Oil and gas exploration and production
Oil and gas exploration and production form the central link in LUKOIL Group operations, and are the main creators of value for the Company. We possess a high-quality portfolio of assets that are diversified in terms of both geography and type of reserve.
Proved oil and gas reserves consist mainly of those in the conventional category. In 2017 these amounted to 16.0 billion BOEBarrels of oil equivalent under the SEC classification (US Securities and Exchange Commission)., of which oil made up 75%. In the reporting year, the main increases in proved oil and gas reserves were achieved in Western Siberia and fields in the Caspian Sea.
The operation of the V. Filanovsky field (situated in the Russian sector of the Caspian Sea) made a significant contribution to the trend in oil production in 2017: it produced 4.6 million tonnes during the year, which exceeded the target level. The Company began production drilling as part of the field’s second development phase – here the “zero discharge”The “zero discharge” means that all the operational waste generated at the drilling rig except for water in the power units’ external cooling circuit is taken to onshore facilities where it is treated, neutralized, and recycled. This way the Company avoids marine environment pollution. principle is also applied.
We continued to actively implement projects to develop hard-to-recover reserves (high-viscosity oil in the Yaregskoye field and Permian-Carboniferous deposit of the Usinskoye field in the Komi Republic). This year, record amounts of oil were produced at these fields: 1.1 million and 2.3 million tonnes, respectively.
Although there was a slight drop in total oil production in the year, under conditions of external limitations, gas production rose considerably (a 16% rise compared to 2016), as a result of the commencement of gas extraction at the Pyakyakhinskoye field in the Yamal-Nenets Autonomous Area in Russia and a doubling of gas production under the Gissar project in Uzbekistan.