ANALYST DATABOOK 2009 · Oil reserves replacement ratio, % 221 99 121 73 70 (79) Oil reserves to...

ANALYST DATABOOK 2009

1

CONTENTS

LUKOIL in Russia and the world ..................................................................................................................2

Exploration and production

Geological exploration ................................................................................................................................4

Oil reserves ................................................................................................................................................6

Gas reserves ..............................................................................................................................................8

Hydrocarbon reserves ..............................................................................................................................10

Field development ....................................................................................................................................12

Oil production ..........................................................................................................................................17

Gas production..........................................................................................................................................20

Hydrocarbon production ..........................................................................................................................22

Major fields of LUKOIL Group in Russia ..................................................................................................23

International projects of LUKOIL Group ..................................................................................................31

Refining and gas processing

Oil refining ................................................................................................................................................33

Gas processing ........................................................................................................................................44

Petrochemicals ........................................................................................................................................45

Marketing

Marketing of oil, petroleum products and petrochemicals ......................................................................47

Trade balance of LUKOIL subsidiaries ......................................................................................................50

Finances

Company shares ......................................................................................................................................52

Macroeconomic and tax environment ......................................................................................................56

Consolidated financial statements............................................................................................................58

Financial ratios ..........................................................................................................................................63

Glossary ........................................................................................................................................................72

Reference information ................................................................................................................................74

LUKOIL IN RUSSIA AND THE WORLD


2

RUSSIA

USA

Venezuela

Columbia

Finland

Belarus

Estonia

Latvia

Litva

Ukraine

Poland

Hungary

Moldova

Serbia

Romania

Bulgaria

Turkey

Cyprus

Czech Republic

Slovakia

Belgium

Macedonia

Kazakhstan

Uzbekistan

Azerbaijan

Georgia

Egypt

Iraq

SaudiArabia

Cote d’Ivoire

Ghana

Luxemburg

Montenegro

Croatia

Italy

Exploration

Production andpreparation for production

Refining

Retail marketing

Petrochemistry

Power industry

Share of LUKOIL Group in the global oil & gas industry, %

2004 2005 2006 2007 2008

Proved oil reserves 1.32 1.32 1.28 1.25 1.15

Proved gas reserves 0.40 0.41 0.43 0.45 0.45

Proved hydrocarbon reserves 0.90 0.91 0.90 0.88 0.82

Oil production 2.14 2.20 2.32 2.35 2.29

Gas production 0.24 0.27 0.56 0.56 0.63

Hydrocarbon production 1.48 1.52 1.69 1.70 1.68

Refining capacities 1.38 1.37 1.35 1.34 1.51

Refinery throughputs 1.20 1.28 1.31 1.39 1.50

Share of Russian entities of LUKOIL Group in the Russian oil & gas industry, %

2004 2005 2006 2007 2008

Proved oil reserves 20.2 20.0 19.4 18.9 18.3

Proved gas reserves 1.4 1.4 1.5 1.5 1.5

Proved hydrocarbon reserves 5.7 5.7 5.7 5.7 5.3

Oil production wells 17.0 17.4 17.4 17.5 17.7

Oil production 18.03 18.36 18.64 18.54 18.41

Gas production 0.79 0.89 2.14 2.09 2.14

Hydrocarbon production 8.98 9.27 10.06 10.09 10.14

Oil exports 20.75 18.94 17.92 16.66 16.52

Refining capacities 15.6 15.4 16.2 16.2 16.2

Refinery throughputs 18.32 18.05 18.05 18.69 18.75

Petroleum product exports 17.42 17.21 20.04 22.35 22.36

LUKOIL Group activities in Russia

LUKOIL IN RUSSIA AND THE WORLD

3

1

Comparison of LUKOIL Group indicators in Russia with national averages

2004 2005 2006 2007 2008

Flow rate of oil wells, tons per day

LUKOIL 10.7 11.1 11.2 11.0 10.5

National average 10.3 10.4 10.3 10.2 9.9

Share of idle wells in total oil production wells, %

LUKOIL 17.9 16.8 15.4 15.3 14.7


Watercut of oil wells, %

LUKOIL 76.4 77.8 79.6 80.9 82.2


Depth of refining, %

LUKOIL 75.4 77.5 76.2 74.0 76.0


Light products yield, %

LUKOIL 50.2 51.1 50.2 49.9 50.4


Share of high!octane gasoline in overall productionof motor gasoline, %

LUKOIL 61.4 69.0 76.6 83.5 87.0


Exploration and productionregions

Refineries

Gas!processing plants

Petrochemical plants

Marketing regions

Moscow


4

GEOLOGICAL EXPLORATION

Geological exploration

2004 2005 2006 2007 20082D seismic prospecting, km 9,752 9,787 10,573 7,736 6,266

3D seismic prospecting, km2 2,153 5,686 3,118 5,451 2,973

VSP*, wells 45 40 33 30 15

Geo!electrics, km 2,488 2,381 4,030 2,513 3,603

*Vertical seismic profiling.

Exploration drilling by regions, th. meters

2004 2005 2006 2007 2008 Total 118 131 162 143 150

Russia 111 119 139 130 123

Western Siberia 44 44 60 54 63

Urals 11 11 9 9 9

Volga 17 23 29 31 17

including Caspian 0 2 2 4 0

Timan!Pechora 24 26 27 18 18

Bolshekhetskaya Depression 4 6 4 6 4

Other 11 9 10 12 12International 7 12 23 13 27

Number and average depth of exploration wells drilled in Russia

2004 2005 2006 2007 2008Number of wells 47 28 40 49 41

Average depth, meters 2,541 2,548 2,417 2,797 2,553

Number of newly discovered fields and strata at existing fields

2004 2005 2006 2007 2008Fields 13 5 10 7 8

Oil (including oil, gas and condensate) 12 5 9 7 8

Gas 0 0 1 0 0

Gas condensate 1 0 0 0 0Strata 10 11 15 17 18

Oil 10 11 15 13 18

Gas 0 0 0 0 0

Gas condensate 0 0 0 4 0

Proved reserve extensions and discoveries, mln boe2004 2005 2006 2007 2008

Oil 624 506 551 518 529

Gas 16 170 66 141 72

Hydrocarbons 640 676 617 659 601

0 1,000 2,000 3,000 4,000 5,000

Geo!electrics, km

3,6032008

2007

2004

2005

2006 4,030

2,381

2,488

2,513

0 2,000 4,000 6,000

3,118

5,686

2,153

3D seismic prospecting, km2

5,451

2004

2005

2006

2007

2008 2,973

0 3,000 6,000 9,000 12,000

2004

2005

2006 10,573

9,787

9,752

2007

2D seismic prospecting, km

7,736

2008 6,266

2004

2005

2006

2007

Proved hydrocarbon reserve extensions and discoveries, mln boe

2008

0 200 400 600 800

617

676

640

659

601

Proved reserve replacement by extensions and discoveries, %

2004 2005 2006* 2007 2008

Oil 98 76 78 73 75

Gas 55 510 71 146 63

Hydrocarbons 96 97 77 81 74* Starting from 2006 reserves are calculated on the basis of total gas production including losses, own use and reinjection.

Exploration expenses, mln USD

2004 2005 2006 2007 2008

Total expenses 309 426 479 558 679

Subsidiaries 306 423 468 546 670

Russia 225 252 276 366 313

International 81 171 192 180 357

Affiliates 3 3 11 12 9

Russia 3 3 10 12 9


Finding & development costs of LUKOIL Group subsidiaries

2002–2004 2003–2005 2004–2006 2005–2007 2006–2008

Reserve extensions anddiscoveries, mln barrels 2,258 1,720 1,898 1,899 1,824

Exploration expenses, mln USD 651 985 1,197 1,437 1,684

Acquisition of unproved reserves, mln USD 395 1,444 1,905 2,347 1,341

Development expenses, mln USD 4,833 6,006 8,973 13,547 18,201

F&D costs, USD per barrel 2.60 4.90 6.36 9.13 11.64

EXPLORATION AND PRODUCTION

5

Finding anddevelopment costs Proved reserve extensions and discoveries

Exploration expenses + Development expenses + Acquisition of unproved reserves=

2

0

20

40

60

80

100

2004 2008200720062005

12.0%

11.3%

2.7%

6.0%

42.0%

18.0%

8.0%

20.4%

14.4%

9.3%

5.9%

3.4%

37.3%

19.6%

17.9%

4.3%

8.6%

9.3%

33.4%

9.1%

7.1%

16.8%

17.9%

2.3%

5.4%

37.2%

13.9%

6.5%

12.7%

21.3%

4.2%

6.0%

37.7%

9.3%

8.8%

Western Siberia

Other

BolshekhetsayaDepression

Urals

International

Volga

Timan!Pechora

Exploration drilling by regions, %


6

OIL RESERVES

0

20

40

60

80

100

20082007200620052004

54.8%

21.3%

13.7%

1.6%

3.1%4.2%

1.3%

53.9%

20.2%

14.4%

1.6%

4.1%4.3%

1.5%

52.7%

24.7%

13.3%

1.7%

53.4%

24.4%

13.3%

1.6%

53.2%

23.8%

13.5%

1.6%

3.0%3.2%

1.4%3.1%3.0%

1.2%3.8%2.9%

1.2%

53.8%

22.0%

13.3%

1.5%

3.8%4.4%

1.2%

Western Siberia

Urals

Timan!Pechora

Other


International

Volga (inludingNorthern Caspian)

Oil reserves of LUKOIL Group (end of year), mln barrels

2003 2004 2005 2006 2007 2008Proved 15,977 15,972 16,114 15,927 15,715 14,458

Developed 10,207 10,651 10,583 10,176 10,059 9,170Undeveloped 5,770 5,321 5,531 5,751 5,656 5,288

Probable 7,238 7,424 8,869 8,767 8,679 8,083Possible 3,326 3,269 4,336 4,275 4,446 3,333Total 26,541 26,665 29,319 28,969 28,840 25,874

Proved oil reserves of LUKOIL Group (end of year), mln barrels

2003 2004 2005 2006 2007 2008Total 15,977 15,972 16,114 15,927 15,715 14,458Russia 15,506 15,485 15,500 15,319 15,220 13,866

Western Siberia 8,421 8,536 8,572 8,574 8,616 7,798Urals 2,124 2,130 2,170 2,112 2,151 2,082Volga 516 478 468 697 657 623

including Caspian 185 184 183 448 407 376Timan!Pechora 3,953 3,892 3,833 3,496 3,346 2,912Bolshekhetskaya Depression 216 195 203 197 203 219Other 276 254 254 243 247 232

International 471 487 614 608 495 592

Oil reserves replacement ratio, % 221 99 121 73 70 (79)

Oil reserves to production ratio, years 27.0 25.2 24.3 22.7 22.0 20.6

Proved oil reserves of LUKOIL Group by regions, %

7

2

Proved oil reserves in international projects (end of year), mln barrels2003 2004 2005 2006 2007 2008

AzerbaijanShakh Deniz 7 15 11 10 11 18

KazakhstanTengiz and Korolevskoye 106 112 118 120 117 120Kumkol 107 111 89 79 78 68Karachaganak 232 231 208 173 157 246Arman – – 3 4 2 1Karakuduk – – 38 50 34 33North Buzachi – – 42 80 41 35Kazakhoil!Aktobe – – 89 76 35 32

EgyptMeleiha 4 1 3 2 3 4WEEM 15 13 7 6 5 7

UzbekistanKandym – Khauzak – Shady – 4 6 8 6 10South!West Gissar – – – – – 17

ColombiaCondor – – – – 6 1

Total 471 487 614 608 495 592

Factors of change in proved oil reserves, mln barrels2004 2005 2006 2007 2008

Reserves at start of year 15,977 15,972 16,114 15,927 15,715Extensions and discoveries 624 506 551 518 529Production (635) (664) (703) (713) (703)Acquisition and sale of reserves (4) 320 216 (31) 41Revision of previous estimates 10 (20) (251) 14 (1,124)

Reserves at end of year 15,972 16,114 15,927 15,715 14,458

Proved oil reserves ininternational projects (31.12.2008)

Arman (0.2%)

Kumkol(11.5%)

Tengiz and Korolevskoye(20.3%)

Karachaganak(41.6%)

Karakuduk (5.6%)

NorthBuzachi (5.9%)

Kazakhoil!Aktobe (5.4%)

Meleiha (0.7%)

WEEM (1.2%)

Kandym – Khauzak – Shady (1.7%)

Shakh Deniz (3.0%)Condor (0.2%)

South!West Gissar (2.9%)

24

26

28

30

2004 2005 2006 2007 2008

Total oil reserves of LUKOIL Groupby all categories*, bln barrels

12

13

14

17

16

15

2004 2005 2006 2007 2008

450

500

550

650

2004 2005 2006 2007 2008

600

Proved oil reserves of LUKOIL Group, bln barrels

Proved oil reserves in international projects, mln barrels

* Proved, probable and possible.



8

GAS RESERVES

Gas reserves of LUKOIL Group (end of year), bcf2003 2004 2005 2006 2007 2008

Proved 24,473 24,598 25,298 26,597 27,921 29,253

Developed 2,914 4,958 6,089 7,480 8,055 7,919

Undeveloped 21,559 19,640 19,209 19,117 19,866 21,334

Probable 14,616 15,537 20,587 21,436 21,048 22,103

Possible 3,548 5,103 10,240 10,479 11,134 11,694

Total 42,637 45,238 56,125 58,512 60,103 63,050

Proved gas reserves of LUKOIL Group (end of year), bcf2003 2004 2005 2006 2007 2008

Total 24,473 24,598 25,298 26,597 27,921 29,253Russia 22,167 21,382 21,453 22,155 22,853 22,281

Western Siberia 1,284 1,414 1,698 1,999 2,163 1,726

Urals 568 667 607 619 471 496

Volga 5,926 5,913 5,783 6,031 6,255 6,278

including Caspian 5,763 5,736 5,603 5,786 6,057 6,060

Timan!Pechora 577 463 176 708 709 631

Bolshekhetskaya Depression 13,806 12,919 13,185 12,788 13,243 13,138

Other 6 6 4 10 12 12

International 2,306 3,216 3,845 4,442 5,068 6,972

Gas reserves replacementratio, % 332 172 450 330 329 294

Gas reserves to production ratio, years 184.0 141.4 126.5 47.1 48.2 42.6

0

20

40

60

80

100

20082007200620052004

44.9%

21.5%

23.8%

5.9%

1.7%2.2%

47.4%

22.4%

18.2%

7.8%

1.7%2.5%

56.4%

24.2%

9.4%

5.3%

2.3%2.4%

52.5%

24.0%

13.1%

5.8%

2.7%1.9%

52.1%

22.9%

15.2%

6.7%

2.4%0.7%

48.1%

22.7%

16.7%

7.5%

2.3%2.7%

Western Siberia

Urals

Timan!Pechora


International


Proved gas reserves of LUKOIL Group by regions, %

9

2

Proved gas reserves in international projects (end of year), bcf2003 2004 2005 2006 2007 2008

Azerbaijan

Shakh Deniz 125 338 249 314 476 532

Kazakhstan

Tengiz and Korolevskoye 151 188 177 154 151 152

Karachaganak 2,030 1,624 1,441 1,203 1,137 1,861

Kumkol 0 0 0 13 14 13

Uzbekistan

Kandym – Khauzak – Shady – 1,066 1,978 2,758 3,290 3,019

South!West Gissar – – – – – 1,395

Total 2,306 3,216 3,845 4,442 5,068 6,972

Proved gas reserves ininternational projects (31.12.2008)

Karachaganak (26,7%)

Tengiz and Korolevskoye (2.2%)

Shakh Deniz (7.6%)

Kandym – Khauzak – Shady (43.3%)

Kumkol (0.2%)


Factors of change in proved gas reserves, bcf2004 2005 2006* 2007 2008

Reserves at start of year 24,473 24,598 25,298 26,597 27,921Extensions and discoveries 95 1,020 399 844 435Production (174) (200) (565) (579) (686)Acquisition and sale of reserves 1,171 2 (2) 5 1,399Revision of previous estimates (967) (122) 1,467 1,054 184


200430

60

70

2005 2006 2007 2008

Total gas reserves of LUKOIL Groupby all categories**, tcf

40

50

200420

22

26

30

2005 2006 2007 2008

28

24

20042

8

6

2005 2006 2007 2008

4

Proved gas reserves of LUKOIL Group, tcf

Proved gas reserves in international projects, tcf

* Starting from 2006 reserves are calculated on the basis of total gas production including losses, own use and reinjection.


