ANNUAL REPORT 2005 - Lukoil

ENERGY-SAVING TECHNOLOGIES
Economies in 2005 thanks to the Company's energy-saving program were 344 million kWh of electrical
energy, 43,000 Gcal of heat energy and 7,500 tonnes of heating fuel. Total value of these savings
is $12.7 million.
Company subsidiaries Urayneftegaz, Lukoil-Western Siberia, LUKOIL-Nizhnevolzhskneft, LUKOIL-
Kaliningradmorneft, LUKOIL-Komi, Permneftegazpererabotka (Perm Gas-processing Plant) and
LUKOIL-Sever generated 147.9 million kWh of electricity at their own generating facilities, which is
equal to 1.6% of total electricity consumption by the Company in production.
TECHNOLOGY AND INNOVATION
Automated metering systems, which are now being installed at all Company subsidiaries on the basis
of equipment supplied by ABB Automation, will reduce energy costs by 3–5% thanks to more accurate
measurement of energy consumption and use of differences between peak and off-peak tariffs.
In 2005 automated metering systems were fully deployed by LUKOIL-Western Siberia, LUKOIL-Perm,
LUKOIL-Nizhnevolzhskneft and Permneftegazpererabotka. The Company has thus achieved high-quality
metering of electricity and switched to a peak-and-off-peak tariff regime, as well as making necessary
technical preparations for subsidiaries to start using Russia's new wholesale electricity market.
INFORMATION TECHNOLOGIES
The Company has been working since 2001 on installation of an integrated management system
based on SAP R/3 software. The system will support management decision-making and enable automated
management accounting inside the Company. The system was in industrial use in 2005 at oil
& gas production companies (LUKOIL-Perm, LUKOIL-Komi), oil refiners (the Perm and Burgas
Refineries), and the marketing arm, LITASCO. Preparations are being made for further extension of the
system at other LUKOIL companies, which work in these sectors, and in the parent Company.
Computerized management has thus reached all spheres of Company business: production, oil & gas
refining and marketing.
LUKOIL carried out work on modernization of its information protection system in 2005 and launched
the first stage of its system for centralized monitoring of information resources. A program for smooth
running of LUKOIL business was drawn up in accordance with the Company's plan of measures for
IT development.
In order to achieve well-balanced management of Company business, there are mid-term plans to
move away from the current model of separate projects for separate business segments towards a
global integrated management system and global monitoring of IT infrastructure.
61