ANNUAL REPORT 2005 - Lukoil

ANNUAL REPORT, 2005
LICENSING
The Company strives to obtain new licenses for mineral resource exploitation, to extend the term of existing
licenses up to field exhaustion, and to recast licenses as required by reorganization of subsidiaries.
LUKOIL Group had 402 licenses on its balance at the start of 2006, of which 353 give rights to mineral
resource exploitation and 49 are geological exploration licenses, including prospecting and assessment
of mineral resources.
In 2005 LUKOIL obtained five licenses for mineral resource exploitation at auctions, acquired four
licenses by purchase of stakes in Geoilbent and Primorieneftegaz, extended the term of 33 licenses
up to field exhaustion, and extended eight licenses to completion of geological study of the relevant
territories. LUKOIL subsidiaries recast 42 licenses.
FIELD DEVELOPMENT AND OIL PRODUCTION
2.2% of global oil production
18.4% of Russian oil production
Fourth biggest international publicly traded oil company by production of oil
Sixth biggest international publicly traded oil company by production of hydrocarbons
Oil production by LUKOIL Group in 2005 was 90.158 million tonnes (1.820 million barrels per day)*,
including 86.193 million tonnes produced by subsidiaries. Average daily oil production by LUKOIL
Group rose by 4.7%. Organic growth of production was 4.0%.
The Group energetically pursued field preparation and production launches at new fields in Russia and
abroad in 2005. Fields in Timan-Pechora and the Northern Caspian were singled out for special attention.
Group production companies implemented various measures to increase productivity of producing
wells and oil recovery in order to meet oil production targets in 2005.
Subsidiaries and affiliates of the Group carried out production at 343 fields in 2005. Development
began at eight new oil fields: Dubravnoye and Rechnoye (Volga); Solovatovskoye, Chaikinskoye and
Oil Production,
million tonnes
New Fields Put
into Operation, fields
Production Drilling,
thousand meters
95
15
14
1,500
1,453
90
86.2
90.2
10
9
1,400
1,345
85
7
1,300
1,253
80
80.2
5
1,200
75
2003
2004
2005
0
2003
2004
2005
1,100
2003
2004
2005
* In accordance with US GAAP, including production by subsidiaries and share of production by affiliates.
30