** Proved, probable and possible.


10

HYDROCARBON RESERVES

Hydrocarbon reserves of LUKOIL Group (end of year), mln boe2003 2004 2005 2006 2007 2008

Proved 20,056 20,072 20,330 20,360 20,369 19,334

Developed 10,693 11,477 11,598 11,423 11,402 10,490

Undeveloped 9,363 8,595 8,732 8,937 8,967 8,844

Probable 9,674 10,014 12,300 12,340 12,187 11,767

Possible 3,917 4,119 6,043 6,022 6,301 5,282

Total 33,647 34,205 38,673 38,722 38,857 36,383

Proved hydrocarbon reserves of LUKOIL Group (end of year), mln boe

2003 2004 2005 2006 2007 2008

Total 20,056 20,072 20,330 20,360 20,369 19,334

Russia 19,201 19,049 19,075 19,010 19,030 17,580

Western Siberia 8,635 8,772 8,855 8,907 8,977 8,085

Urals 2,219 2,241 2,271 2,215 2,230 2,165

Volga 1,504 1,464 1,432 1,702 1,699 1,670

including Caspian 1,146 1,140 1,117 1,412 1,417 1,386

Timan!Pechora 4,049 3,969 3,862 3,614 3,465 3,017

Bolshekhetskaya Depression 2,517 2,348 2,400 2,327 2,410 2,409

Other 277 255 255 245 249 234

International 855 1,023 1,255 1,350 1,339 1,754

Hydrocarbon reserves replacementratio, % 226 102 137 104 101 (27)

Hydrocarbon reserves to productionratio, years 32.7 30.2 29.2 25.5 25.2 23.7

0

20

40

60

80

100

20082007200620052004

41.8%

15.6%

12.5%

11.2%

8.6%

9.1%1.2%

44.1%

17.0%

11.8%

11.0%

8.3%

6.6%1.2%

43.0%

20.2%

12.5%

11.1%

7.5%

4.3%1.4%

43.7%

19.8%

11.7%

11.1%

7.3%

5.1%1.3%

43.6%

19.0%

11.8%

11.2%

7.0%

6.2%1.2%

43.7%

17.8%

11.4%

10.9%

8.4%

6.6%1.2%

Western Siberia

Urals

Timan!Pechora

Other


International


Proved hydrocarbon reserves of LUKOIL Group by regions, %

11

2

Proved hydrocarbon reserves in international projects (end of year), mln boe2003 2004 2005 2006 2007 2008

AzerbaijanShakh Deniz 28 71 53 63 90 107

KazakhstanTengiz and Korolevskoye 131 143 147 146 142 145Kumkol 107 111 89 81 80 70Karachaganak 570 502 448 374 347 556Arman – – 3 4 2 1Karakuduk – – 38 50 34 33North Buzachi – – 42 80 41 35Kazakhoil!Aktobe – – 89 76 35 32

EgyptMeleiha 4 1 3 2 3 4WEEM 15 13 7 6 5 7

UzbekistanKandym – Khauzak – Shady – 182 336 468 554 513South!West Gissar – – – – – 250

ColombiaCondor – – – – 6 1

Total 855 1,023 1,255 1,350 1,339 1,754

Factors of change in proved hydrocarbon reserves, mln boe2004 2005 2006* 2007 2008

Reserves at start of year 20,056 20,072 20,330 20,360 20,369Extensions and discoveries 640 676 617 659 601Production (665) (697) (797) (809) (817)Acquisition and sale of reserves 192 320 217 (31) 274Revision of previous estimates (151) (41) (7) 190 (1,093)


Proved hydrocarbon reserves ininternational projects (31.12.2008)

Arman (0.1%)

Kumkol(4.0%)

Tengiz and Korolevskoye(8.3%)

Karachaganak(31.7%)

Karakuduk (1.9%)North Buzachi (2.0%)

Kazakhoil!Aktobe (1.8%)Meleiha (0.2%)

WEEM(0.4%)

Kandym – Khauzak – Shady

(29.2%)

Shakh Deniz (6.1%)Condor (0.1%)


200425

30

40

2005 2006 2007 2008

35

Total hydrocarbon reserves of LUKOIL Group by all categories**, bln boe21

19

20

2004 2005 2006 2007 2008

2004800

1,000

1,800

2005 2006 2007 2008

1,400

1,200

1,600

Proved hydrocarbon reserves of LUKOIL Group, bln b!e

* Starting from 2006 reserves are calculated on the basis of total gas production including losses, own use and reinjection.

Proved hydrocarbon reserves in international projects, mln boe


** Proved, probable and possible.


12

0

20

40

100

60

80

20072003 2004 2005 2006 2008

Other

Liquidated wells

Injection wells

Temporarily closedwells

Steam injection wells

Test and pressureobservation wells

Oil wells

Gas wells

Water wells

Development expenses, mln USD

2004 2005 2006 2007 2008

Total 2,100 2,619 4,652 6,660 7,288

Subsidiaries 1,983 2,495 4,495 6,557 7,149

Russia 1,875 2,235 3,901 5,887 6,430

International 108 260 594 670 719

Share in affiliates 117 124 157 103 139

FIELD DEVELOPMENT

Structure of drilled wells at oil & gas fields of LUKOIL (end of year), %

59

61

63

62

60

Drilled wells at oil & gas fieldsof LUKOIL Group, th. wells

5820082004 2005 2006 2007

0 3,000 6,000 9,000

4,652

2,619

2,100

Development expenses, mln USD

6,660

2004

2005

2006

2007

2008 7,288

Production drilling, th. meters

0 1,000 2,000 3,000 4,000

2008

2,341

1,453

1,345

3,572

2,9682007

2004

2005

2006

Number of fields put into operation and their reserves (at the end of yearwhen they were put into operation)

2004 2005 2006 2007 2008

Fields 7 9 11 13 11

Reserves (proved, probable and possible), mln boe 1,302 1,618 681 354 1,016

Production drilling by regions, th. meters

2004 2005 2006 2007 2008Total 1,345 1,453 2,341 2,968 3,572

Russia 1,245 1,328 2,122 2,641 2,981Western Siberia 933 1,027 1,716 2,197 2,563Urals 88 88 98 98 137Volga 5 11 7 5 3Timan!Pechora 135 125 248 254 231Bolshekhetskaya Depression 31 33 11 37 0Other 53 44 42 50 47

International 100 125 219 327 591

13

0

20

40

100

60

80

20072003 2004 2005 2006 2008

Other

Liquidated wells



Water wells


Production wells

Injection wells

62

60

58

Drilled wells at oil fields of LUKOIL Group, th. wells

5620082004 2005 2006 2007

200850

150

200

2004 2005 2006 2007

100


Number and average depth of production wells drilled in Russia2004 2005 2006 2007 2008

Number of production wells 459 511 707 941 1,151

Average depth, meters 2,350 2,330 2,652 2,722 2,625

New oil wells put into operation2004 2005 2006 2007 2008

Wells 514 558 945 1,193 1,510

0

20

40

60

80

100

20082007200620052004

Western Siberia

Other


Urals

International

Volga

Timan!Pechora

71.0%

16.6%

3.8%

6.5%

0.7%0.1%1.3%

74.0%

7.4%

10.0%

2.3%6.6%

0.4%

11.0%

3.3%

8.5%

1.3%0.2%

69.4%

8.6%

8.6%

0.8%2.3%

70.6%

6.0%

1.7%3.9% 3.1%

9.3%

10.6%

0.5%

73.3%

4.2%

1.8%0.3%

Drilled wells at oil fields (end of year), %

Production drilling of LUKOIL Group by regions, %

2



14

Oil production wells in use, th. wells

Oil production wells (end of year), wells

2003 2004 2005 2006 2007 2008

Total 27,221 26,936 27,354 27,833 28,468 29,417

Russia 26,812 26,502 26,619 26,965 27,451 28,097

Western Siberia 15,436 15,256 15,417 15,940 16,372 16,797

Urals 6,343 6,142 6,104 6,134 6,255 6,393

Volga 1,114 1,087 1,051 1,001 906 869

Timan!Pechora 3,395 3,447 3,473 3,288 3,286 3,387

Other 524 570 574 602 632 651

International 409 434 735 868 1,017 1,320

Oil production wells in use (end of year), wells

2003 2004 2005 2006 2007 2008

Total 22,172 22,122 22,750 23,490 24,099 25,112

Russia 21,844 21,761 22,150 22,799 23,238 23,964

Western Siberia 12,721 12,802 13,346 13,879 14,337 14,775

Urals 5,582 5,480 5,322 5,298 5,225 5,375

Volga 1,045 982 951 895 790 785

Timan!Pechora 1,990 1,937 1,967 2,133 2,266 2,394

Other 506 560 564 594 620 635

International 328 361 600 691 861 1,148

Share of idle wells in total oil production wells (end of year), %

2003 2004 2005 2006 2007 2008

Total 18.5 17.9 16.8 15.6 15.3 14.6

Russia 18.5 17.9 16.8 15.4 15.3 14.7

Western Siberia 17.6 16.1 13.4 12.9 12.4 12.0

Urals 12.0 10.8 12.8 13.6 16.5 15.9

Volga 6.2 9.7 9.5 10.6 12.8 9.7

Timan!Pechora 41.4 43.8 43.4 35.1 31.0 29.3

Other 3.4 1.8 1.7 1.3 1.9 2.5

International 19.8 16.8 18.4 20.4 15.3 13.0

22

23

26

2007

24

25

20082004 2005 2006

International (5%)

Other (3%)

Volga (3%)

Western Siberia (59%)

Timan!Pechora (9%)

Urals (21%)

Oil production wells in useby regions (31.12.2008)

15

Drilled wells at gas fields (end of year), %

2

Injection wells at oil fields (end of year), wells

2003 2004 2005 2006 2007 2008

Operating wells 7,848 8,007 8,158 8,663 9,064 9,552

Russia 7,780 7,937 8,048 8,501 8,859 9,303

International 68 70 110 162 205 249

Wells under pressure 5,196 5,434 5,769 6,338 6,656 7,047

Russia 5,133 5,365 5,669 6,193 6,471 6,835

International 63 69 100 145 185 212

Share of idle wells, % 33.8 32.1 29.3 26.8 26.6 26.2

Russia 34.0 32.4 29.6 27.1 27.0 26.5

International 7.4 1.4 9.1 10.5 9.8 14.9

Number of steam injection wells at oil fields* (end of year), wells

2003 2004 2005 2006 2007 2008

Wells 73 74 77 137 152 164

* LUKOIL!Komi is the only LUKOIL subsidiary operating steam injection wells.

20081.3

1.4

1.5

1.6

2004 2005 2006 2007

Drilled wells at gas fields of LUKOIL Group, th. wells

Gas production wells (end of year), wells

2003 2004 2005 2006 2007 2008

Total 313 317 365 367 376 387

Russia 254 258 302 295 297 299

Western Siberia 0 0 4 4 5 6

Urals 85 81 74 72 73 73

Volga 122 118 119 123 123 124

Timan!Pechora 47 56 56 35 35 35

Bolshekhetskaya Depression 0 3 49 61 61 61

International 59 59 63 72 79 88

0

20

40

100

60

80

20072003 2004 2005 2006 2008


Liquidated wells


Production wells

Injection wells

Other



16

Gas production wells in use (end of year), wells

2003 2004 2005 2006 2007 2008Total 250 231 239 285 277 278

Russia 213 190 194 239 221 209

Western Siberia 0 0 2 2 1 2

Urals 75 74 73 71 71 71

Volga 97 101 101 104 87 83

Timan!Pechora 41 14 5 1 1 2

Bolshekhetskaya Depression 0 1 13 61 61 51


Gas production wells in use, wells

200

220

300

240

260

280

2007 20082004 2005 2006

Gas production wells in useby regions (31.12.2008)

Timan!Pechora (1%)

International (25%)

BolshekhetskayaDepression (18%)

Volga (30%)

Western Siberia (1%)

Urals (25%)

Share of idle wells in gas production wells (end of year), %

2003 2004 2005 2006 2007 2008

Total 20.1 27.1 34.5 22.3 26.3 28.2

Russia 16.1 26.4 35.8 19.0 25.6 30.1

Western Siberia – – 50.0 50.0 80.0 66.7

Urals 11.8 8.6 1.4 1.4 2.7 2.7

Volga 20.5 14.4 15.1 15.4 29.3 33.1

Timan!Pechora 12.8 75.0 91.1 97.1 97.1 94.3

Bolshekhetskaya Depression – 66.7 73.5 0.0 0.0 16.4

International 37.3 30.5 28.6 36.1 29.1 21.6

Injection wells at gas fields (end of year), wells

2003 2004 2005 2006 2007 2008

Total 34 34 35 35 35 35

Russia 20 20 20 20 20 20


17

OIL PRODUCTION

2

Oil production by LUKOIL Group2004 2005 2006 2007 2008

Th. tons 86,200 90,158 95,235 96,645 95,240

Mln barrels 636 664 703 713 703

Th. tons per day 236 247 261 265 260

Th. barrels per day 1,738 1,820 1,926 1,953 1,921

Oil production by LUKOIL Group, mln barrels

2004 2005 2006 2007 2008

LUKOIL Group production, total 636 664 703 713 703

Subsidiaries 607 634 675 694 684

Russia 596 619 648 668 660


Share in production by affiliates 29 30 28 19 19

Oil production by regions, th. tons

2004 2005 2006 2007 2008

LUKOIL Group production, total 86,200 90,158 95,235 96,645 95,240

Russia 82,720 86,277 89,561 91,100 89,945

Western Siberia 56,351 58,469 59,764 59,917 56,187

Urals 10,082 10,307 10,923 11,257 11,625

Volga 3,175 3,210 3,214 3,240 3,263

Timan!Pechora 11,732 12,476 13,601 14,576 16,685

Other 1,380 1,815 2,059 2,110 2,185

International 3,480 3,881 5,674 5,545 5,295

KogalymneftegazLangepasneftegazPokachevneftegaz

Urayneftegaz

YamalneftegazNaryanmarneftegaz

LUKOIL!Komi

LUKOIL!Perm

NizhnevolzhskneftVolgogradneftegaz

KaliningradmorneftProjects in Kazakhstan

Projects in Egypt

Shakh Deniz inAzerbaijan

Kandym – Khauzak – Shadyand South!West Gissar

in Uzbekistan

LUKOIL’s main hydrocarbon production regions



18

0

20

40

60

80

100

20082007200620052004

59.0%

17.5%

12.2%

5.6%

2.3%3.4%

62.0%

13.6%

11.7%

3.7%4.0%

1.6%

15.1%

11.6%

5.7%

2.2%3.4%

65.4%

13.8%

11.4%

2.0%3.6%

64.9%

4.3%

14.3%

11.5%

2.2%3.4%

62.7%

5.9%

Western Siberia

Urals

Timan!Pechora

Other

International

Volga

2004 2005 2006 2007 2008Subsidiaries 82,408 86,193 91,537 94,147 92,846

Russia 81,039 84,180 87,930 90,735 89,646

Western Siberia 55,630 57,345 58,414 59,849 56,187

Urals 10,010 10,234 10,855 11,183 11,548

Volga 2,969 3,001 3,001 3,017 3,041

Timan!Pechora 11,050 11,785 13,601 14,576 16,685

Other 1,380 1,815 2,059 2,110 2,185

International 1,369 2,013 3,607 3,412 3,200

Share in production by affiliates 3,792 3,965 3,698 2,498 2,394

Russia 1,681 2,097 1,631 365 299

Western Siberia 721 1,124 1,350 68 0

Urals 72 73 68 74 77

Volga 206 209 213 223 222


Other 0 0 0 0 0

International 2,111 1,868 2,067 2,133 2,095

Oil production by regions, %

19

2Watercut of Russian oil wells of LUKOIL Group, %

2004 2005 2006 2007 2008

New wells 21.1 22.0 27.4 35.1 32.1

Old wells 77.1 78.5 80.4 83.0 83.1

Total wells 76.4 77.8 79.6 80.9 82.2

Western Siberia 78.7 80.5 82.5 84.1 85.9

Urals 69.7 69.7 68.5 66.6 65.7

Volga 62.7 63.4 62.2 60.0 64.3

Timan!Pechora 71.3 70.5 71.8 72.3 71.4

Other 66.8 62.2 60.8 62.7 64.8

Flow rate of Russian oil wells of LUKOIL Group, tons per day

2004 2005 2006 2007 2008

New wells 44.3 41.9 37.3 33.0 36.1

Old wells 10.4 10.8 10.8 10.6 10.0

Total wells 10.7 11.1 11.2 11.0 10.5

Western Siberia 12.3 12.4 12.3 11.7 10.5

Urals 5.2 5.4 5.8 6.0 6.2

Volga 9.1 9.7 10.3 11.4 10.8

Timan!Pechora 17.5 18.7 18.6 18.4 19.8

Other 7.3 9.2 10.0 10.0 9.7

Average flow rate of LUKOIL oilwells in Russia, tons per day

6 7 8 9 10 11 12

2008

11.2

11.1

10.7

10.5

11.02007

2004

2005

2006

Watercut of LUKOIL wells in Russia, %

10 35 60 85

2008

2004

2005

2006

2007

82.2

79.6

77.8

76.4

80.9

Application of enhanced oil recovery methods and latest technologies

2004 2005 2006 2007 2008

Drilling of horizontal wells 29 41 56 109 112

Average flow rate, tons per day 79.6 125.4 110.4 65.5 58.4

Drilling of sidetracks 63 102 146 188 260

Average increase in flow rate, tons per day 21.9 25.0 25.9 19.2 18.1

Hydrofracturing, wells 583 850 1,002 762 711

Average increase in flow rate, tons per day 15.9 13.7 10.2 8.9 9.4

Additional oil production from application of enhanced oil recovery methods in Russia, mln tons

