ANNUAL REPORT 2005 - Lukoil

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OIL DELIVERIES Growth of export duties and rises in domestic oil prices made oil exports less attractive in 2005. This freed more crude oil volumes for supply to oil refineries owned by the Group in Russia and for processing at third-party Russian refineries. The Group refined 38.9 million tonnes of oil in Russia in 2005 compared with 35.6 million tonnes in 2004. In addition, the Group sold 0.7 million tonnes of oil in Russia in 2005, which is almost 60% less than in 2004. Purchases of oil by the Group inside Russia were 1.5 million tonnes in 2005 (2.8 million tonnes in 2004). The gain from quick reaction by the Group to increased efficiency of oil supplies to the domestic market was about $150 million. Export of oil by LUKOIL subsidiaries (including oil bought from other producers) declined by 1% compared with 2004 to 45.8 million tonnes, of which 40.1 million tonnes were exported to far-abroad countries and 5.7 million tonnes to the near-abroad countries. Oil deliveries to far-abroad countries via the Druzhba oil pipeline grew by 21% compared with 2004 to 16.2 million tonnes. Most exports in 2005 were via the Transneft transport system, equalling to 38.5 million tonnes (1% less than in 2004). LUKOIL also used alternative export schemes in 2005, including its own oil refinery infrastructure. Use of these schemes enabled export of 7.3 million tonnes of oil in 2005, which is 1.4% less than in 2004. Increased attractiveness of oil deliveries to the domestic market led to considerable reduction of deliveries using the Company's own refinery infrastructure and Transneft loading racks. One aspect of this was gradual reduction of monthly oil deliveries to China from 250,000 tonnes to zero. Export deliveries via the port of Vysotsk, which were 385,000 tonnes per month in April–May, were reduced to 200,000 tonnes in June and were suspended from August 2005. Export crude deliveries using Company refinery infrastructure and Transneft loading racks were completely halted at the end of 2005 due to low efficiency. As a result these supplies were only 4.5 million tonnes in 2005, which is 12.7% less than in the previous year. 13.4 40 OIL EXPORTS (million tonnes)
ANNUAL REPORT, 2005 Main oil export routes of LUKOIL Group Murmansk Vitino Varandey Vysotsk Primorsk Butinge Svetly Poland Germany Czech Republic Slovakia Hungary Odessa Novorossiysk Tuapse Work was carried out in 2005 to increase efficiency of pipeline exports of crude oil. Contract price increases of up to 30 cents per barrel were achieved on some export routes, giving extra revenues of about $25 million. A more efficient pricing formula for deliveries to the Mazeikiu Refinery in Lithuania, negotiated at the start of 2005, led to increase of export deliveries to that Refinery by 330% in 2005 to 2.4 million tonnes. Using its quota as a shareholder of the Caspian Pipeline Consortium (CPC) the Company continued deliveries of its own Western Siberian and Lower Volga crude through the CPC in 2005 for export via the South Ozereyevka terminal. Deliveries were 1.4 million tonnes, which is 9 times more than in 2004. LUKOIL also continued to export its shares of production at the Karachaganak, Kumkol and Tengiz fields in Kazakhstan through the CPC. Deliveries of oil to foreign refineries of LUKOIL Group grew significantly compared with 2004 due to re-commissioning of the Petrotel-LUKOIL Refinery in Romania after a reconstruction. In total the Group refined 11.2 million tonnes of oil outside Russia (including processing of its Oil Exports, oil at refineries not owned by the Group), compared with 9.4 million tonnes million tonnes in 2004. The Group sold 45.9 million tonnes of oil on international markets 50 46.3 (including the near-abroad countries) in 2005, which is equal to the level of 45.8 2004. Oil purchases on international markets were 9.4 million tonnes. 40 38.1 30 20 10 Export delivery arrangements via the Black Sea to Group refineries outside Russia were improved by creation of a unified system for monitoring of available tonnage and refinery needs. The system enables monthly freight cost savings of about $1 million for the Group. 0 2003 2004 2005 Thus, total oil deliveries by LUKOIL Group were 96.7 million tonnes in 2005. 42
Page 1 and 2: ANNUAL REPORT 2005
Page 3 and 4: ANNUAL REPORT, 2005 ADDRESS TO SHAR
Page 5 and 6: ANNUAL REPORT, 2005 LUKOIL signific
Page 7 and 8: LUKOIL IS ONE OF THE MAJOR INTERNAT
Page 9 and 10: The Company buys 15 filling station
Page 11 and 12: August The first stage of a coke ca
Page 13 and 14: LUKOIL completes eradication of the
Page 15 and 16: 289 filling stations and 132 diesel
Page 17 and 18: ANNUAL REPORT, 2005 LUKOIL is reali
Page 19 and 20: ANNUAL REPORT, 2005 GEOLOGICAL EXPL
Page 21 and 22: ANNUAL REPORT, 2005 Russia Total ex
Page 23 and 24: ANNUAL REPORT, 2005 Western Siberia
Page 25 and 26: ANNUAL REPORT, 2005 In 2005 LUKOIL
Page 27 and 28: ANNUAL REPORT, 2005 Distribution of
Page 29 and 30: ANNUAL REPORT, 2005 LICENSING The C
Page 31 and 32: ANNUAL REPORT, 2005 increased by 1.
