LUKOIL Holds Annual Shareholder Meeting Launches Two New Facilities in Russia

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

According to the report, LUKOIL’s net income reached USD 4.7 bn, its EBITDA reached USD 15,982 million and its cash flow amounted to USD 925 million – all indicators of a robust financial performance by the company. Ever increasing shareholder returns are also a testament to LUKOIL’s financial stability and commitment to fulfilling its obligations to shareholders.

Vagit Alekperov, President, OAO “LUKOIL”:“Dividends have increased by 40% versus 2013. Last year’s dividend yield exceeds 7.5%, which is higher than the industry average for the largest non-state-owned oil & gas companies.”

This year’s General Meeting of Shareholders coincided with the launch of LUKOIL’s new primary oil refining installation (ELOU AVT-1) at the Volgograd refinery, in a ceremony attended by LUKOIL President Vagit Alekperov and Deputy Prime Minister of Russia Arkady Dvorkovich. The unit has a capacity of 6 million tons of oil per year, is equipped with modern control system and fully complies with the Russian safety legislation.

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. The program provides for the launch of new objects, total investment in which is said to have amounted to over 5 billion dollars.

Earlier, on June 24, the town of Budennovsk (Southern Russia) saw the ceremonial launch of of a combined-cycle gas turbine (CCGT-135) with a capacity of 153 MW. From 2011 to 2015, LUKOIL carried out the launch of four power plants with a total installed capacity of 945 MW. The launch of these plants led to the creation of 227 new jobs. The total investment into the program was over USD 1 bn.

LUKOIL’s program of modernizing its refining capacities is largely responsible for the company’s 10% increase in energy efficiency between 2008 and 2014. In 2014 alone, the throughput at the Company’s own and affiliated refineries increased by 0.3% to 66.6 million tonnes. This is especially significant in the wake of the new adjustment to Russian oil and gas taxation introduced in early 2014, which is widely regarded as designed to benefit oil companies that export most of their crude oil and high-grade oil products and adversely affect refiners and petrochemical manufacturers. 

The fact that LUKOIL’s refining program keeps going strong bucks the market trend and is a testament to the company’s resilience and ability to maximize its efficiency and profitability of its downstream operations despite less than favourable externalities.

Vagit Alekperov, President, OAO “LUKOIL”:“Even in challenging economic conditions, LUKOIL has maintained stable performance indicators. We are especially focused on increasing our efficiency and maintaining our industry leadership. I believe that the company’s management has provided a fair and adequate response to the challenges facing Russia and the world’s oil industry through a growth across a number of parameters. Specifically, last year LUKOIL once again increased its sales revenues, which totaled USD 144.2 billion. This is 1.9% higher than in 2013.”