2004 2005 2006 2007 2008

LUKOIL Group in Russia, total 21.53 22.07 24.19 23.75 22.95

Western Siberia 17.46 17.74 19.16 18.19 16.76

Urals 1.34 1.51 1.84 2.17 2.76

Volga 0.56 0.59 0.57 0.64 0.51

Timan!Pechora 2.00 2.06 2.41 2.69 2.73

Other 0.17 0.17 0.21 0.06 0.19


Marketable gas production by LUKOIL Group*

2004 2005 2006 2007 2008Mcm 4,924 5,635 13,612 13,955 17,020

Bcf 174 200 481 493 601

Mln boe 29.0 33.2 80.1 82.1 100.2

Mcm per day 13.5 15.4 37.3 38.1 46.5

Mcf per day 475.1 545.2 1,317.0 1,350.0 1,642.1

Th. boe per day 79 91 219 225 273

Natural gas production, mcm2004 2005 2006 2007 2008

Total production of natural gas** 1,828 2,628 10,709 10,787 13,888

Production of marketable natural gas* 1,395 1,878 9,821 9,652 12,671including:

Subsidiaries 1,395 1,878 9,821 9,652 12,671

Russia 478 899 8,816 8,161 8,711

Western Siberia 0 0 0 0 0

Bolshekhetskaya Depression 3 433 8,348 7,719 8,313

Urals 326 319 326 322 291

Volga 148 146 141 119 106


Other 0 0 0 0 0

International 917 979 1,005 1,491 3,960


Russia 0 0 0 0 0


Associated petroleum gas production, mcm

Total production of associated petroleum gas** 4,645 4,941 5,258 5,610 5,549

Production of marketable associated petroleum gas* 3,529 3,757 3,791 4,303 4,349including:

Subsidiaries 3,281 3,499 3,576 4,079 4,084

Russia 3,281 3,497 3,576 4,079 4,084

Western Siberia 1,983 2,103 2,089 2,528 2,549

Urals 433 487 527 575 576

Volga 381 398 409 403 426

Timan!Pechora 474 499 542 564 524

Other 10 10 9 9 9



Russia 30 31 31 33 33

International 218 227 184 191 232

Utilization rate of associated petroleum gas, % 79.7 79.1 72.2 69.0 70.4


20

GAS PRODUCTION

* Includes gas for sale, does not include reinjection and own consumption as well as production and transportation losses.** Includes gas for sale, reinjection and own consumption as well as production and transportation losses.

Natural and associated petroleum gas production, mcm

2004 2005 2006 2007 2008

Total production of gas** 6,473 7,569 15,967 16,397 19,437

Production of marketable gas* 4,924 5,635 13,612 13,955 17,020including:

Subsidiaries 4,676 5,377 13,397 13,731 16,755

Russia 3,759 4,396 12,392 12,240 12,795

Western Siberia 1,983 2,103 2,089 2,528 2,549

Bolshekhetskaya Depression 3 433 8,348 7,719 8,313

Urals 759 806 853 897 867

Volga 529 544 550 522 532

Timan!Pechora 475 500 543 565 525

Other 10 10 9 9 9

International 917 981 1,005 1,491 3,960


Russia 30 31 31 33 33

International 218 227 184 191 232

0

20

40

60

80

100

20082007200620052004

48.8%

24.6%

23.1%

15.4%

11.4%

0.2%

15.0%

5.1%3.3%

0.1%

40.3%

9.6%3.1%

0.1%

55.3%

12.1%

18.1%

6.4%

4.0%

0.1%

21.4%

14.3%

0.2%

8.9%

37.3%

10.2%

7.7%

4.0%

8.7%

6.3%

0.1%4.0%

15.3%

4.3%

61.3%Western Siberia

Urals

Timan!Pechora

Other


International

Volga

21

Gas production by regions, %

2




22

HYDROCARBON PRODUCTION

LUKOIL Group hydrocarbon production, mln boe2004 2005 2006 2007 2008

Oil 636 664 703 713 703Gas* 38 45 94 96 114Total production by LUKOIL Group 674 709 797 809 817Total production by LUKOIL Group, th. boe per day 1,842 1,942 2,184 2,218 2,232

Production of marketable hydrocarbons(including marketable gas**) 665 697 783 795 803Production of marketable hydrocarbons,th. boe per day 1,817 1,911 2,145 2,178 2,194

Marketable hydrocarbon production by regions, mln boe2004 2005 2006 2007 2008

Total production by LUKOIL Group 665 697 783 795 803Russia 632 660 733 743 738

Western Siberia 430 444 455 459 431Bolshekhetskaya Depression 0 3 49 45 49Urals 78 80 84 87 90Volga 27 27 28 28 28Timan!Pechora 87 93 102 108 124Other 10 13 15 16 16


Subsidiaries 635 665 754 775 783Russia 619 643 721 740 735



Share in production by affiliates 30 32 29 20 20Russia 13 17 12 3 3



Hydrocarbon lifting costs of LUKOIL Group subsidiaries, USD per boe2004 2005 2006 2007 2008

Total 2.46 2.66 3.08 3.58 4.12Russia 2.44 2.60 3.01 3.55 4.11International 3.52 4.50 4.67 4.16 4.32


23

MAJOR FIELDS OF LUKOIL GROUP IN RUSSIA

2

Oil fields*

Western Siberia2004 2005 2006 2007 2008

Total LUKOIL production of oil in Western Siberia, th. tons 56,351 58,469 59,764 59,917 56,187Oil production from 15 major oil fields ofthe Group in the region, th. tons 44,536 45,543 45,821 44,857 42,249Share, % 79.0 77.9 76.7 74.9 75.2

LUKOIL proved oil reserves in Western Siberia, mln barrels 7,798Proved oil reserves of 15 major oil fieldsof the Group in the region, mln barrels 5,801Share, % 74.4

Tevlinsko"Russkinskoye field2004 2005 2006 2007 2008

Proved oil reserves, mln barrels 1,023

Oil production, th. tons 11,367 11,443 10,382 9,486 8,608

Cumulative oil production, mln tons 102.7 114.2 124.6 134.1 142.7

Total wells 2,088 2,151 2,229 2,297 2,407

Production wells 1,233 1,332 1,383 1,404 1,423

Production wells in use 1,171 1,227 1,281 1,300 1,333

Average flow rate per well, tons per day 26.2 25.6 22.7 20.3 17.9

Watercut, % 45.4 54.9 64.2 70.4 75.4

Vat"Yeganskoye field2004 2005 2006 2007 2008

Proved oil reserves, mln barrels 1,292


Group’s share, th. tons 7,943 8,087 8,265 8,086 7,626


Total wells 3,476 3,563 3,643 3,722 3,834




Watercut, % 78.4 80.8 81.8 83.0 85.0

Povkhovskoye field2004 2005 2006 2007 2008

Proved oil reserves, mln barrels 760



Total wells 3,202 3,202 3,213 3,261 3,268



Average flow rate per well, tons per day 11.9 11.8 11.9 11.8 10.7Watercut, % 61.5 66.3 70.1 71.2 73.4


* Reserves are stated in accordance with the share of the Group. If the Group’s share in production is less than 100%, then the share is stated in a separate line. Summary production data are stated in accordance with the share of the Group.

Yuzhno"Yagunskoye field2004 2005 2006 2007 2008





Total wells 1,771 1,776 1,783 1,810 1,879

Production wells 1,006 1,046 979 975 990

Production wells in use 907 943 875 860 883


Watercut, % 76.3 80.1 83.3 86.7 89.6

Pokachevskoye field2004 2005 2006 2007 2008




Total wells 2,206 2,214 2,215 2,243 2,272


Production wells in use 965 978 1,059 1,151 1,158


Watercut, % 87.7 88.6 91.0 92.1 93.3

Kogalymskoye field2004 2005 2006 2007 2008




Total wells 473 504 520 553 574

Production wells 240 267 282 294 308



Watercut, % 40.2 41.9 42.3 45.7 50.3

Uryevskoye field2004 2005 2006 2007 2008




Total wells 1,984 2,008 2,011 2,076 2,200




Watercut, % 90.3 90.9 91.6 90.0 89.7


24

Nong"Yeganskoye field

2004 2005 2006 2007 2008




Total wells 443 443 444 454 469




Watercut, % 73.0 75.4 83.7 86.4 89.6

Kluchevoye field

2004 2005 2006 2007 2008


Oil production, th. tons 1,751 1,464 1,385 1,160 884


Total wells 409 409 409 409 407




Watercut, % 71.5 78.8 85.4 88.3 91.8

Druzhnoye field

2004 2005 2006 2007 2008




Total wells 896 915 945 966 998




Watercut, % 80.8 81.6 83.0 85.2 87.3

Nivagalskoye field

2004 2005 2006 2007 2008




Total wells 931 931 934 936 968




Watercut, % 75.6 79.9 83.0 82.1 81.2

25

2


Sredne"Khulymskoye field

2004 2005 2006 2007 2008


Oil production, th. tons 781 1,090 1,035 969 840


Total wells 61 85 114 138 142




Watercut, % 19.3 23.8 31.3 38.2 44.7

Severo-Pokachevskoye field

2004 2005 2006 2007 2008


Oil production, th. tons 476 680 853 1,093 1,036


Total wells 89 105 125 154 204




Watercut, % 16.2 28.1 34.4 43.6 59.7

Kamenny license area (eastern part of the Kamennaya area of the Krasnoleninskoye field)

2004 2005 2006 2007 2008


Oil production, th. tons – – 1,124 1,081 1,079

Cumulative oil production, mln tons – – 2.8 2.9 5.0

Total wells – – 311 332 434

Production wells – – 196 205 294

Production wells in use – – 148 170 264

Average flow rate per well, tons per day – – 23.5 18.2 14.7

Watercut, % – – 43.7 50.4 62.0

Kechimovskoye field

2004 2005 2006 2007 2008


Oil production, th. tons 460 584 730 731 968


Total wells 146 167 177 200 327




Watercut, % 61.7 63.5 65.9 68.2 73.8


26

Timan"Pechora

2004 2005 2006 2007 2008Total LUKOIL production of oil in Timan!Pechora, th. tons 11,732 12,476 13,601 14,576 16,685

Oil production from 7 major oilfields of the Group in the region, th. tons 7,235 7,631 8,475 9,152 10,714

Share, % 61.7 61.2 62.3 62.8 64.2

LUKOIL proved oil reserves in Timan!Pechora, mln barrels 2,912

Proved oil reserves of 7 major oil fieldsof the Group in the region, mln barrels 1,608

Share, % 55.2

Kharyaginskoye field

2004 2005 2006 2007 2008




Total wells 331 333 348 356 365




Watercut, % 38.5 42.0 45.2 47.2 51.9

Usinskoye field2004 2005 2006 2007 2008




Total wells 1,755 1,752 1,748 1,745 1,730




Watercut, % 83.1 83.3 83.1 83.9 84.0

Yuzhno"Shapkinskoye field2004 2005 2006 2007 2008


Oil production, th. tons 1,346 1,498 1,341 1,299 903

Group’s share, th. tons 672 811 1,341 1,299 903


Total wells 43 57 60 62 68




Watercut, % 7.9 21.1 52.1 57.2 67.5

27

2


Vozeiskoye field2004 2005 2006 2007 2008




Total wells 1,587 1,588 1,586 1,585 1,583




Watercut, % 89.8 89.7 90.3 90.0 89.3

Tedinskoye field2004 2005 2006 2007 2008


Oil production, th. tons 621 882 1,037 1,099 1,042


Total wells 19 28 36 50 58




Watercut, % 5.8 23.3 39.6 54.0 65.5

Pashshorskoye field2004 2005 2006 2007 2008



Cumulative oil production, mln tons 0 0 0 0.8 1.7

Total wells 6 6 6 14 21




Watercut, % 0.7 0.0 11.0 13.1 10.6

Yuzhno"Khylchuyuskoye field2004 2005 2006 2007 2008


Oil production, th. tons – – – – 1,527

Cumulative oil production, mln tons – – – – 1.6

Total wells – – – – 68

Production wells – – – – 22

Production wells in use – – – – 22

Average flow rate per well, tons per day – – – – 539.9

Watercut, % – – – – 2.0


28

29

Urals2004 2005 2006 2007 2008

Share of the Unvinskoye field in LUKOIL oilproduction in Urals, % 10.2 11.2 11.7 12.3 11.9

Share of the Unvinskoye fieldin LUKOIL proved oil reserves in Urals, % 8.1

Unvinskoye field2004 2005 2006 2007 2008




Total wells 428 428 428 428 420




Watercut, % 24.3 19.8 19.6 27.3 30.2

Volga2004 2005 2006 2007 2008

Share of the Pamyatno!Sasovskoyefield in LUKOIL oilproduction in Volga, % 70.4 72.1 72.8 76.0 73.2

Share of the Pamyatno!Sasovskoyefield in LUKOIL proved oil reserves in Volga (excluding Caspian), % 58.3

Pamyatno"Sasovskoye field2004 2005 2006 2007 2008





Total wells 61 62 65 65 65




Watercut, % 0.2 0.7 0.9 2.3 3.8

Kaliningrad region2004 2005 2006 2007 2008

Share of the Kravtsovskoye field in LUKOIL oil production in Kaliningrad region, % 10.3 47.3 60.9 61.7 59.1

Share of the Kravtsovskoyefield in LUKOIL proved oil reserves in Kaliningrad region, % 42.4



30

Kravtsovskoye field2004 2005 2006 2007 2008




Total wells 3 8 12 18 19




Watercut, % 14.5 5.5 8.7 14.0 22.3

Gas fields

Nakhodkinskoye field

2004 2005 2006 2007 2008

Proved natural gas reserves, bcf 3,703

Natural gas production, mcm 7 472 8,486 7,798 8,408

Cumulative natural gas production, mcm 0.0 0.5 9.0 16.8 25.2

Total wells – 52 69 65 65

Production wells – 49 61 61 61

Production wells in use – 13 61 61 50

0

20

30

40

50

60

20082007200620052004

10

Timan!PechoraYuzhno!ShapkinskoyePashshorskoyeTedinskoyeVozeiskoyeYuzhno!KhylchuyuskoyeUsinskoyeKharyaginskoye

VolgaPamyatno!Sasovskoye

UralsUnvinskoye

Kaliningrad regionKravtsovskoye

Western SiberiaSredne!KhulymskoyeKluchevoyeKechimovskoyeNong!YeganskoyeSevero!PokachevskoyeKamenny license areaDruzhnoyeNivagalskoyeUryevskoyeYuzhno!YagunskoyeKogalymskoyePokachevskoyePovkhovskoyeVat!YeganskoyeTevlinsko!Russkinskoye

Oil production from major LUKOIL fields in Russia, mln tons

31

INTERNATIONAL PROJECTS OF LUKOIL GROUP

ColumbiaCondor

VenezuelaJunin!3

70%

Kazakhstan

Karachaganak 15%

Tengiz 2.7%

Kumkol 50%

Kazakhoil!Aktobe 25%

North Buzachi 25%

Karakuduk 50%

Arman 25%

Tyub!Karagan 50%

Atashsky 50%

Uzbekistan

Kandym – Khauzak– Shady 90%

Azerbaijan

Shakh Deniz 10%

D!222 65%

Saudi Arabia

Block " 80%

Iraq

West Kurnah!2 68.5%

Egypt

Meleiha 24%

WEEM 100%

SNG Holdings Ltd. 100%

Share ofLUKOIL Group

Gas Oil

ExplorationProduction and preparation for production

15%

Cote d’Ivoire

CI!205 63%

CI!101 56.66%

CI!401 56.66%

Ghana

Cape Three Points Deep Water 56.66%

Aral 20%

South Zhambai

South Zaburunye 12.5%

12.5%

International projects*, total2004 2005 2006 2007 2008

Proved oil reserves, mln barrels 487 614 608 495 592Proved gas reserves, bcf 3,216 3,845 4,442 5,068 6,972Hydrocarbon reserves, mln boe 1,023 1,255 1,350 1,339 1,754Oil production, th. tons 3,480 3,881 5,674 5,545 5,295Marketable gas production, mcm 1,135 1,208 1,189 1,682 4,192Marketable hydrocarbon production, mln boe 33 37 50 52 65

KazakhstanKarachaganak

Proved oil reserves, mln barrels 231 208 173 157 246Proved gas reserves, bcf 1,624 1,441 1,203 1,137 1,861Hydrocarbon reserves, mln boe 502 448 374 347 556Oil production, th. tons 1,189 1,438 1,448 1,601 1,565Marketable gas production, mcm 1,189 979 1,005 1,046 1,069Marketable hydrocarbon production, mln boe 15 17 17 19 18

KumkolProved oil reserves, mln barrels 111 89 79 78 68Proved gas reserves, bcf 0 0 13 14 13Hydrocarbon reserves, mln boe 111 89 81 80 70Oil production, th. tons 1,689 1,502 1,707 1,756 1,628Marketable gas production, mcm 51 54 41 44 42Marketable hydrocarbon production, mln boe 13 12 13 14 13

TengizProved oil reserves, mln barrels 112 118 120 117 120Proved gas reserves, bcf 188 177 154 151 152Hydrocarbon reserves, mln boe 143 147 146 142 145Oil production, th. tons 369 366 360 376 466Marketable gas production, mcm 167 172 143 147 190Marketable hydrocarbon production, mln boe 4 4 4 4 5

North BuzachiProved oil reserves, mln barrels – 42 80 41 35Oil production, th. tons – 103 668 524 428Marketable gas production, mcm – 2 – – –Marketable hydrocarbon production, mln boe – 0.7 5 4 3* Group’s share.



