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    Nov

    LUKOIL: Reports Preliminary Operating Data for the Third Quarter and Nine Months of 2020

    For the nine months of 2020 LUKOIL Group’s average hydrocarbon production excluding the West Qurna-2 project was 2,065 kboe per day, which is 11.6% lower year-on-year. In the third quarter of 2020 hydrocarbon production was 1,885 kboe per day, which is 4.9% lower quarter-on-quarter. Production was reduced due to the new OPEC+ agreement and a decrease in gas supply from Uzbekistan to China, that were driven by a negative impact of the COVID-19 pandemic on hydrocarbon demand.

    Hydrocarbon production, kboe per day

    3Q    2020 2Q    2020   9M    2020 9M    2019
    1,885 1,982 Total (excluding the West Qurna-2 project) 2,065 2,337

    Oil production excluding the West Qurna-2 project was 58.5 million tonnes for the nine months of 2020, which is 9.0% lower year-on-year. In the third quarter of 2020 oil production decreased by 3.0% quarter-on-quarter, to 18.2 million tonnes. Oil production dynamics was driven by the OPEC+ agreement concluded in April 2020, which led to limitations on oil production by the Group in Russia and at certain international projects. In particular, due to the agreement crude oil production by the Group in Russia was cut in May 2020 by approximately 310 thousand barrels per day, or by 19%, as compared to the level of the first quarter of 2020. Crude oil production in Russia was subsequently increased by approximately 20 thousand barrels per day in July and incrementally by 60 thousand barrels per day in August.

    Oil production, thousand tonnes

    3Q    2020 2Q    2020   9M    2020 9M    2019
    18,249 18,817 Total (excluding the West Qurna-2 project) 58,450 64,238
    17,416 17,877 Russia 55,658 61,491
    17,292 17,758 Subsidiaries 55,277 61,033
    124 119 Share in affiliates 381 458
    833 940 Outside of Russia 2,792 2,747
    495 567 Subsidiaries 1,650 1,494
    338 373 Share in affiliates 1,142 1,253
    565 1,094 Compensation oil from the West Qurna-2 project 2,380 1,192
    18,814 19,911 Total 60,830 65,430

    Despite a sharp decrease in oil prices and external limitations on production volumes, active development of the priority projects continued. In particular, in West Siberia total oil and gas condensate production for the nine months of 2020 at the V. Vinogradov, Imilorskoye, Sredne-Nazymskoye and Pyakyakhinskoye fields increased by 23.6% year-on-year and exceeded 3.1 million tonnes.

    High viscosity oil production at the Yaregskoye field and Permian reservoir of the Usinskoye field for the nine months of 2020 increased by 5.1% year-on-year, to 3.9 million tonnes.

    Implementation of drilling programs at the V. Filanovsky and Yu. Korchagin fields in the Caspian Sea allowed to maintain production at project levels. Total oil and gas condensate production for the nine months of 2020 was 5.6 million tonnes, which is 2.0% higher year-on-year. In September 2020 jackets were installed in the Caspian Sea for the fixed ice-resistant platform as part of the V.I. Grayfer field development.

    The share of the abovementioned projects in the LUKOIL Group’s oil production excluding the West Qurna-2 project amounted to 21% for the nine months of 2020 as compared to 18% for the nine months of 2019.

    Gas production, million cubic meters

    3Q    2020 2Q    2020   9M    2020 9M    2019
    5,971 6,399 Total 20,782 25,614
    4,299 4,305 Russia 13,269 13,182
    4,267 4,284 Subsidiaries 13,194 13,116
    32 21 Share in affiliates 75 66
    1,672 2,094 Outside of Russia 7,513 12,432
    1,534 1,936 Subsidiaries 7,051 11,959
    138 158 Share in affiliates 462 473

    For the nine months of 2020, LUKOIL Group’s gas production was 20.8 billion cubic meters, which is 18.9% lower year-on-year. In the third quarter of 2020 gas production decreased by 6.7% quarter-on-quarter, to 6.0 billion cubic meters. Production decline was due to lower demand from China for gas produced in Uzbekistan amid the COVID-19 pandemic. At the same time gas production in Russia for the nine months of 2020 increased by 0.6% year-on-year driven by the launch of the second stage of the booster compressor station at the Nakhodkinskoye field in December 2019.

    Refinery throughput, thousand tonnes

    3Q    2020 2Q    2020   9M    2020 9M    2019
    14,848 13,525 Total for LUKOIL Group refineries 45,463 51,737
    10,207 9,283 Russia 30,427 33,326
    4,641 4,242 Outside of Russia 15,036 18,411
    4,215 3,998 Oil processing 13,803 16,986
    426 244 Refined products processing 1,233 1,425
    41 24 Third party refineries abroad 118 4,973

    For the nine months of 2020 refinery throughput at LUKOIL Group’s refineries was 45.5 million tonnes, which is 12.1% lower year-on-year. The decline was due to throughput optimization at some of the Company’s refineries in the second and third quarters of 2020 on the back of lower demand for petroleum products and decline in refining margins due to the COVID-19 pandemic, as well as due to scheduled maintenance works. In the third quarter of 2020 refinery throughput was increased by 9.8% quarter-on-quarter.

    Refinery throughput in Russia for the nine months of 2020 decreased by 8.7% year-on-year, to 30.4 million tonnes, due to scheduled maintenance works and throughput optimization at Nizhny Novgorod and Ukhta refineries in the second quarter of 2020. In the third quarter of 2020 refinery throughput in Russia was increased by 10.0% quarter-on-quarter.

    Refinery throughput in Europe for the nine months of 2020 decreased by 18.3% year-on-year, to 15.0 million tonnes, due to scheduled maintenance works at refineries in Bulgaria and the Netherlands, as well as throughput optimization at European refineries in the second and third quarters of 2020. In the third quarter of 2020 refinery throughput in Europe was increased by 9.4% quarter-on-quarter, to 4.6 million tonnes, mainly due to partial throughput recovery at refineries in Bulgaria and Italy.

    Note:

    LUKOIL will release its Condensed Interim Consolidated Financial Statements prepared in accordance with IFRS and MD&A for the third quarter and nine months of 2020 on November 24, 2020.

    The information in this press release is an estimate of the LUKOIL Group’s results for the third quarter and nine months of 2020 and therefore constitutes forward-looking statements. This information is preliminary and based on information available at the date of this document, and may be revised after statistical, financial, tax and accounting statements become available. The information on the LUKOIL Group’s operational results in this press release are subject to many external factors which may cause the actual results to differ materially from those expressed or forecasted in this press release for the third quarter and nine months of 2020. The LUKOIL Group assumes no obligation to update or alter its forward-looking statements, whether as a result of new information, subsequent events or otherwise, except to the extent required by applicable law.

    This document does not constitute or form part of an invitation or inducement to engage in investment activity with, or any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of, the LUKOIL Group, nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of, or any investment in, the LUKOIL Group.