydrocarbon reserves as at December 31, 2014 came to 17.6 billion barrels of oil equivalent, including 13.6 billion barrels of oil and 23.9 trillion cubic feet of gas.*

Replacement of production by proved reserves increment in 2014 came to 121%.

Proved reserves increased due to geological exploration and related discoveries, production drilling in conventional regions covered by the company’s presence in Russia and abroad, and totaled 815 million barrels of oil equivalent. The bulk of added proved reserves in the company’s international projects was caused by West Qurna-2 field in Iraq, commissioned in March of 2014, and also by additional volumes of the Mishrif formation.

The growth of the proved reserves by 234 million barrels of oil equivalent is mainly related to the company’s international assets, primarily to the Azeri project, where LUKOIL Overseas – as part of an international consortium – started implementation of Stage-2, authorized at the end of 2013, of the development of Shakh-Deniz, an offshore gas-condensate field.

The company also completed an estimate of the contingent resources according to the PRMS classification. As at December 31, 2014, the contingent resources of the 3C** category totaled 12.0 billion barrels of oil equivalent. The 1.7-percent shrinkage of the contingent resources, as compared with the year 2013, results from the reclassification of some of the resources as reserves. The shrinkage also reflects improvements in the reservoir management plans at the producing fields, as well the tax benefits granted by the Russian Federation government for hard-to-recover reserves.

The company management expects that the oil and gas volumes currently classified as contingent reserves will be transferred to the proved reserves pool affected by the nearing commissioning dates, progress in the implementation of the gas-utilization program, completion of pilot operations, and application of new highly efficient techniques which enable cost-effective development of hard-to-recover reserves.

In terms of proved hydrocarbon reserves LUKOIL retains its leading positions among Russian and international companies.

 

LUKOIL Group Oil and Gas Reserves**

As of December 31, 2014

Oil

Gas

Oil + Gas*

 

million barrels

billion cubic feet

million barrels of oil equivalent

Proved reserves

13,594

23,946

17,585

including:

     

Developed reserves

8,629

7,724

9,916

Undeveloped reserves

4,965

16,222

7,669

Probable reserves

5,158

9,990

6,823

Possible reserves

2,922

2,720

3,375

 

 

Estimates of Future Cash Flow from LUKOIL Group’s Reserves Development**

As of December 31, 2014, million USD

Proved

Probable

Possible

Future revenue from sales of oil and gas

913,495

341,429

186,673

Future oil and gas production and development costs

631,207

244,295

149,050

Future non-discounted cash flow before income tax***

282,288

97,134

37,623

Discounting (10%)

156,757

75,934

32,572

Discounted cash flow before income tax***

125,531

21,200

5,051

*Conversion ratio from cubic feet to barrels:

   1 barrel = 6,000 cubic feet

** the values for OOO Bashneft-Polyus are included as part of LUKOIL’s share in the proved reserves and cash flows from the Miller and Lents report for OAO Bashneft in accordance with SEC standards; the values for category 3C probable, possible reserves and contingent resources – as part of the report in accordance with PRMS classification.

*** income tax is included in the project calculation, where it affects the volumes of reserves

PRESS-RELEASE
04.02.2015
LUKOIL SIGNS AGREEMENT ON COOPERATION WITH KOMI REPUBLIC UNTIL 2019

Vagit Alekperov, OAO LUKOIL President, and Vyacheslav Gaizer, Head of the Komi Republic, signed a cooperation agreement, in Usinsk today, between the company and the republic, to remain in force till 2019. Protocol No. 1 to the agreement, for the year 2015, was also signed.

The parties intend to implement measures designed to develop the fuel and energy complex in the region, improve its financial and economic situation, and maintain the social stability and social welfare of the Komi population.

Specifically, the protocol to the agreement offers funding for a number of social projects, including the second stage of the “Program of Social Development in the Settlement of Yarega” to be provided by the oilmen. It envisages the capital repair of the Children’s Activity Center under the auspices of Secondary School No. 15, the Shakhter (miner) Sports Complex and Kindergarten No. 32.

“We regard the Timan-Pechora oil and gas province as a priority region for our operations. We have accumulated considerable assets, personnel and production facilities here. Thousands of residents, including our own employees and those of our contractors, are involved in supporting the process of oil production. Their working and living conditions are of great importance to us. The agreement signed today will enable us to continue, jointly with the regional government, our policy aimed at the improvement of living standards in the Komi Republic,” Mr. Alekperov commented.

“LUKOIL is a strategic partner for the Komi Republic. The new agreement is a consistent step in our cooperation. Above all, it stands for the development of the industrial potential of the republic and the creation of new production and processing capacities, which brings about new jobs and replenishes the taxation base. Of particular note is that the oilmen do fulfill their social obligations. We welcome the company’s focus on active involvement in the life of the region. The republican government, interested in the sustainable performance of LUKOIL as a backbone company in Komi, is ready to provide the necessary support to ensure its efficient operation,” Mr. Gaizer noted.