LUKOIL Launches Two Facilities, Holds Annual Shareholder Meeting

Published Jun 26, 2015
LUKOIL President Vagit Alekperov
LUKOIL President, Vagit Alekperov

On June 25, LUKOIL, one of the world’s largest private oil & gas companies and Russia’s second largest oil producer held its annual General Meeting of Shareholders in Volgograd, southern Russia. The event focused on the presentation of LUKOIL’s 2014 Annual Report and the financial statements for the fiscal year.

A testament of the company’s healthy performance, LUKOIL’s net income reached USD 4.7 billion, with its EBITDA amounting to USD 15,982 million and the cash flows of USD 925 million. Meanwhile, dividends per ordinary share were up 20% y-on-y – also an indication of LUKOIL’s financial stability and commitment to fulfilling its obligations to shareholders.

LUKOIL’s shareholders’ meeting came on the heels of the launch of new primary oil refining installation (ELOU AVT-1) at the company’s Volgograd refinery. The official ceremony was attended by LUKOIL’s President Vagit Alekperov and the Deputy Prime Minister of Russia Arkady Dvorkovich. ELOU AVT-1 has a capacity of 6 million tons of oil per year and is equipped with a modern control system, fully complying with the Russian safety legislation.

Vagit Alekperov, President, OAO LUKOIL:"The construction of the new installation was carried out in accordance with the program of modernization of OAO LUKOIL’s refining capacities. The installation was put into operation as part of the large-scale program of modernization of refining capacities that is being implemented by the company.”

With a total investment of over 5 billion dollars, LUKOIL’s modernization program prompted a launch of several new facilities. On June 24, LUKOIL launched a combined-cycle gas turbine (CCGT-135), whose capacity stands at 153 MW in the town of Budennovsk in southern Russia.

CCGT-135 commenced its supplying of power to the Russian Wholesale Power Market (RWPM) on the January the 3rd 2015, the date of the final stage of implementation of LUKOIL’s program under the Agreement on the supply of power on the wholesale market, prescribed by a Russian government decree.

From 2011 to 2015, LUKOIL carried out the launch of four power plants with a total installed capacity of 945 MW, exceeding its obligations under the agreement by 55 MW and creating 227 new jobs. The company has invested over USD 1 billion into the program.

LUKOIL’s modernization of its refining capacities has led to a 10% increase in the company’s energy efficiency between 2008 and 2014. The throughput at the company’s own and affiliated refineries went up by 0.3% to 66.6 million tons in 2014 alone. This is a positive sign in the wake of the recent changes to the Russian oil and gas taxation rules. The amendments, which came into effect in early 2014, are largely seen as beneficial to the oil companies that export most of their crude oil and high-grade oil products.

At the same time, the new rules are perceived as disadvantageous to refiners and petrochemical manufacturers. Despite these legislative changes, LUKOIL’s refining program managed to defy the market trend, signaling the company’s ability to maximize the efficiency and profitability of its downstream operations in spite of the challenging legal and economic environment.

Tags: Lukoil


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