Page 33 and 34: ANNUAL REPORT, 2005 Creation of the
Page 35 and 36: ANNUAL REPORT, 2005 Gas Production
Page 37: KAZAKHSTAN Kumkol 50% LUKOIL INTERN
Page 41 and 42: 47.6 REFINING, PETROCHEMICALS AND M
Page 43 and 44: Russia Growth of export duties in 2
Page 45 and 46: The catalytic reforming unit was ov
Page 47 and 48: GAS PROCESSING The Company's gas-pr
Page 49 and 50: up to 200,000 tonnes of caustic sod
Page 51 and 52: LUKOIL bought share stakes in 2005,
Page 53 and 54: Trading with third parties LITASCO
Page 55 and 56: ANNUAL REPORT, 2005 Effect from EOR
Page 57 and 58: TRADE BALANCE OF LUKOIL SUBSIDIARIE
Page 59 and 60: ANNUAL REPORT, 2005 Work by LUKOIL
Page 61 and 62: ANNUAL REPORT, 2005 management of t
Page 63 and 64: ANNUAL REPORT, 2005 as investments
Page 65 and 66: ANNUAL REPORT, 2005 AA 1000 standar
Page 67 and 68: ANNUAL REPORT, 2005 took part in cr
Page 69 and 70: CORPORATE GOVERNANCE The Company vi
Page 71 and 72: THE MARKET FOR COMPANY SECURITIES R
Page 73 and 74: than in the first quarter of the ye
Page 75 and 76: Alexander Shokhin Independent Direc
Page 77 and 78: Vagit Sharifov Vice-President, Head
Page 79 and 80: The general meeting of shareholders
Page 81 and 82: the Group's organizations and struc
Page 83 and 84: ANNUAL REPORT, 2005 Projects of LUK
Page 85 and 86: ANNUAL REPORT, 2005 Fields and lice
Page 87 and 88: ANNUAL REPORT, 2005 erves were not
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ANNUAL REPORT, 2005 The company's r
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FINANCIAL ACCOUNTS MANAGEMENT'S DIS
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FINANCIAL ACCOUNTS Strategic Partne
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FINANCIAL ACCOUNTS The table below
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FINANCIAL ACCOUNTS The mineral extr
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FINANCIAL ACCOUNTS lack refining ca
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FINANCIAL ACCOUNTS YEAR ENDED DECEM
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FINANCIAL ACCOUNTS 2005 2004 Realiz
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FINANCIAL ACCOUNTS Operating expens
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FINANCIAL ACCOUNTS Excise and expor
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FINANCIAL ACCOUNTS YEAR ENDED DECEM
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FINANCIAL ACCOUNTS Sales revenue Sa
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FINANCIAL ACCOUNTS Wholesale of ref
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FINANCIAL ACCOUNTS The increase in
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FINANCIAL ACCOUNTS Analysis of capi
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FINANCIAL ACCOUNTS GUARANTEES, OFF-
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FINANCIAL ACCOUNTS ing filed by the
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FINANCIAL ACCOUNTS CRITICAL ACCOUNT
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FINANCIAL ACCOUNTS CONSOLIDATED FIN
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FINANCIAL ACCOUNTS OAO LUKOIL Conso
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FINANCIAL ACCOUNTS OAO LUKOIL Conso
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FINANCIAL ACCOUNTS OAO LUKOIL Notes
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FINANCIAL ACCOUNTS Property, plant
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FINANCIAL ACCOUNTS found a sufficie
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FINANCIAL ACCOUNTS Investments in "
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FINANCIAL ACCOUNTS members of the G
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FINANCIAL ACCOUNTS Russian ruble bo
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FINANCIAL ACCOUNTS The following ta
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FINANCIAL ACCOUNTS The real returns
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FINANCIAL ACCOUNTS The Company's ne
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FINANCIAL ACCOUNTS In January 2005,
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FINANCIAL ACCOUNTS Environmental li
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FINANCIAL ACCOUNTS NOTE 22. COMPENS
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FINANCIAL ACCOUNTS Geographical seg
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FINANCIAL ACCOUNTS OAO LUKOIL Suppl
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FINANCIAL ACCOUNTS III. Results of
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FINANCIAL ACCOUNTS Estimated net pr
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FINANCIAL ACCOUNTS develop and prod
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FINANCIAL ACCOUNTS Group's share in
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FINANCIAL ACCOUNTS and the Governme
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FINANCIAL ACCOUNTS A corporate hold
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ANNUAL REPORT, 2005 REFERENCE INFOR
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ANNUAL REPORT 2005 - Lukoil

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