Most production waste is generated during well drilling and operation, and its respective level depends primarily on the volume of drilling work. The main types of waste are drilling mud and waste drilling fluids, which under environmental hazard classification criteria belong to the hazard classes IV (low hazard) and V (non-hazardous), and are subject to disposalHereinafter the term “disposal” is used within the meaning “use, neutralisation, and transfer to specialised organizations for processing and disposal.”. The total amount of waste generated in 2017 stood at 1,434.0 thousand tonnes, of which 1,297.3 thousand tonnes (90.5%) constituted hazard class IV and V waste.

In 2015-2017 the Company made the transition to the concept of pit-free drilling, whereby drilling waste generated is not stored on drilling platforms, but is instead allocated for use or decontamination. Consequently, the volume of waste generated during the year is compatible with the total volume of waste used, decontaminated, and transferred to third-party organizations.

The increase in generated waste in 2017 (by 38.8%) was attributable to a rise in volumes of drilling work (including horizontal well drilling, which requires drilling fluid to be replaced more frequently), the application of new regulations for accounting for drilling waste at LUKOIL-Western Siberia, and also significant volumes of disassembling and construction work carried out at LUKOIL-Nizhegorodnefteorgsintez and an increase in the sale of non-fuel goods (packaging and other household waste) in cafes and stores located at filling stations.

Generation of hazard class I-V waste and waste-handling at LUKOIL Group subsidiaries in Russia, thousand tonnes
2015 2016 2017
Waste generation, total 1,015.7 1,032.9 1,434.0
Amount of waste that was used, neutralized and transferred for use/neutralization by dedicated organizations, and buried 956.5 1,115.1 1,395.7
Annual volumes of waste disposal to new waste generation 0.9 1.1 1.0
Amount of waste at year-end 911.9 765.1 807.7
Note. Data on the volume of waste generated in 2017 are shown without rocky material produced during the excavation of oil wells at Yareganeft (fifth hazard class). Due to changes in the legislation covering waste-handling, since 2017 this waste has been accounted as storage waste and included in the balance sheet of waste generated at LUKOIL-Komi, where it will remain until it is utilized during the remediation stage.
Main types of waste from production activity and waste-handling techniques of LUKOIL Group subsidiaries in Russia
Activity Type of waste Waste-handling technique
Production of crude oil and natural gas Drilling waste Waste is recycled by dedicated contracting organizations.
Rocky material produced during underground mining When developing oil fields using mining methods (in the Komi Republic), rocky material is brought to the surface and piled in waste heaps – it is not subject to decontamination.
Oil-contaminated waste Oil-contaminated waste at oil and gas production subsidiaries primarily comprises oil-contaminated soil and sludge from tank and pipeline purging operations. LUKOIL uses tried-and-tested disposal (microbiological destruction) and decontamination (thermal treatment) techniques.
Oil and gas refining Oil-contaminated waste Oil-contaminated waste at oil and gas refineries mainly comprises sludge from tank and pipeline purging operations, oil/petroleum products entrapped in process water, etc. Disposal methods include slop oil being fed back into the technological process, and sludge being decontaminated at dedicated processing facilities.
Silt from biological treatment facilities Forms during the treatment process that removes organic compounds from water used for production and service water. Excessive biosilt is regularly removed from treatment facilities, then dried, and sometimes used in other operations (for example as fertilizer).
Production and distribution of electricity, gas, and water Sludge produced during the chemical treatment of water This waste is deposited in landfills.

The Company disposes waste accumulated in the pre-privatization period at LUKOIL Group subsidiaries in Russia from its own funds. Measures taken in 2017 allowed us to reduce the total amount of such waste by 41.1 thousand tonnes compared to 2016 (to 304.5 thousand tonnes as at 31 December 2017).

We pay close scrutiny to the quality of waste disposal work performed by contractors, and monitor their activities under the contracts concluded. We check waste-handling techniques, the condition of the production control system, and ensure that sufficient resources are available to perform contractual obligations. Cooperation between subsidiaries and contractors to improve the quality of their output is constantly expanding.