32

2004 2005 2006 2007 2008

ArmanProved oil reserves, mln barrels – 3 4 2 0.6Oil production, th. tons – 19 82 44 26Oil production, mln barrels – 0.1 0.6 0.3 0.2

KarakudukProved oil reserves, mln barrels – 38 50 34 33Oil production, th. tons – 125 702 668 636Marketable gas production, mcm – 1 – – –Marketable hydrocarbon production, mln boe – 1 5 5 5

Kazakhoil"AktobeProved oil reserves, mln barrels – 89 76 35 32Oil production, th. tons – 114 508 286 190Oil production, mln barrels – 1 4 2 1

EgyptMeleihaProved oil reserves, mln barrels 1 3 2 3 4Oil production, th. tons 53 47 40 46 47Oil production, mln barrels 0.4 0.4 0.3 0.4 0.4

WEEMProved oil reserves, mln barrels 13 7 6 5 7Oil production, th. tons 180 167 159 154 144Oil production, mln barrels 1 1 1 1 1

AzerbaijanShakh DenizProved oil reserves, mln barrels 15 11 10 11 18Proved gas reserves, bcf 338 249 314 476 532Hydrocarbon reserves, mln boe 71 53 63 90 107Oil production, th. tons – – – 88 147Marketable gas production, mcm – – – 309 551Marketable hydrocarbon production, mln boe – – – 2 4

UzbekistanKandym – Khauzak – ShadyProved oil reserves, mln barrels 4 6 8 6 10Proved gas reserves, bcf 1,066 1,978 2,758 3,290 3,019Hydrocarbon reserves, mln boe 182 336 468 554 513Oil production, th. tons – – – 2 12Marketable gas production, mcm – – – 136 2,340Marketable hydrocarbon production, mln boe – – – 0.8 14

South"West GissarProved oil reserves, mln barrels – – – – 17Proved gas reserves, bcf – – – – 1,395Hydrocarbon reserves, mln boe – – – – 250Oil production, th. tons – – – – 6Marketable hydrocarbon production, mln boe – – – – 0.1

ColumbiaCondorProved oil reserves, mln barrels – – – 6 1Proved gas reserves, bcf – – – – –Hydrocarbon reserves, mln boe – – – 6 1

REFINING AND GAS PROCESSING

33

OIL REFINING

2.8

2.04

3.9

10.0

2.42

2.4

8.8

7.12

8.3

17.0

16.97

4.0 3.7

3.81

3.1 12.6

12.46

8.0

0.4

0.20

11.0

10.74

5.2

44.7

44.18

21.8

12.10

66.5

56.28

7.8

0.52

9.3ISAB Complex*Italy

* Capacity of the ISAB complex is shown in accordance with the Company share (49%). The throughput represents the Company share in December 2008.

Throughputin 2008,mln tons

Capacity,mln tons per year Nelson

IndexTotalTotal, foreignrefineries

Total,Russian refineries

Burgas RefineryLUKOIL NeftokhimBurgas, Bulgaria

Petrotel!LUKOILPloiesti, Romania

Odessa RefineryUkraine

Nizhny Novgorod RefineryLUKOIL!Nizhego!rodnefteorgsintez

Ukhta RefineryLUKOIL!Ukhta!neftepererabotka

Perm RefineryLUKOIL!Perm!nefteorgsintez

Mini!refineriesin Uray andKogalym

Volgograd RefineryLUKOIL!Volgograd!neftepererabotka

LUKOIL Group refineries

Input capacity of LUKOIIL facilities, th. barrels per dayVacuum Thermal Catalytic Catalytic Catalytic Catalytic

Crude distillation Coking operations cracking reforming hydrocracking hydrotreating

Perm 254.6 116.3 17.6 – 9.3 36.9 65.2 146.3Volgograd 225.2 68.2 18.5 – – 43.7 – 95.9Nizhny Novgorod 337.1 132.4 – 42.2 – 47.1 – 158.5Ukhta 73.4 18.1 – 14.1 – 9.2 – 29.4Burgas 175.1 72.6 – 26.4 34.8 14.4 – 101.4Ploiesti 47.8 21.8 10.5 – 18.5 10.1 – 45.7Odessa 55.7 25.5 – 12.3 – 11.5 – 33.9Total* 1,168.9 454.9 46.6 95.0 62.6 172.9 65.2 611.1

Production capacity of LUKOIL facilities, th. barrels per dayHydrogen, Sulfur,

Alkylation Aromatics Isomerization Lubricants Oxygenates mcf per day tons per day Bitumen

Perm – 2.2 12.0 9.4 – 119.4 213.7 12.1Volgograd – 1.8 9.8 11.3 – 10.7 111.8 4.2Nizhny Novgorod – – 11.8 4.5 – – – 20.7Ukhta – – – – – 11.9 11.0 4.4Burgas 4.6 3.3 1.3 – 1.9 16.1 164.4 4.8Ploiesti – – 3.8 – 2.6 3.9 54.8 –Odessa – – 3.2 – – – 21.1 3.3Total* 4.6 7.3 41.9 25.2 4.5 162.0 576.8 49.5

Capital expenditures in refining, mln USD2004 2005 2006 2007 2008

Expenditures 428 412 696 830 1,023

Refining expenses, mln USD2004 2005 2006 2007 2008

Owned refineries 532 644 730 880 1,115

Affiliated refineries n/a 104 230 242 439

* Excluding mini!refineries and ISAB Complex.

Refinery throughputs and petroleum product output at LUKOIL Grouprefineries, mln tons

2004* 2005* 2006 2007 2008**Throughputs 43.62 47.27 48.88 52.16 56.28

Russian refineries 35.55 37.30 39.50 42.55 44.18Including mini!refineries 0.22 0.21 0.20 0.19 0.20

Foreign refineries 8.07 9.97 9.38 9.61 12.10Throughputs,th. barrels per day 874 949 982 1,047 1,127

Petroleum product output 41.05 44.40 45.85 49.00 53.22Russian refineries 33.66 35.48 37.64 40.56 42.25

Including mini!refineries 0.22 0.20 0.18 0.18 0.19

Foreign refineries 7.39 8.92 8.21 8.44 10.97

Structure of petroleum product output at LUKOIL Group refineries***, %2004 2005 2006 2007 2008

Motor gasoline 14.6 15.0 14.6 14.8 15.3Diesel fuel 28.6 30.7 30.4 30.1 30.5Jet fuel 5.4 5.0 5.3 5.4 5.4Ship fuel 4.0 4.7 3.5 2.2 2.2Heating oil 1.1 1.1 0.9 0.8 0.7Vacuum gas oil 5.2 7.5 8.9 9.3 11.2Naphta 3.4 3.4 3.7 3.8 3.0Fuel oil 26.6 22.4 22.8 24.8 23.1Bitumen 3.9 3.2 3.0 3.0 2.8Lubricants 3.1 2.6 2.7 2.3 2.2Coke 1.3 1.5 1.4 1.3 1.3Other 2.8 2.9 2.8 2.2 2.3

Depth of refining at LUKOIL Group refineries***, %2004 2005 2006 2007 2008

Total 74.4 77.5 77.0 75.3 76.7Russian refineries 75.4 77.5 76.2 74.0 76.0Foreign refineries 70.5 77.5 80.4 81.0 79.7

Production and blending of lubricants at LUKOIL refineries, th. tons2004 2005 2006 2007 2008

Total production(full cycle) 1,199 1,115 1,174 1,120 1,128Mixing of lubricants 83 88 91 93 76Packaged lubricants output 142 180 206 223 231


34

Distribution of throughputs at LUKOIL refineries (2008)

Nizhny NovgorodRefinery (30.2%)

Mini!refineries (0.4%)

Ploiesti Refinery (4.3%)

Burgas Refinery (12.6%)

Ukhta Refinery (6.8%)

Volgograd Refinery(19.1%)

Perm Refinery(22.1%)

ISAB Complex (0.9%)

Odessa Refinery (3.6%)

Share of high!octane gasolines intotal output of motor gasolines atLUKOIL refineries, %***

0 20 40 60 80 100

84.5

88.8

79.5

72.2

91.02008

2004

2005

2006

2007

Share of clean diesel (Euro!2 andhigher) in total output of diesel fuelat LUKOIL refineries, %***

0 20 40 60 80

2008

2004

2005

2006

68.7

2007

67.8

61.8

42.0

70.6

Light products yield at LUKOILrefineries, %***

0 10 20 30 40 50 60

52.7

53.2

53.2

51.3

52.5

2008

2004

2005

2006

2007

N. NovgorodRefinery

PermRefinery

VolgogradRefinery

0 50 100

Output of main petroleum productsat LUKOIL refineries (2008), %

25 75

PloiestiRefinery

UkhtaRefinery

OdessaRefinery

Gasoline Diesel

Fuel oilLubricants Other

Jet fuel

BurgasRefinery

* Excluding fuel oil processed at Burgas Refinery.** Including refinery throughputs at ISAB Complex in December 2008 (Company’s share).

*** Excluding mini!refineries and ISAB Complex.

Throughput and petroleum product output at Volgograd Refinery

2004 2005 2006 2007 2008

Refinery throughput,mln tons 8.98 9.23 9.62 9.61 10.74

Petroleum productoutput, mln tons 8.46 8.74 9.12 9.06 10.18

Structure of petroleum product output, %

Motor gasoline 10.9 9.5 9.5 12.9 14.3

Diesel fuel 29.2 28.0 28.7 27.1 28.3

Jet fuel 8.8 9.1 8.8 9.5 9.2

Ship fuel 0.9 1.7 1.7 1.4 1.1

Heating oil 4.1 3.9 2.2 2.6 2.6

Vacuum gas oil 6.1 9.3 11.4 9.2 12.7

Naphta 9.9 11.1 9.9 6.2 4.4

Fuel oil 17.7 15.9 17.0 21.0 17.6

Bitumen 1.7 1.4 1.6 1.5 1.1

Lubricants 5.7 5.3 5.4 5.1 4.7

Coke 3.1 2.8 2.1 2.0 2.1

Other 1.9 2.0 1.7 1.5 1.9

Main operating indicators

2004 2005 2006 2007 2008

Depth of refining, % 82.3 83.7 81.8 78.4 81.3

Light products yield, % 60.5 60.2 57.9 56.6 57.0

Share of high!octane gasolinein total output of motorgasoline, % 51.7 59.9 62.6 77.7 84.1

Share of clean diesel intotal output of diesel fuel, % 8.9 6.7 8.5 16.5 16.2

35

VOLGOGRAD REFINERY

Shipment by transport type fromthe Volgograd Refinery (2008)

Railroad (76.3%)

Road (1.1%)Water (18.6%)

Pipeline (4.0%)


0 20 40 60 80 100

81.3

81.8

83.7

82.3

78.4

2008

2004

2005

2006

2007


0 25 50 75

57.0

57.9

60.2

60.5

56.6

2008

2004

2005

2006

2007

Share of clean diesel (Euro!2 and higher) in total output of diesel fuel, %

0 6 12 18

8.5

6.7

8.9

16.2

16.5

2008

2004

2005

2006

2007

Share of high!octane gasoline intotal output of motor gasoline, %

0 25 50 75 100

84.1

62.6

59.9

51.7

77.7

2008

2004

2005

2006

2007


Throughput and petroleum product output at Perm Refinery

2004 2005 2006 2007 2008




Motor gasoline 14.7 14.8 12.9 12.3 13.8

Diesel fuel 28.5 32.8 31.9 32.4 32.8

Jet fuel 5.3 5.2 5.8 6.7 6.5

Ship fuel 4.8 5.1 2.6 2.1 1.8

Heating oil 0.3 0.1 0.1 0.0 0.1

Vacuum gas oil 6.0 8.8 9.9 10.1 10.6

Naphta 2.2 2.8 4.4 6.5 4.6

Fuel oil 19.4 12.2 14.8 15.4 15.4

Bitumen 5.5 5.2 4.8 4.1 4.3

Lubricants 4.2 4.0 3.8 3.7 3.4

Coke 2.3 2.3 2.3 2.2 2.3

Other 6.8 6.7 6.7 4.5 4.4


2004 2005 2006 2007 2008






36

PERM REFINERY

Shipment by transport type fromthe Perm Refinery (2008)

Railroad (73.7%)

Pipeline (21.6%)

Road (1.5%)

Water (3.2%)


0 20 40 60 80 100

84.2

85.3

88.0

84.6

84.2

2008

2004

2005

2006

2007


0 10 20 30 40 50 60

57.6

57.2

57.2

52.1

58.1

2008

2004

2005

2006

2007


0 20 40 60 80 100

92.9

84.8

78.9

46.8

91.3

2008

2004

2005

2006

2007


0 30 60 90

87.4

75.9

69.4

63.5

84.6

2008

2004

2005

2006

2007

Throughput and petroleum product output atNizhny Novgorod Refinery

2004 2005 2006 2007 2008




Motor gasoline 12.3 12.4 13.0 12.4 12.2

Diesel fuel 24.5 25.8 25.4 25.3 25.5

Jet fuel 5.7 5.0 5.5 5.1 5.4

Ship fuel 5.7 7.1 3.5 0.4 0.0

Heating oil 0.1 0.0 0.0 0.0 0.0

Vacuum gas oil 5.0 8.7 11.1 12.6 14.3

Naphta 1.3 0.6 0.5 1.6 1.7

Fuel oil 37.7 34.5 35.8 37.2 35.6

Bitumen 4.5 3.4 3.0 3.4 3.3

Lubricants 2.4 1.8 1.9 1.5 1.5

Coke 0.0 0.0 0.0 0.0 0.0

Other 0.8 0.7 0.3 0.5 0.5


2004 2005 2006 2007 2008





37

NIZHNY NOVGOROD REFINERY

Shipment by transport type fromthe Nizhny Novgorod Refinery (2008)

Railroad (90.1%)

Water (3.2%)

Road (1.3%)

Pipeline (5.4%)


0 20 40 60 80

63.2

78.9

61.2

29.9

72.2

2008

2004

2005

2006

2007


0 20 40 60 80 100

90.3

85.4

75.0

66.5

86.6

2008

2004

2005

2006

2007


0 20 40 60 80

65.0

64.8

66.2

63.4

63.7

2008

2004

2005

2006

2007


0 10 20 30 40 50

43.1

42.3

42.8

43.4

42.6

2008

2004

2005

2006

2007


Throughput and petroleum product output atUkhta Refinery

2004 2005 2006 2007 2008




Motor gasoline 9.8 9.6 9.0 8.9 8.3

Diesel fuel 27.3 27.9 27.4 28.4 27.9

Jet fuel 0.9 0.7 1.2 0.4 0.7

Ship fuel 12.2 14.5 19.9 16.8 21.7

Heating oil 0.0 0.0 0.0 0.0 0.0

Vacuum gas oil 10.8 11.8 11.8 13.6 15.6

Naphta 2.6 3.1 3.2 4.1 5.1

Fuel oil 33.4 29.6 24.7 25.1 17.6

Bitumen 3.0 2.7 2.7 2.6 3.0

Lubricants 0.0 0.0 0.0 0.0 0.0

Coke 0.0 0.0 0.0 0.0 0.0

Other 0.0 0.1 0.1 0.1 0.1


2004 2005 2006 2007 2008






38

UKHTA REFINERY

Shipment by transport type fromthe Ukhta Refinery (2008)

Railroad (97.9%)

Road (2.1%)

