ANNUAL REPORT 2005 - Lukoil

up to 200,000 tonnes of caustic soda. Cost of the project is $100 million and commissioning is scheduled
for 2007.
The Company is considering installation of a new polyvinyl chloride production facility with 300,000
tonnes annual capacity at Karpatneftekhim. Integration of such a facility with Karpatneftekhim's
monomer vinyl chloride production would significantly increase overall production efficiency.
One of LUKOIL's most ambitious projects for coming years is construction of the Caspian Gas-chemical
complex, which will process natural gas and gas condensate, produced by LUKOIL on the Caspian Sea
shelf. The project is aimed at increasing value added by deeper refining of gas, efficient chemical processing
of ethane, natural gas liquids and condensate, and complex refining of natural gas and its components
to produce basic organic synthesis products, polyethylene, polypropylene and other petrochemicals. A feasibility
study for investment in construction of key facilities of the complex is to be carried out in 2006.
REFINING, PETROCHEMICALS AND MARKETING
PETROLEUM PRODUCT MARKETING
The Company's marketing network extends to 18 countries: Russia, near-abroad and European countries
(Azerbaijan, Belarus, Georgia, Moldova, Ukraine, Bulgaria, Hungary, Finland, Estonia, Latvia, Lithuania,
Poland, Serbia, Romania, Macedonia, Cyprus, Turkey), and the USA. The network includes 198 tank
farms with reservoir capacity of 3.03 million cubic meters and 5,830 filling stations (including franchises).
Retail sales increased significantly in 2005: the Company sold 10.7 million tonnes of fuel at its own
filling stations, which was 29.7% more than in 2004. The growth was due to expansion on the retail
market and to increase of average sales per filling station.
LUKOIL invested $907 million in its marketing business in 2005. The money was mainly spent on
acquisition and building of 643 new filling stations and upgrading of 232 stations.
The Company exported 16.6 million tonnes of petroleum products to the near-abroad and other countries
in 2005, including 0.59 million tonnes of lubricants. Most export deliveries of petroleum products
are made by rail: 75.5% of petroleum product deliveries were by rail in 2005.
Structure of Petroleum Product Sales
(wholesale and retail, 2005)
Baltics 2.8%
Near-abroad
countries 6.8%
Russia 41.9%
Europe 16.8%
Turkey 1.0%
Filling Station Network
(owned, leased and franchises)
as of 1 January, 2006
7,000
6,000
5,000
4,000
3,000
2,000
4,599
1,325
1,542
5,405
2,035
1,659
5,830
1,965
2,171
Average Daily Sales
of Petroleum Products
per Filling Station,
tonnes/day
8
6
4
2
5.2
6.3
7.0
USA 30.7%
1,000
0
2003
1,732
2004
1,711
2005
1,694
0
2003
2004
2005
USA
Europe and near-abroad countries
Russia
53