0 20 40 60 80 100

50.1

59.3

80.7

70.7

55.4


2008

2004

2005

2006

2007


0 30 60 90

77.5

68.5

60.3

55.4

80.2

2008

2004

2005

2006

2007


0 25 50 75 100

82.6

76.0

71.4

69.2

75.5

2008

2004

2005

2006

2007


0 15 30 45

2008

2004

2005

2006

40.4

2007

39.3

39.6

39.4

40.3

39

URAY MINI!REFINERY

KOGALYM MINI!REFINERY


0 10 20 30 40

38.8

36.5

39.1

38.7

36.2

2008

2004

2005

2006

2007


38.8

37.7

41.1

41.2

36.7

0 10 20 30 40 50

2008

2004

2005

2006

2007


0 10 20 30 40 50 60

39.8

42.6

38.3

50.6

38.7

2008

2004

2005

2006

2007


0 10 20 30 40 50

36.8

37.4

39.8

46.8

37.3

2008

2004

2005

2006

2007

Throughput and petroleum product output at Urayneftegaz Mini"refinery

2004 2005 2006 2007 2008Crude oil inputs, th. tons 100.0 100.0 100.0 99.7 100.0

Returned to oil, th. tons 57.0 57.4 60.8 61.1 58.6

Used for product output,th. tons 43.0 42.6 39.2 38.6 41.4

Output of petroleumproducts, th. tons 40.1 39.8 36.6 36.1 38.8


Motor gasoline 32.4 31.9 34.4 34.0 32.1

Diesel fuel 60.4 60.2 65.6 66.0 67.9

Naphta 3.7 6.1 0.0 0.0 0.0

Bitumen 3.5 1.8 0.0 0.0 0.0


2004 2005 2006 2007 2008



Throughput and petroleum product output at Kogalymneftegaz Mini"refinery

2004 2005 2006 2007 2008Crude oil inputs, th. tons 355.4 383.1 377.9 381.3 393.4

Returned to oil, th. tons 174.7 212.3 220.5 227.1 236.3

Used for product output,th. tons 180.7 170.8 157.4 154.2 157.1

Output of petroleumproducts, th. tons 179.3 158.4 145.1 144.4 146.4


Motor gasoline 12.8 23.8 29.1 29.1 29.8

Diesel fuel 45.4 49.4 52.3 53.3 54.1

Jet fuel 14.0 14.6 16.0 16.1 14.9

Naphta 20.6 8.4 0.0 0.0 0.0

Bitumen 7.2 3.8 2.6 1.5 1.2

Main operating indicators2004 2005 2006 2007 2008




Throughput and petroleum product output atPloiesti Refinery

2004 2005 2006 2007 2008

Refinery throughput,mln tons 0.36 2.41 2.32 2.54 2.42Upgrading of gasolinesand diesel fuel, mln tons 0.03 0.00 0.00 0.00 0.00

Blending and packagingof lubricants, mln tons 0.05 0.04 0.04 0.03 0.02



Motor gasoline 35.6 36.4 35.1 35.3 34.8

Diesel fuel 35.1 45.3 48.0 49.4 50.4

Jet fuel 0.0 0.0 0.0 0.0 0.0

Ship fuel 0.0 0.0 0.0 0.0 0.0

Heating oil 0.0 0.0 0.0 0.0 0.0

Vacuum gas oil 0.0 0.0 0.0 0.0 0.0

Naphta 0.0 0.0 0.0 0.0 0.0

Fuel oil 4.8 1.4 0.0 0.0 0.0

Bitumen 0.0 0.0 0.0 0.0 0.0

Lubricants 14.9 2.0 2.0 0.4 0.0

Coke 5.8 7.6 8.6 8.3 8.2

Other 3.8 7.3 6.3 6.6 6.6







40

PLOIESTI REFINERY


0 20 40 60 80 100

100.0

100.0

100.0

100.0

100.0

2008

2004

2005

2006

2007


0 20 40 60 80 100

100.0

100.0

100.0

100.0

100.0

2008

2004

2005

2006

2007

Railroad (79.6%)

Road (20.4%)

Shipment by transport type fromthe Ploiesti Refinery (2008)


0 20 40 60 80 100

96.8

94.9

90.4

96.8

97.02008

2004

2005

2006

2007


0 20 40 60 80

72.9

75.5

63.4

79.5

78.42008

2004

2005

2006

2007

Throughput and petroleum product output atBurgas Refinery

2004 2005 2006 2007 2008

Refinery throughput,mln tons 5.26 6.17 7.06 7.06 7.12Throughput of fuel oil fromOdessa Refinery, mln tons 0.41 0.27 0.03 0.00 0.00

Petrochemical productoutput, th. tons 353.4 372.5 384.7 385.0 321.7



Motor gasoline 29.7 25.8 25.2 24.3 25.3

Diesel fuel 38.3 39.7 37.4 36.7 36.7

Jet fuel 3.0 2.7 2.4 3.0 3.2

Ship fuel 0.3 0.3 0.0 0.0 0.2

Heating oil 1.7 2.2 3.1 2.4 1.8

Vacuum gas oil 0.0 0.0 0.0 0.0 0.0

Naphta 0.9 0.8 2.0 2.0 2.2

Fuel oil 20.1 22.4 23.8 25.0 23.9

Bitumen 2.8 3.4 3.3 3.4 3.1

Lubricants 0.0 0.0 0.0 0.0 0.0

Coke 0.0 0.0 0.0 0.0 0.0

Other 3.2 2.7 2.8 3.2 3.6






41

BURGAS REFINERY

Shipment by transport type fromthe Burgas Refinery (2008)

Railroad (19.4%)

Pipeline (10.5%)

Road (17.5%)

Water (52.6%)


0 20 40 60 80 100

87.8

81.8

83.2

84.7

85.1

2008

2004

2005

2006

2007


0 20 40 60 80 100

100.0

100.0

100.0

100.0

100.02008

2004

2005

2006

2007


0 20 40 60 80

2008

2004

2005

2006

76.1

2007

75.0

76.1

75.5

75.3


0 20 40 60 80

61.2

63.7

59.2

61.5

59.1

2008

2004

2005

2006

2007


Throughput and petroleum product output atOdessa Refinery

2004 2005 2006 2007 2008

Refinery throughput,mln tons 2.45 1.39 – 0.01 2.04

Petroleum productoutput, mln tons 2.34 1.35 – 0.01 1.96


Motor gasoline 12.0 13.3 – – 14.3

Diesel fuel 28.1 27.6 – – 33.9

Jet fuel 3.2 3.4 – – 0.0

Ship fuel 0.0 0.0 – – 0.0

Heating oil 0.0 0.0 – – 0.0

Vacuum gas oil 4.8 3.9 – – 20.6

Naphta 1.7 0.5 – – 0.0

Fuel oil 44.3 46.4 – – 28.0

Bitumen 5.1 3.9 – – 1.8

Lubricants 0.0 0.0 – – 0.0

Coke 0.0 0.0 – – 0.0

Other 0.8 1.0 – – 1.4


2004 2005 2006 2007 2008

Depth of refining, % 56.0 53.5 – – 71.6

Light products yield, % 43.0 43.4 – – 46.2

Share of high!octane gasolinein total output of motorgasoline, % 82.5 81.1 – – 92.2

Share of clean diesel intotal output of diesel fuel, % 35.7 0.2 – – 98.3


42

ODESSA REFINERY


0 20 40 60 80

–

–

53.5

56.0

71.62008

2004

2005

2006

2007


0 10 20 30 40 50

–

–

43.4

43.0

46.22008

2004

2005

2006

2007


0 25 50 75 100

–

–

0.2

35.7

98.32008

2004

2005

2006

2007


0 20 40 60 80 100

2008

2004

2005

2006

–

–

81.1

82.5

92.2

2007

Shipment by transport type fromthe Odessa Refinery (2008)

Railroad (26.7%)

Pipeline (0.2%)

Road (14.4%)

Water (58.7%)

43

ISAB REFINERY COMPLEX

2008

Complex capacitymln tons per year 16

including

Northern Refinery 5

Southern Refinery 11

Complex capacityth. barrels per day 320

Nelson Index 9.3

Throughput and petroleum product output at the ISAB complex*

2008Refinery throughput,mln tons 0.52

Petroleum productoutput, mln tons 0.58


Motor gasoline 19.0

Diesel fuel 47.1

Jet fuel 0.6

Ship fuel 0.0

Heating oil 0.0

Vacuum gas oil 0.0

Naphta 0.0

Fuel oil 17.8

Bitumen 0.0

Lubricants 0.0

Coke 0.0

Other 15.5


2008

Depth of refining, % 85.5

Light products yield, % 74.6

LUKOIL purchased a 49% stake in a joint venture for management of theISAB Refinery complex (Italy) in 2008 . Value of the deal – 1.45 billion euros(about $1.83 billion)

ISAB consists of 2 oil refineries joined by a system of oil pipelines and inte!grated in a single operating complex, as well as three sea wharfs and a tankbattery with capacity of 3.7 mcm

Acquisition of a share in the complex increased LUKOIL’s overall refiningcapacity by 13% and refining capacities abroad by 60%

* Group’s share for December 2008.


44


GAS PROCESSING

Processing and marketable product output at Gas"processing plants of LUKOIL Group2004 2005 2006 2007 2008

Processing of petroleum and fat gas, mcm 2,344.7 2,382.6 2,646.7 3,316.9 3,248.6NGL processing, th. tons 379.0 478.8 628.5 881.7 866.2Marketable products

NGL, th. tons 349.8 362.5 427.3 653.4 639.1LPG, th. tons 482.2 574.5 705.9 960.1 965.3Stable gas naphta, th. tons 106.9 136.3 185.3 194.6 157.6Acyclic hydrocarbons, th. tons – – – 4.1 –Stripped gas, mcm 1,902.8 1,890.1 2,038.3 2,595.2 2,567.9Isopentane, th. tons 18.2 18.2 18.8 20.9 43.8Sulfur, th. tons 0.7 0.4 – – –Sodium bisulfite, th. tons 0.0 0.7 0.6 1.2 2.0

Processing and marketable product output at Korobkovsky Gas"processing plant2004 2005 2006 2007 2008

Petroleum gas processing, mcm 420.7 428.0 440.6 445.0 459.9NGL processing, th. tons 38.4 41.7 44.9 59.7 62.8Marketable products

LPG, th. tons 72.1 72.5 74.1 86.3 89.4Stable gas naphta, th. tons 44.2 47.8 48.9 57.3 55.0Stripped gas, mcm 336.6 333.7 329.9 353.4 382.5

Processing and marketable product output at Permneftegazpererabotka2004 2005 2006 2007 2008

Processing of petroleum and fat gas, mcm 478.2 497.6 541.9 586.5 583.6NGL processing, th. tons 340.6 437.1 583.6 822.0 803.4Marketable products

LPG, th. tons 410.0 500.5 629.8 871.4 873.6Stable gas naphta, th. tons 61.2 79.4 98.5 95.1 59.3Acyclic hydrocarbons, th. tons – – – 4.1 –Isopentane, th. tons 18.2 18.2 18.8 20.9 43.8Stripped gas, mcm 369.8 347.8 374.0 417.2 418.6Sulfur, th. tons 0.7 0.4 – – –Sodium bisulfite, th. tons 0.0 0.7 0.6 1.2 2.0

Processing and marketable product output at Lokosovsky Gas"processing plant2004 2005 2006 2007 2008

Petroleum gas processing, mcm 1,134.7 1,214.5 1,399.2 2,038.1 1,993.9Marketable products

NGL, th. tons 349.8 362.5 427.3 653.4 639.1Stable gas naphta, th. tons 0.0 5.5 34.5 38.9 39.6LPG, th. tons 0.0 1.1 1.4 1.6 1.7Stripped gas, mcm 896.4 973.4 1,088.7 1,669.6 1,570.6

Processing and marketable product output at Usinsky Gas"processing plant2004 2005 2006 2007 2008

Petroleum gas processing, mcm 311.1 242.5 265.0 247.3 211.2Marketable products

Stripped gas, mcm 300.0 235.2 245.7 154.9 196.2LPG, th. tons 0.1 0.4 0.6 0.8 0.6Stable gas naphta, th. tons 1.5 3.6 3.4 3.4 3.7

Processing and production of petrochemicals at LUKOIL Group petrochemical plants, th. tons

2004 2005 2006 2007 2008Processing* 2,442.0 2,355.5 2,187.7 2,190.3 1,568.2Marketable products, total 2,243,5 2,178.7 2,038.3 2,040.5 1,461.6Polymers and monomers 858.9 853.8 797.8 844.2 615.0

Polyethylene 442.7 469.9 447.3 477.8 425.5Vinyl chloride 236.0 190.2 179.2 171.5 70.9Polypropylene 64.8 67.9 70.2 82.9 67.4Vinyl acetate 40.9 53.1 35.0 51.3 38.8Synthetic fiber 31.9 31.8 30.9 25.3 2.8Synthetic rubber 19.8 19.6 20.2 21.4 5.3Latex 12.0 12.8 11.8 11.0 2.9Alfamethylstyrene 2.4 2.7 3.0 2.9 0.7Styrene 7.9 5.8 0.2 0.1 0.7Polystyrene 0.5 0.0 0.0 0.0 0.0

Products of organic synthesis 676.7 690.6 647.5 578.3 462.9Benzene 179.1 173.5 140.6 110.2 114.5Acrylonitrile 139.5 149.3 138.2 143.2 157.8Hydrate of sodium 115.9 100.6 91.6 47.0 20.2Ethylene glycol 71.3 75.8 77.3 83.1 70.2Ammonia sulphate 63.3 64.5 63.9 62.1 18.7Phenol 37.5 38.9 38.2 37.7 8.8Toluene 20.1 29.5 31.4 30.7 26.1Methyl methacrylate 26.3 26.6 26.5 25.8 7.8Xylene 11.8 18.1 18.0 18.3 14.3Ethanol amines 3.9 4.5 13.4 12.7 11.8Acetone 3.8 4.9 4.2 3.6 1.5Acetonitrile 4.2 4.4 4.2 3.9 3.6Sodium cyanide – – – – 7.6

Pyrolysis products and fuel fractions 692.9 622.8 584.2 611.4 365.8Liquid pyrolysis fractions 255.6 247.2 210.2 251.6 149.8Propylene 238.8 238.9 232.5 225.1 157.9Heavy oil fuel 172.7 119.0 98.1 88.3 53.3Ethylene 22.9 14.2 40.1 43.7 2.3Pyrolene 2.9 3.5 3.3 2.7 2.5

Other 15.0 11.5 8.8 6.6 17.9* Excluding Burgas Refinery.

Processing and production of petrochemicals at Stavrolen, th. tons2004 2005 2006 2007 2008

Processing 906.5 1,025.5 889.1 992.1 979.2Marketable product output 692.4 787.8 672.9 752.9 724.1

Polyethylene 274.3 307.8 267.8 301.6 308.1Liquid pyrolysis fractions 133.6 154.1 174.4 212.3 139.3Propylene 128.9 146.9 126.9 121.4 120.1Polypropylene – – – 19.3 18.6Benzene 78.2 83.6 36.3 14.0 64.4Vinyl acetate 40.9 53.1 35.0 51.3 38.8Heavy oil fuel 36.5 41.2 31.6 31.9 33.6Other – 1.1 0.9 1.1 1.2

45

PETROCHEMICALS



46

Production of petrochemicals at Burgas Refinery, th. tons2004 2005 2006 2007 2008

Marketable product output 353.4 372.5 384.7 385.0 321.7Ethylene glycol 71.3 75.8 77.3 83.1 70.2Polyethylene 70.3 68.2 71.5 74.2 69.0Polypropylene 64.8 67.9 70.2 63.6 48.8Benzene 20.0 25.4 31.6 30.9 30.8Toluene 20.1 29.5 31.4 30.7 26.1Synthetic rubber 19.8 19.6 20.2 21.4 5.3Acrylonitrile 20.8 21.0 18.4 20.7 25.1Xylene 11.8 18.1 18.0 18.3 14.3Ethanol amines 3.9 4.5 13.4 12.7 11.8Latex 12.0 12.8 11.8 11.0 2.9Synthetic fiber 9.6 9.7 10.7 10.0 0.0Pyrolene 2.9 3.5 3.3 2.7 2.5Acetonitrile 0.7 0.6 0.7 0.6 0.6Ethylene oxide 0.7 1.2 0.3 0.0 0.0Styrene 7.9 5.8 0.2 0.1 0.7Ethylene 3.3 0.4 0.0 0.0 0.0Pyrolene 0.5 0.3 0.0 0.0 0.0Polystyrene 0.5 0.0 0.0 0.0 0.0Other 12.5 8.2 5.7 5.0 13.6

Processing and production of petrochemicals at Saratovorgsintez, th. tons2004 2005 2006 2007 2008

Processing 415.2 436.6 411.8 392.3 287.7Marketable product output 279.6 292.8 281.2 273.7 186.7

Acrylonitrile 118.7 128.3 119.8 122.5 132.7Ammonia sulphate 63.3 64.5 63.9 62.1 18.7Phenol 37.5 38.9 38.2 37.7 8.8Methyl methacrylate 26.3 26.6 26.5 25.8 7.8Synthetic fiber 22.3 22.0 20.1 15.3 2.8Acetone 3.8 4.9 4.2 3.6 1.5Acetonitrile 3.5 3.8 3.5 3.3 3.0Alfamethylstyrene 2.4 2.7 3.0 2.9 0.7Isopropylbenzene 0.0 0.0 0.8 0.0 0.0Methyl acrylate 0.8 0.8 0.7 0.4 0.0Acetone cyanohydride 1.0 0.2 0.4 0.0 3.1Sodium cyanide 0.0 0.0 0.0 0.0 7.6Carbon fibre precursor 0.0 0.1 0.1 0.1 0.0

Processing and production of petrochemicals at Karpatneftekhim, th. tons2004 2005 2006 2007 2008

Processing 1,120.3 893.4 886.8 805.9 301.3Marketable product output 918.1 725.6 699.5 628.9 229.1

Vinyl chloride 236.0 190.2 179.2 171.5 70.9Polyethylene 98.1 93.9 108.0 102.0 48.4Propylene 109.4 91.7 105.6 103.7 37.8Hydrate of sodium 115.9 100.6 91.6 47.0 20.2Benzene 80.9 64.5 72.7 65.3 19.3Heavy oil fuel 136.2 77.8 66.5 56.4 19.7Ethylene 19.6 13.8 40.1 43.7 2.3Liquid pyrolysis fractions 122.0 93.1 35.8 39.3 10.5

47

MARKETING

MARKETING OF OIL, PETROLEUM PRODUCTS AND PETROCHEMICALS

4

Crude oil sales2004 2005 2006 2007 2008

mln USD

Export and sales on international markets 10,940 16,367 17,649 19,258 24,007

Including export and sales to near!abroadcountries 602 778 790 912 1,625

Domestic sales 181 120 376 440 600

Total 11,121 16,487 18,025 19,698 24,607

th. tons


Including export and sales to near!abroadcountries 4,076 3,254 2,958 2,712 4,315

Domestic sales 1,637 672 1,823 1,604 2,102

Total 47,667 46,588 42,840 41,011 39,539

Export of crude oil using Transneft export routes 38,909 38,529 41,478 39,995 36,070

Export of crude oil bypassing Transneft 7,389 7,288 2,655 2,158 3,225

Total crude oil exports from Russia 46,298 45,817 44,133 42,153 39,295

Realized average sales price, USD per ton2004 2005 2006 2007 2008

Export and sales on international markets 237.7 356.5 430.3 488.7 641.3

Including export and sales to near!abroadcountries 147.6 239.2 267.2 336.2 376.6

Domestic sales 110.6 179.2 206.4 274.4 285.7

Total 233.3 353.9 420.8 480.3 622.3

Oil purchases, th. tons2004 2005 2006 2007 2008

Crude oil purchases in Russia 2,839 1,468 1,850 47 236

Crude oil purchases internationally 8,826 9,430 5,101 4,475 10,379

Total 11,665 10,898 6,951 4,522 10,615

Petroleum product sales2004 2005 2006 2007 2008

mln USD


Wholesale 11,403 22,923 30,302 37,971 50,553

Retail 3,914 6,293 7,157 9,183 11,989

Domestic sales 4,665 6,725 8,151 9,583 13,872

Wholesale 3,429 4,753 5,431 5,862 8,049

Retail 1,236 1,972 2,720 3,721 5,823

Total 19,982 35,941 45,610 56,737 76,414


48

Petroleum product sales2004 2005 2006 2007 2008

th. tons


Wholesale 35,946 49,549 57,558 64,394 67,669

Retail 5,480 7,117 7,171 7,910 8,200Domestic sales 19,724 19,970 19,150 18,557 19,278

Wholesale 16,981 16,421 15,155 13,704 13,314

Retail 2,743 3,549 3,995 4,853 5,964Total 61,150 76,636 83,879 90,861 95,147

Realized average petroleum product sales price, USD per ton2004 2005 2006 2007 2008

Export and sales on international markets 369.7 515.6 578.7 652.2 824.3

Wholesale 317.2 462.6 526.5 589.7 747.1

Retail 714.2 884.3 998.1 1,160.9 1,462.1Domestic sales 236.5 336.8 425.6 516.4 719.6

Wholesale 201.9 289.4 358.4 427.7 604.6

Retail 450.6 555.8 680.8 766.7 976.4Total 326.8 469.0 543.8 624.4 803.1

Petroleum product exports by type, %2004 2005 2006 2007 2008

Naphta 4.7 4.0 5.0 4.0 3.5

Diesel fuel 40.1 39.2 37.4 33.9 34.9

Vacuum gas oil 14.2 19.2 19.3 17.8 21.7

Fuel oil 28.0 29.2 28.6 35.2 33.8

Lubricants 4.4 3.5 3.3 2.8 2.6

Other 18.6 4.9 6.4 6.3 3.5

Petroleum product exportsfrom Russia, mln tons 14.1 16.6 20.5 25.1 25.8

Petroleum product exports by type of transport, %2004 2005 2006 2007 2008

Railroad 62.5 64.6 75.5 82.9 82.7

River 18.4 22.3 18.4 13.4 9.7

Pipeline 19.1 13.1 6.1 3.7 7.6

LUKOIL retail network* (end of year), filling stations2004 2005 2006 2007 2008

Total 5,405 5,830 5,793 6,090 6,748

Russia 1,711 1,694 1,658 1,815 2,106

Owned and leased 1,449 1,517 1,538 1,714 2,013

Franchised 262 177 120 101 93

Europe 1,171 1,578 1,654 2,041 2,399

Baltics 178 181 196 195 202

Near!abroad countries 310 412 442 461 517USA 2,035 1,965 1,843 1,578 1,524

* Owned, leased and franchised.

49

4

Average fuel sales per filling station, tons per day2004 2005 2006 2007 2008

Russia 6.4 7.6 8.1 9.4 9.8

Europe and near!abroad countries 4.4 4.9 5.5 6.8 7.4USA 8.1 8.4 8.1 7.9 6.8

Total 6.3 7.0 7.2 7.9 7.3

LUKOIL share of motor fuel market in Russian federal districts, %Share of wholesale market Share of retail market

2006 2007 2008 2006 2007 2008Central 7 7 3 6 7 10North!West 19 20 15 23 24 28Urals 17 17 12 20 19 24South 16 14 6 15 17 23Volga 24 25 13 21 21 24

LUKOIL share of motor fuel market in Russia and other countries, %Share of wholesale market Share of retail market

2006 2007 2008 2006 2007 2008Russia* 15 15 8 15 15 19Azerbaijan 24 14 18 11 10 13Belarus 29 6 19 16 20 20Belgium 0 0 0 0 9 8Bulgaria** 74 67 67 39 45 31Hungary 4 3 12 2 7 7Georgia 20 30 63 16 22 22Cyprus 8 5 4 8 9 12Lithuania 45 48 56 26 23 31Latvia 22 20 21 10 11 13Macedonia 7 19 52 0 2 8Moldova 30 37 48 32 35 40Poland 0 3 1 0 6 4Romania 19 28 23 17 25 11Serbia 15 33 41 15 14 18Slovakia 0 0 0 0 5 5USA * 0 0 0 5 5 5Turkey 0 6 7 0.3 0.2 6Ukraine 7 7 9 7 6 8Finland 0 28 28 25 24 41Croatia 0 0 3 0 0 2Montenegro 0 0 20 0 0 9Czech Republic 0 0 0 0 4 4Estonia 9 10 9 5 11 11

* Share in the regions where LUKOIL has retail business** Berofe 2008 retail market share including filling stations of Petrol!Bulgaria.

Petrochemical product sales2004 2005 2006 2007 2008

mln USD

Export and sales on international markets 1,021 1,134 1,260 1,569 1,232Domestic sales 332 469 569 733 880

Total 1,353 1,603 1,829 2,302 2,112

th. tonsExport and sales on international markets 1,575 1,414 1,395 1,449 1,062Domestic sales 541 624 639 716 767

Total 2,116 2,038 2,034 2,165 1,829

MARKETING

MARKETING

51

4


50

“Total oil” is before LUKOIL’s own consumption and transportation losses. Other figures take account of refining, transportation and storage losses as well as changes in stocks.

INTERNATIONAL

RUSSIA

3.2 mln tons

44.2 mln tons

Wholesale salesof petroleum products

Retail salesof petroleum products

1.1 mln tons

1.1 mln tons

8.2 mln tons

67.7 mln tons

0.6 mln tons

6.0 mln tons

13.3 mln tons

0.9 mln tons

77.9 mln tons

25.8 mln tons

46.6 mln tons

37.4 mln tons

2.8 mln tons

11.6 mln tons

38.7 mln tons

52.9 mln tons

39.3 mln tons

3.2 mln tons

10.4 mln tons

2.1 mln tons

1.6 mln tons

89.9 mln tons89.6 mln tons

0.2 mln tons

Total petrochemical products

Sales of petrochemical products

Exports of petrochemical products0.2 mln tons

0.8 mln tons

1.0 mln tons

Total petrochemical products

Sales of petrochemical products

Processing at petrochemical plants

Wholesale salesof petroleum products

Retail salesof petroleum products

Processing at petrochemical plants

Total petroleum products

Total petroleum products

Exports of petroleum products

Purchases of petroleum products

Refining at own refineries

Refining at third!party refineries

Oil sales

Purchases of petroleum products

Refining at own refineries

Refining at third!party refineries and ISAB Complex

Oil sales

Oil purchases

Total oil

Oil exports

Oil production

Oil purchases

Total oilOil production

TRADE BALANCE OF LUKOIL SUBSIDIARIES(2008)


52

COMPANY SHARES

0 25 50 75 100

Main shareholders of LUKOIL, %

2005

2004

2006

2007

2008

ZAO KB Citibank

ING BANK (Eurasia)

DK URALSIBSDK GARANT

National Depositary CenterDepositary!Clearing CompanyBrunswick UBS Warburg

Main common shareholders (end of year), shares

Shareholder’s name 2004 2005 2006 2007 2008

ING BANK (Eurasia)* (ADRs and GDRs) 535,975,699 552,427,066 548,189,159 600,052,544 585,245,353

ZAO KB Citibank* 66,322,006 68,313,541 67,149,334 67,431,596 69,274,981

Depositary!Clearing Company* 17,982,613 19,159,472 39,104,964 60,124,748 67,184,973

National Depositary Center* 22,056,584 14,736,859 29,692,658 32,607,234 48,689,475

SDK GARANT* 87,986,591 83,105,166 74,002,498 35,375,790 31,028,284

DK URALSIB* 69,560,926 74,802,000 60,529,689 20,667,261 19,627,533

Brunswick UBS Warburg* 4,843,084 – – – –

State ownership – – – – –

*Nominee.

LUKOIL common share price on the RTS, USD

2003 2004 2005

min max end min max end min max end

1Q 13.77 15.86 13.80 23.85 31.05 31.05 28.90 34.95 33.85

2Q 13.90 19.75 19.75 24.55 33.15 26.30 31.65 36.85 36.78

3Q 16.70 20.60 20.60 25.72 31.70 31.00 37.50 57.75 57.75

4Q 19.25 24.10 23.25 26.25 33.00 30.35 51.05 61.60 59.40

LUKOIL share capital

Common Change, y!o!y shares

December 31, 2002 850,563,255

No changes

December 31, 2003 850,563,255

No changes

December 31, 2004 850,563,255

No changes

December 31, 2005 850,563,255

No changes

December 31, 2006 850,563,255

No changes

December 31, 2007 850,563,255

No changes

December 31, 2008 850,563,255

FINANCE

53

5

LUKOIL market capitalization (end of year)

2004 2005 2006 2007 2008

Common share priceon the RTS, USD 30.35 59.40 87.95 87.00 32.00

Number of common shares,mln shares 850.6 850.6 850.6 850.6 850.6

Market capitalization,mln USD 25,815 50,523 74,807 73,999 27,218

20082004 2005 2006 20070

30

60

120

90

Share of LUKOIL stocks intotal MICEX volumes, %

0 5 10 15 20 25

2008

2004

2005

2006

8.1

14.6

21.8

12.7

2007

12.8

LUKOIL market capitalization(end of year), bln USD

0 20 40 60 80

2008

2004

2005

2006 74.8

50.5

25.8

2007 74.0

27.2

LUKOIL common share price on the RTS, USD

2006 2007 2008

min max end min max end min max end

1Q 59.40 86.45 83.20 76.00 86.50 86.40 64.40 87.00 85.50

2Q 63.00 94.80 83.60 72.80 86.00 76.70 83.00 113.20 98.20

3Q 72.15 92.60 76.20 71.90 85.90 83.30 55.00 98.40 59.45

4Q 71.50 91.80 87.95 82.00 95.00 87.00 24.90 58.00 32.00

LUKOIL share performance and the RTS Index (based on daily changes)

2004 2005 2006 2007 2008 2004–2008

LUKOIL standard deviation, % 2.23 1.69 2.62 1.84 4.69 3.04

RTS standard deviation, % 1.88 1.27 2.01 1.38 3.42 2.28

Correlation 0.878 0.891 0.908 0.880 0.905 0.898

Beta coefficient 1.042 1.188 1.182 1.169 1.240 1.195


54

LUKOIL share price and the RTS Index, %

20

50

80

110

140

2008

LUKOIL RTS

jan feb mayaprmar sepjul augjun oct nov dec

2006

100

120

140

160

180

jan jun decfeb mayaprmar sepjul aug oct nov

2005

jan jun decfeb mayaprmar sepjul aug oct nov90

110

130

150

170

190

2102004

jan jun decfeb mayaprmar sepjul aug oct nov90

100

110

120

130

140

150

2007

100

120

140

160

180

jan jun decfeb mayaprmar sepjul aug oct nov

55

FINANCE

5

Tickers of LUKOIL common shares

Ticker Market

LKOH RTS (Russian Trading System)

LKOH MICEX (Moscow Interbank Currency Exchange)

LKOD LSE (London Stock Exchange)*

LUK FSE (Frankfurt Stock Exchange)*

LUKOY US OTC (US over!the!counter market)*

* ADRs on LUKOIL shares.

Distribution of trading in LUKOILshares and depositary receipts (2008)

RTS (0.9%)

MICEX (40.1%)

US OTC market (3.4%)

LSE (55.6%)

LSE RTSMICEX US OTC market

0

20

60

34.2435.46

38.76

21.9019.90

9.6511.29

9.7510.298.37

28.42

33.36

36.3740

32.8934.09

12.73

17.37

50.45

54.17

38.90 1

Q 2

008

2Q 2

008

3

Q 2

008

4Q 2

008

1Q

200

4

1Q

200

5

1Q

200

6

1Q

200

7

2Q

200

5

2Q 2

004

2Q

200

7

2Q 2

006

3Q 2

004

4Q 2

004

3Q 2

005

4Q 2

005

3Q 2

006

4Q 2

006

3Q 2

007

4Q 2

007

Share of common shares convertedinto ADRs and GDRs, %

69.64

63.84

64.30

62.32

68.04

0 20 40 60 80

2008

2004

2005

2006

2007

Share of LUKOIL ADRs inLSE trading of foreign stocks(IOB system), %

0 5 10 15 20 25

2008

2004

2005

2006

17

2007

24

25

20

16

LUKOIL International oil & gas majors

20082004 2005 2006 20070

100

200

300

400

500

Volume of trading in LUKOIL shares and ADRs, bln USD

LUKOIL share performance compared with internationaloil & gas majors (2004–2008), %


56

MACROECONOMIC AND TAX ENVIRONMENT

Dividend per common share, RUR

0 18 36 54

2008

38.0

33.0

28.0

50.0

42.02007

2004

2005

2006

Dividend yield, %

0.0 1.2 2.4 3.6

2008

2004

2005

2006

2.0

1.7

2.8

3.4

2007

2.8

Total shareholders’ return, %

!80 !60 !40 !20 0 20 40 60 80 100

2008

2004

2005

2006 50.1

99.0

34.1

!61.2

2007 0.6

15% 20% 25% 30%

Dividends accrued on common stock,mln USD and as % of net income inthe respective period, %

0 400 800 1,200 1,600

2008

2004

2005

2006

1,223

1,009

795

681

2007

1,510

LUKOIL dividend policy

2004 2005 2006 2007 2008

Dividend per commonshare, RUR. 28.0 33.0 38.0 42.0 50.0

Dividends accrued forthe previous year, mln USD 681 795 1,009 1,223 1,510

Dividend payments,mln USD 612 800 1,015 1,230 1,437Dividend yield, %* 2.9 1.3 1.8 2.1 2.8* Dividend yield is calculated based on the average market price for LUKOIL shares and average exchangerate for the year the dividens are paid for.

Crude oil and petroleum product prices2004 2005 2006 2007 2008

USD per barrelBrent crude 38.27 54.31 65.16 72.39 97.26Urals crude (CIF Mediterranean) 34.50 50.67 61.37 69.38 94.76Urals crude (CIF Rotterdam) 34.13 50.12 61.23 69.16 94.83

USD per tonFuel oil 3.5% (FOB Rotterdam) 151.81 229.92 286.91 339.00 459.74Diesel fuel (FOB Rotterdam) 349.37 505.01 577.92 634.09 901.53High!octane gasoline (FOB Rotterdam) 400.33 534.11 619.29 695.97 836.79

Macroeconomic environment2004 2005 2006 2007 2008

Rouble inflation (CPI), % 11.7 10.9 9.1 11.9 13.3

Nominal appreciation of the roubleagainst US dollar, % 5.8 (3.7) 8.5 6.8 (19.7)

Real appreciation of the roubleagainst US dollar, % 18.5 6.9 19.3 20.0 17.4

Average exchange ratefor the period, RUR/USD 28.82 28.29 27.19 25.58 24.86

Exchange rate at the end ofthe period, RUR/USD 27.75 28,78 26.33 24.55 29.38

FINANCE

57

5

Average rates of main taxes levied on oil companies in the Russian Federation

2004 2005 2006 2007 2008Corporate income tax % 24 24 24 24 24Corporate property tax % 2.2 2.2 2.2 2.2 2.2 Value added tax % 18 18 18 18 18Unified social tax % 35.6 26.0 26.0 26.0 26.0Mineral extraction tax (MET) (oil) RUR/ton 1,052.8 1,876.3 2,265.7 2,472.7 3,328.4MET (natural gas) RUR/th. cubic meters 107 135 147 147 147Oil export tariff USD/ton 55.8 130.6 197.0 206.7 355.1Natural gas export tariff % 30 30 30 30 30Petroleum product export tariffs

Light distillates, medium distillates and gas oil USD/ton 37.93 92.26 143.40 151.59 251.53Liquid fuel USD/ton 36.64 52.73 77.27 81.64 135.51

Petroleum product excisesHigh!octane gasoline RUR/ton 3,360 3,629 3,629 3,629 3,629Low!octane gasoline RUR/ton 2,460 2,657 2,657 2,657 2,657Diesel fuel RUR/ton 1,000 1,080 1,080 1,080 1,080Motor oils RUR/ton 2,732 2,951 2,951 2,951 2,951

Income tax payment by LUKOIL, mln USD2004 2005 2006 2007 2008

Current income tax 1,614 2,301 2,906 3,410 4,167Russia 1,511 2,194 2,419 2,940 3,614Abroad 103 107 487 470 553

Deferred income tax 146 166 (133) 97 (945)Russia 76 61 (40) 135 (754)Abroad 70 105 (93) (38) (191)

Total income tax expense 1,760 2,467 2,773 3,507 3,222

Payment of taxes other than income taxes, mln USD2004 2005 2006 2007 2008

Mineral extraction tax 2,971 5,590 7,281 8,482 12,267Social taxes and contributions 330 324 356 442 512Property tax 111 233 247 313 405Other taxes and contributions 93 187 191 130 280Total taxes other than income tax 3,505 6,334 8,075 9,367 13,464

Excises and export tariffs, mln USD2004 2005 2006 2007 2008

In Russia 3,460 7,244 10,724 11,548 16,986Excise tax and sales taxes on refined products 547 654 610 734 956Export tariffs 2,913 6,590 10,114 10,814 16,030

International 1,788 2,687 2,846 3,485 4,354Excise tax and sales taxes on refined products 1,774 2,679 2,835 3,468 3,984Export tariffs 14 8 11 17 370

Total 5,248 9,931 13,570 15,033 21,340Excise tax and sales taxes on refined products 2,321 3,333 3,445 4,202 4,940Export tariffs 2,927 6,598 10,125 10,831 16,400

Tax burden of LUKOIL Group2004 2005 2006 2007 2008

Share of total taxes in sales after cost ofpurchased crude oil and petroleum products, % 44.3 51.8 54.2 51.8 54.5Share of total taxes and contributionsin income before their payment, % 71.2 74.4 76.5 74.6 80.6


58

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated income statements, mln USD

2004 2005 2006 2007 2008

REVENUES

Sales (including excise and export tariffs) 33,845 55,774 67,684 81,891 107,680

COSTS AND OTHER DEDUCTIONS

Operating expenses (2,880) (3,443) (4,652) (6,172) (8,126)

Cost of purchased crude oil, gas and products (10,124) (19,590) (22,642) (27,982) (37,851)

Transportation expenses (2,784) (3,371) (3,600) (4,457) (5,460)

Selling, general and administrative expenses# (2,024) (2,578) (2,885) (3,207) (3,860)

Depreciation, depletion and amortization (1,075) (1,315) (1,851) (2,172) (2,958)

Taxes other than income taxes (3,505) (6,334) (8,075) (9,367) (13,464)

Excise and export tariffs (5,248) (9,931) (13,570) (15,033) (21,340)

Exploration expenses (171) (317) (209) (307) (487)

(Loss) gain on disposals and impairments of assets (213) 52 (148) (123) (425)

Income from operating activities 5,821 8,947 10,052 13,071 13,709

Interest expense (300) (275) (302) (333) (391)

Interest and dividend income 180 96 111 135 163Equity share in income of affiliates 213 441 425 347 375

Currency translation gain (loss 135 (134) 169 93 (1,163)

Other non!operating (expense) income 21 (44) (118) (240) (244)

Minority interest (62) (121) (80) (55) (83)

Income before income taxes 6,008 8,910 10,257 13,018 12,366

Current income taxes (1,614) (2,301) (2,906) (3,410) (4,167)

Deferred income taxes (146) (166) 133 (97) 945

Total income tax expense (1,760) (2,467) (2,773) (3,507) (3,222)

Net income 4,248 6,443 7,484 9,511 9,144

Net income per common share (USD)

Basic 5.20 7.91 9.06 11.48 10.88

Diluted 5.13 7.79 9.04 11.48 10.88

FINANCE

59

5

Consolidated balance sheet (as of December 31), mln USD

2003 2004 2005 2006 2007 2008A S S E T S

Current assets

Cash and cash equivalents 1,435 1,257 1,650 752 841 2,239

Short!term investments 251 149 111 44 48 505

Accounts and notes receivable, net 3,790 3,867 5,533 5,158 7,467 5,069

Inventories 1,243 1,759 2,619 3,444 4,609 3,735

Prepaid taxes and other expenses 897 1,242 2,107 3,693 4,109 3,566

Other current assets 255 300 287 406 625 519

Assets held for sale 52 – 190 75 70 –

Total current assets 7,923 8,574 12,497 13,572 17,769 15,633

Investments 594 779 1,110 1,442 1,086 3,269

Property, plant and equipment 16,859 19,329 25,464 31,316 38,056 50,088

Deferred income tax assets 117 138 181 362 490 521

Goodwill and other intangible assets 523 610 680 791 942 1,159

Other non!current assets 558 331 413 754 1,289 791

Total assets 26,574 29,761 40,345 48,237 59,632 71,461

L I A B I L I T I E S A N D S T O C K H O L D E R S ’ E Q U I T Y

Current liabilities

Accounts payable 1,564 1,787 2,167 2,759 4,554 5,029

Short!term borrowings and currentportion of long!term deb 1,412 1,265 853 1,377 2,214 3,232

Customer deposits and other borrowingsof banking subsidiaries 1,007 3 – – – –

Taxes payable 943 1,238 2,087 1,663 2,042 1,564

Other current liabilities 345 252 729 1,132 918 750

Total current liabilities 5,271 4,545 5,836 6,931 9,728 10,575

Long!term debt 2,392 2,609 4,137 4,807 4,829 6,577

Deferred income tax liabilities 497 698 1,830 2,116 2,079 2,116

Asset retirement obligations 210 307 387 608 811 718

Other long!term liabilities 249 338 332 352 395 465

Minority interest in subsidiary companies 483 453 1,019 523 577 670

Total liabilities 9,102 8,950 13,541 15,337 18,419 21,121

Stockholders’ equity

Common stock 15 15 15 15 15 15

Treasury stock, at cost (435) (706) (527) (1,098) (1,591) (282)

Additional paid!in capital 3,522 3,564 3,730 3,943 4,499 4,694

Retained earnings 14,371 17,938 23,586 30,061 38,349 45,983

Accumulated other comprehensive loss (1) – – (21) (59) (70)

Total stockholders’ equity 17,472 20,811 26,804 32,900 41,213 50,340

Total liabilities and stockholders’ equity 26,574 29,761 40,345 48,237 59,632 71,461


60

Consolidated statements of cash flows, mln USD

2004 2005 2006 2007 2008CASH FLOWS FROM OPERATING ACTIVITIESNet income 4,248 6,443 7,484 9,511 9,144

Adjustments for non!cash items:Depreciation, depletion and amortization 1,075 1,315 1,851 2,172 2,958

Equity share in income of affiliates, net of dividends received (169) (397) (106) 209 (238)

Dry hole write-offs 42 170 91 143 317

(Loss (gain) on disposals and impairments of assets 213 (52) 148 123 425

Deferred income taxes 146 166 (133) 97 (945)

Non!cash currency translation loss (gain) (4) (26) 86 193 (423)

Non!cash investing activities (123) (133) (123) (36) (29)

All other items – net 97 258 89 297 404

Changes in operating assets and liabilities:Accounts and notes receivable (795) (1,337) 388 (2,297) 2,647

Inventories (571) (735) (816) (1,148) 963

Accounts payable 306 245 592 1,599 (989)

Taxes payable 310 705 (430) 386 (521)

Other current assets and liabilities (595) (418) (1,355) (368) 599

Net cash provided by operating activities 4,180 6,204 7,766 10,881 14,312

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of licenses – (3) (7) (255) (12)

Capital expenditures (3,248) (3,979) (6,419) (9,071) (10,525)

Proceeds from sale of property, plant and equipment 99 51 310 72 166

Purchases of investments (540) (242) (312) (206) (398)

Proceeds from sale of investments 242 234 216 175 636

Sale of interests in subsidiaries and affiliated companies 183 588 71 1 136 3

Acquisitions of subsidiaries and minority shareholding interest (including advances related to these acquisitions), net of cashacquired (477) (2,874) (1,374) (1,566) (3,429)

Net cash used in investing activities (3,741) (6,225) (7,515) (9,715) (13,559)

CASH FLOWS FROM FINANCING ACTIVITIES

Net movements of short!term borrowings (170) (638) 700 (59) 974

Cash received under sales!leaseback transaction – – – – 235

Proceeds from issuance of long!term debt 1,191 2,474 1,092 2,307 2,884

Principal repayments of long!term debt (778) (704) (1,077) (1,632) (1,547)

Dividends paid (661) (853) (1,134) (1,308) (1,605)

Dividends paid on company common stock (612) (800) (1,015) (1,230) (1,437)

Dividends paid to minority (49) (53) (119) (78) (168)

Financing from related party and third party minority shareholders – 101 – 177 39

Purchase of treasury stock (502) – (782) (712) (219)

Proceeds from sale of treasury stock 273 46 – 129 –

Other – net (3) 6 15 – 2

Net cash (used in) provided by financing activities (650) 432 (1,186) (1,098) 763

Effect of exchange rate changes on cashand cash equivalents 33 (18) 37 21 (118)

Net (decrease) increase in cash and cash equivalents (178) 393 (898) 89 1,398

Cash and cash equivalents at beginning of year 1,435 1,257 1,650 752 841

Cash and cash equivalents at end of year 1,257 1,650 752 841 2,239

Consolidated statements of stockholders’ equity and comprehensive income, mln USD

2004 2005 2006 2007 2008

Common stock

Balance as of January 1 15 15 15 15 15

Balance as of December 31 15 15 15 15 15

Treasury stock

Balance as of January 1 (435) (706) (527) (1,098) (1,591)

Stock purchased (502) – (782) (712) (219)

Stock disposed 231 179 211 219 1,528

Balance as of December 31 (706) (527) (1,098) (1,591) (282)

Additional paid!in capital

Balance as of January 1 3,522 3,564 3,730 3,943 4,499

Premium on non!outstanding shares issued – 47 22 – 20

Effect of stock compensation plan – – – 103 103

Proceeds from sale of treasury stock in excessof carrying amount 42 119 191 453 72

Balance as of December 31 3,564 3,730 3,943 4,499 4,694

Retained earnings

Balance as of January 1 14,371 17,938 23,586 30,061 38,349

Net income (comprehensive income) 4,248 6,443 7,484 9,511 9,144

Net income (stockholders’ equity) 4,248 6,443 7,484 9,511 9,144

Dividends on common stock (681) (795) (1,009) (1,223) (1,510)

Balance as of December 31 17,938 23,586 30,061 38,349 45,983

Accumulated other comprehensive loss, net of tax

Balance as of January 1 (1) – – (21) (59)

Foreign currency translation adjustment(comprehensive income) 1 – – – –

Foreign currency translation adjustment(stockholders’ equity) 1 – – – –

Pension benefits:

Prior service cost (comprehensive income) – – – (16) (5)

Prior service cost (stockholders' equity) – – – (16) (5)

Actuarial loss (comprehensive income) – – – (22) (6)

Actuarial loss (stockholders' equity) – – – (22) (6)

Effect of initial adoption of SFAS No. 158 – – (21) – –

Balance as of December 31 – – (21) (59) (70)

Total comprehensive income for the year 4,249 6,443 7,484 9,473 9,133

Total stockholders’ equity as of December 31 20,811 26,804 32,900 41,213 50,340

FINANCE

61

5


62

Share activity, mln shares2004 2005 2006 2007 2008

Common stock, issued

Balance as of January 1 850.563 850.563 850.563 850.563 850.563

Balance as of December 31 850.563 850.563 850.563 850.563 850.563

Treasury stock

Balance as of January 1 (26.336) (33.884) (21.667) (23.632) (23.321)

Purchase of treasury stock (17.846) – (9.017) (8.756) (2.899)

Disposal of treasury stock 10.298 12.217 7.052 9.067 22.384

Balance as of December 31 (33.884) (21.667) (23.632) (23.321) (3.836)

Capital expenditures*, mln USD2004 2005 2006 2007 2008

Capital expenditures

Exploration and production 2,289 2,918 5,120 7,262 7,889

Russia 2,100 2,487 4,334 6,391 6,813

International 189 431 786 871 1,076

Refining, marketing and distribution 1,070 1,129 1,475 1,822 2,150

Russia 677 654 916 1,177 1,377

International 393 475 559 645 773

Chemicals 71 77 172 171 121

Russia 55 59 121 73 23


Other 17 53 119 117 429

Total capital expenditures 3,447 4,177 6,886 9,372 10,589

Acquisitions of companies and Group investments**

Exploration and production 166 2,737 1,560 434 361

Russia 23 778 1,469 77 4

International 143 1,959 91 357 357

Refining, marketing and distribution 306 256 122 1,196 2,033

Russia 1 27 122 685 636

International 305 229 – 511 1,397

Chemicals – – – – –

Other 5 – 32 38 3,194***

Less cash acquired – (119) (26) (102) (190)

Total acquisitions of companies and Group investments 477 2,874 1,688 1,566 5,398

* Including non!cash transactions.

** Including prepayments related to acquisitions of subsidiaries and buyout of minorities.

*** Including $1,969 million of non!cash part of consideration for acquisition of TGK!8.

63

Specific financial ratios2004 2005 2006 2007 2008

Sales per boe of production*, USD per barrel 50.9 80.0 86.4 103.0 134.1Income from operating activities perboe of production*, USD per barrel 8.8 12.8 12.8 16.4 17.1EBITDA per boe of production*, USD per barrel 10.8 14.9 15.7 19.4 19.4Net income per boe of production*, USD per barrel 6.4 9.2 9.6 12.0 11.4Capital expenditures in exploration and productionper boe of production*, USD per barrel 3.4 4.2 6.5 9.1 9.8Capitalization per boe of reserves, USD per barrel 1.3 2.5 3.7 3.6 1.4Capitalization per boe of production*, USD per barrel 38.8 72.5 95.5 93.1 33.9* Of marketable hydrocarbons.

Profitability and efficiency ratiosIncome margin

2004 2005 2006 2007 2008Sales, mln USD 33,845 55,774 67,684 81,891 107,680Income from operating activities, mln USD 5,821 8,947 10,052 13,071 13,709

Income before taxes, mln USD 6,008 8,910 10,257 13,018 12,366

Net income, mln USD 4,248 6,443 7,484 9,511 9,144

Operating margin, % 17.2 16.0 14.9 16.0 12.7Pretax margin, % 17.8 16.0 15.2 15.9 11.5Net margin, % 12.6 11.6 11.1 11.6 8.5

EBIT and EBITDA

2004 2005 2006 2007 2008 Income before taxes, mln USD 6,008 8,910 10,257 13,018 12,366

Interest expense, mln USD 300 275 302 333 391

Interest and dividend income, mln USD. 180 96 111 135 163

EBIT, mln USD 6,128 9,089 10,448 13,216 12,594

Depreciation, depletion and amortization, mln USD 1,075 1,315 1,851 2,172 2,958

EBITDA, mln USD 7,203 10,404 12,299 15,388 15,552

EBIT margin, % 18.1 16.3 15.4 16.1 11.7

EBITDA margin, % 21.3 18.7 18.2 18.8 14.4

FINANCIAL RATIOS

EBIT = Income before income tax + Interest expense – Interest and dividend incomeEBITDA = EBIT + Depreciation, depletion and amortization

Income margin =Sales

Income

5

Net margin, %

20082004 2005 2006 20077

9

11

13

Market capitalization to provedhydrocarbon reserves, USD per boe

0

1

2

4

3

20082004 2005 2006 2007

Net income to production, USD per boe

20082004 2005 2006 20072

4

6

8

10

12

FINANCE


64

Return on equity

2003 2004 2005 2006 2007 2008

Equity, mln USD 17,472 20,811 26,804 32,900 41,213 50,340


Return on equity, % 22.2 27.1 25.1 25.7 20.0

Return on assets

2003 2004 2005 2006 2007 2008

Assets, mln USD 26,574 29,761 40,345 48,237 59,632 71,461


Return on assets, % 15.1 18.4 16.9 17.6 14.0

Return on non!current assets

2003 2004 2005 2006 2007 2008

Non!current assets, mln USD 18,651 21,187 27,848 34,665 41,863 55,828


Return on non!current assets, % 21.3 26.3 23.9 24.9 18.7

Return on assets =Average assets for the year

Net income

Return on non!current assets =Average non!current assets for the year

Net income

10

15

20

25

ROACE, %

20082004 2005 2006 2007200

300

350

20082004 2005 2006 2007

Assets turnover, days

250

20082004 2005 2006 2007

Turnover of accounts receivableand accounts payable, days

0

15

45

30

60

Accounts payableAccounts receivable

Return on equity =Average equity for the year

Net income

10

20

25

30

Return on equity, %

15

20082004 2005 2006 200710

15

20

25

30

20082004 2005 2006 2007

Return on non!current assets, %Return on assets, %

5

10

15

20

20082004 2005 2006 2007

65

ROACE

2003 2004 2005 2006 2007 2008

Equity, mln USD 17,472 20,811 26,804 32,900 41,213 50,340

Long!term debt, mln USD 2,392 2,609 4,137 4,807 4,829 6,577

Short!term debt, mln USD 1,412 1,265 853 1,377 2,214 3,232

Minority interest in subsidiarycompanies, mln USD 483 453 1,019 523 577 670



Minority interest, mln USD 62 121 80 55 83

Effective income tax rate*, % 29.0 27.3 26.8 26.8 25.9

ROACE, % 19.3 23.3 21.5 22.2 17.4

* Income taxes to income before income taxes before deduction of minority interest.

Assets turnover (as of December 31)

2003 2004 2005 2006 2007 2008

Sales, mln USD 33,845 55,774 67,684 81,891 107,680

Assets, mln USD 26,574 29,761 40,345 48,237 59,632 71,461

Asset turnover, days 305 229 239 240 222

Accounts payable turnover (as of December 31)

2003 2004 2005 2006 2007 2008

Sales, mln USD 33,845 55,774 67,684 81,891 107,680

Accounts payable, mln USD 1,564 1,787 2,167 2,759 4,554 5,029

Accounts payable turnover, days 18 13 13 16 16

Accounts receivable turnover (as of December 31)

2003 2004 2005 2006 2007 2008

Sales, mln USD 33,845 55,774 67,684 81,891 107,680

Accounts receivable, mln USD 3,790 3,867 5,533 5,158 7,467 5,069

Accounts receivable turnover, days 41 31 29 28 21

Accounts payable turnover =Sales

Average accounts payable " 365 days

Accounts receivable turnover =Sales

Average accounts receivable " 365 days

Asset turnover =Sales

Average assets for the year " 365 days

ROACE =Average for the year (Equity + Long!term debt + Short!term debt + Minority interest)

Net income + Interest expense " (1 – Effective income tax rate) + Minority interest

5

FINANCE

Gearing ratios

Total debt to total capital (as of December 31)

2004 2005 2006 2007 2008

Total debt, mln USD 3,877 4,990 6,184 7,043 9,809

Equity, mln USD 20,811 26,804 32,900 41,213 50,340

Total capital, mln USD 24,688 31,794 39,084 48,256 60,149

Total debt to total capital, % 15.7 15.7 15.8 14.6 16.3

Total debt to equity (as of December 31)

2004 2005 2006 2007 2008


Equity, mln USD 20,811 26,804 32,900 41,213 50,340

Total debt to equity, % 18.6 18.6 18.8 17.1 19.5

Total debt to EBITDA (as of December 31)

2004 2005 2006 2007 2008


EBITDA, mln USD 7,203 10,404 12,299 15,388 15,552

Total debt to EBITDA, % 53.8 48.0 50.3 45.8 63.1

Financial guarantees, mln USD 642 473 418 361 161

Adjusted total debt,mln USD 4,519 5,463 6,602 7,404 9,970

Adjusted total debtto EBITDA, % 62.7 52.5 53.7 48.1 64.1

Short!term debt to total debt (as of December 31)

2004 2005 2006 2007 2008

Short!term debt, mln USD 1,265 853 1,377 2,214 3,232


Short!term debtto total debt, % 32.6 17.1 22.3 31.4 32.9

Secured debt to total debt (as of December 31)

2004 2005 2006 2007 2008

Secured debt, mln USD 2,171 1,672 715 378 453


Secured debt to total debt, % 56.0 33.5 11.6 5.4 4.6


66

20082004 2005 2006 2007

Total debt to total capital, %

14

15

20

25

35

30

20082004 2005 2006 2007

Adjusted total debt to EBITDA, %

50

0

100

250

200

350

300

150

20082004 2005 2006 2007

Short!term debt to total debt, %

15

25

35

45

67

Financial guarantees to adjusted total debt (as of December 31)2004 2005 2006 2007 2008


Adjusted total debt, mln USD 4,519 5,463 6,602 7,404 9,970

Financial guarantees to adjusted total debt, % 14.2 8.7 6.3 4.9 1.6

Fixed debt to total debt* (as of December 31)2004 2005 2006 2007 2008

Fixed debt, mln USD 1,074 907 2,214 3,947 4,440

Total debt*, mln USD 3,874 4,990 6,184 7,043 9,809

Fixed debt tototal debt, % 27.7 18.2 35.8 56.0 45.3

* Excluding liabilities of banking subsidiaries.

Net debt (as of December 31)

2004 2005 2006 2007 2008 Long!term debt, mln USD 2,609 4,137 4,807 4,829 6,577


Customer deposits and otherborrowings of banking subsidiaries, mln USD 3 0 0 0 0

Cash and cash equivalents, mln USD 1,257 1,650 752 841 2,239

Net debt, mln USD 2,620 3,340 5,432 6,202 7,570

Cash of banking subsidiaries in roublesand other currencies, mln USD 176 102 130 47 132


Adjusted net debt, mln USD 3,438 3,915 5,980 6,610 7,863

Net debt to equity (as of December 31)2004 2005 2006 2007 2008

Net debt, mln USD 2,620 3,340 5,432 6,202 7,570

Equity, mln USD 20,811 26,804 32,900 41,213 50,340

Net debt to equity, % 12.6 12.5 16.5 15.0 15.0

Adjusted net debt, mln USD 3,438 3,915 5,980 6,610 7,863

Adjusted net debt to equity, % 16.5 14.6 18.2 16.0 15.6

20082004 2005 2006

Secured debt to total debt, %

0

20

40

60

2007 2004 2005 2006 2007

Financial guarantees to adjustedtotal debt, %

3

0

6

9

15

2008

12

20082004 2005 2007

Fixed debt to total debt*, %

152025

404550

6055

3530

2006

Net debt = Long!term debt + Customer deposits of banking subsidiaries + Short!term debt – Cash

5

* Excluding liabilities of banking subsidiaries.

FINANCE


68

Net debt to cash flow from operating activities (as of December 31)2004 2005 2006 2007 2008

Net debt, mln USD 2,620 3,340 5,432 6,202 7,570

Cash flow from operatingactivities, mln USD 4,180 6,204 7,766 10,881 14,312

Net debt to cash flowfrom operating activities, % 62.7 53.8 71.1 57.0 52.9Adjusted net debt, mln USD 3,438 3,915 5,980 6,610 7,863Adjusted net debt to cash flowfrom operating activities, % 82.2 63.1 78.3 60.7 54.9

EBITDA interest coverage2004 2005 2006 2007 2008

EBITDA, mln USD 7,203 10,404 12,299 15,388 15,552Interest expense, mln USD. 300 275 302 333 391EBITDA interest coverage 24.0 37.8 40.7 46.2 39.8

Free cash flow2004 2005 2006 2007 2008


Capital expenditures*, mln USD 3,248 3,982 6,426 9,326 10,537Free cash flow, mln USD 932 2,222 1,340 1,555 3,775* Including acquisition of licenses.

20082004 2005 2006 2007

Net debt to cash flow fromoperating activities, %

40

70

100

130

20082004

Structure of cash flow fromoperating activities, bln USD

0

3

6

9

12

15

20072005 2006

Free cash flowCapital expenditures

10

20

40

0

50

20082004 2005 2006 2007

EBITDA interest coverage

30

Net debt, bln USD

2

4

6

8

2004 2005 2006 2007 2008

Adjusted net debt to equity, %

10

20

50

60

40

30

2004 2005 2006 2007 2008

69

Liquidity ratios

Cash ratio (as of December 31)

2004 2005 2006 2007 2008 Cash and cash equivalents,mln USD 1,257 1,650 752 841 2,239

Current liabilities, mln USD 4,545 5,836 6,931 9,728 10,575

Cash ratio 0.28 0.28 0.11 0.09 0.21

Quick ratio (as of December 31)

2004 2005 2006 2007 2008

Cash and cash equivalents,mln USD 1,257 1,650 752 841 2,239

Short!term investments,mln USD 149 111 44 48 505

Accounts receivable, mln USD 3,867 5,533 5,158 7,467 5,069


Quick ratio 1.16 1.25 0.86 0.86 0.74

Current ratio (as of December 31)

2004 2005 2006 2007 2008 Current assets, mln USD 8,574 12,497 13,572 17,769 15,633


Current ratio 1.89 2.14 1.96 1.83 1.48

Assets to equity (as of December 31)2004 2005 2006 2007 2008

Assets, mln USD 29,761 40,345 48,237 59,632 71,461

Equity, mln USD 20,811 26,804 32,900 41,213 50,340

Assets to equity 1.43 1.51 1.47 1.45 1.42

Cash ratio

0.05

0.10

0.15

0.20

0.25

0.30

20082004 2005 2006 20071.2

1.4

2.0

2.2

Current ratio

1.6

1.8

20082004 2005 2006 20071.40

1.45

1.50

1.55

1.60

Assets to equity

20082004 2005 2006 2007

Quick ratio =Current liabilities

Cash + Short!term investments + Accounts and notes receivable

Current ratio =Current liabilities

Current assets

Cash ratio =Current liabilities

Cash and cash equivalents

5

FINANCE


70

Market valuation of the Company

Enterprise value (EV) (as of December 31)

2004 2005 2006 2007 2008

Market capitalization, mln USD 25,815 50,523 74,807 73,999 27,218

Long!term debt, mln USD 2,609 4,137 4,807 4,829 6,577


Cash and cash equivalents,mln USD. 1,257 1,650 752 841 2,239

EV, mln USD 28,432 53,863 80,239 80,201 34,788

EV/EBITDA (as of December 31)

2004 2005 2006 2007 2008

EV, mln USD 28,432 53,863 80,239 80,201 34,788

EBITDA, mln USD 7,203 10,404 12,299 15,388 15,552

EV/EBITDA 3.95 5.18 6.52 5.21 2.24

EV/DACF (as of December 31)

2004 2005 2006 2007 2008

EV, mln USD 28,432 53,863 80,239 80,201 34,788



Interest expense adjusted by effectiveincome tax rate, mln USD 213 200 221 244 290

DACF, mln USD 4,393 6,404 7,987 11,125 14,602

EV/DACF 6.5 8.4 10.0 7.2 2.4

EV/DACF = Cash flow from operating activities + Interest expense adjusted for income tax

EV

EV = Market capitalization + Long!term debt + Short!term debt – Cash

0

20

60

80

100

40

EV, bln USD

20082004 2005 2006 20072

3

5

6

7

20082004 2005 2006 2007

4

EV/EBITDA

20082004 2005 2006 2007

EV/DACF

2

8

11

5

71

Price to earnings (P/E) (as of December 31)

2004 2005 2006 2007 2008

Share price, USD 30.35 59.40 87.95 87.00 32.00

Basic earnings per share, USD 5.20 7.91 9.06 11.48 10.88

#/E 5.84 7.51 9.71 7.58 2.94

Price to sales (P/S) (as of December 31)

2004 2005 2006 2007 2008


Sales, mln USD 33,845 55,774 67,684 81,891 107,680

Price to sales 0.76 0.91 1.11 0.90 0.25

Price to assets (as of December 31)

2004 2005 2006 2007 2008


Assets, mln USD 29,761 40,345 48,237 59,632 71,461

Price to assets 0.87 1.25 1.55 1.24 0.38

Price to book (P/B) (as of December 31)

2004 2005 2006 2007 2008


Equity, mln USD 20,811 26,804 32,900 41,213 50,340

Price to book 1.24 1.88 2.27 1.80 0.54

1

4

7

10

20082004 2005 2006 2007

$/% Market capitalization to sales

0

0.4

1.2

0.8

20082004 2005 2006 2007

Market capitalization to equity

0.5

1.0

1.5

2.5

2.0

20082004 2005 2006 2007 5

FINANCE


72

Exploration and production

2D seismic survey – study of strata formation using a system of sensors and explosive devices to obtain a two!dimensional

strata model. In 2D exploration, sensors are placed along certain lines (sections) and the study is carried out along the depth

of the section.

3D seismic survey – study of strata formation using a system of sensors and explosive devices to obtain a three!dimensional

strata model. In 3D exploration, the sensors are placed over the surface of the relevant area. This is one of the most accurate

geophysical techniques, but requires major IT resources and other equipment and expenses. Therefore oil & gas companies

usually carry out 2D seismic in order to ascertain which zones are most deserving of 3D studies.

Vertical seismic profiling (VSP) – a seismic exploration method, which details structure of the space around the well, defines

the nature of geological sections, which are penetrated, and provides a speed model of the environment and level of oil sat!

uration in strata. VSP is carried out by creation of waves on the surface, which are captured in the well by seismic receptors

placed at various depths, and by subsequent study of the results.

Geo!electrics (electromagnetic exploration) – a technique of finding mineral deposits by studying the earth's electromag!

netic fields.

Flow rate of a well – quantity of hydrocarbons obtained from a well in a given period of time (usually one day).

Watercut – quantity of water in mixture extracted from an oil well (usually expressed as a percentage).

Associated petroleum gas – mixture of various gaseous hydrocarbons, dissolved in crude oil, which separate out in the

production and refining processes (mainly consist of propane and butane). Associated petroleum gas can be used as a fuel

and for production of various chemicals.

Natural gas – mixture of gaseous hydrocarbons, whose main component is methane. Natural gas is located in strata in a

gaseous state, either as gas deposits or as a gas cap at oil & gas fields.

Refining

Refinery throughput – volumes of oil despatched to drying and desalination facilities.

Depth of refining – ratio of crude oil volumes processed at primary refining facilities, excluding saleable heating oil, liquid fuel

used in production, and losses in drying and desalination, to total crude oil volumes processed at primary refining facilities.

Light products yield – ratio of the total volume of gasoline, diesel fuel and their fractions (useable as motor oil components),

jet fuel, illuminants and technical kerosene, low!viscosity ship fuel and heating oil (fractions, which vaporize between 28 and

360 degrees Celsius) to the total volume of oil processed at a refinery in a given period.

Naphta – straight!run gasoline, unstable gas naphta, secondary!process gasoline and hydrocarbon inputs for production of

ethylene.

Fuel oil – fuel oil, ship fuel oil, oil residues and raw material for technical carbons.

Lubricants – oils, base oils, packaged oils, etc.

LPG – propane!butane used as vehicle fuel, technical propane, technical butane, technical propane!butane, isobutane.

Compressed gas – gas at pressures required for transportation along trunk pipelines.

GLOSSARY

73

GLOSSARY

Stripped gas – associated petroleum gas, containing ethane, propane and butane fractions, freed from gas naphta components

(C5 and higher).

Alcylation – process for obtaining high!octane gasoline components by interaction of isobutane and olefin hydrocarbons.

Visbreaking – process for refining crude oil residues (tars and semi!tars) by shallow thermal decomposition. The main product

of visbreaking is boiler fuel, which is obtained by lowering viscosity of the inputs through cracking.

Gas fractionation – obtaining separate light hydrocarbons or hydrocarbon fractions with higher degrees of purity from associ!

ated petroleum gas.

Hydrocracking – catalytic cracking by application of medium and high pressure gas with hydrogen content. Choice of catalysts

and technical parameters makes it possible to obtain high!quality components for most petroleum products (liquefied gas, gaso!

line and diesel, oil components, etc.) from virtually any raw hydrocarbons by hydrocracking.

Hydrotreating – process for reducing sulfur and nitrogen elements in petroleum products using a catalyst under pressure from

a gas containing hydrogen.

Isomerization – process for obtaining high!octane isoparaffin fractions by refining low!octane paraffin hydrocarbons from light

gasoline fractions using catalysts.

Catalytic cracking – process for obtaining high!quality and stable gasoline by catalytic decomposition of heavy fractions into

light fractions, carried out at high temperatures (500 degrees Celsius) using a catalyst.

Catalytic reforming – process for obtaining high!octane gasoline components and aromatic compounds by turning low!octane

straight!run gasoline into high!aromatic gasoline fractions with use of a catalyst.

Coking – thermal process for decomposing heavy and compact residual products into lighter products (gasoil and naphtha) and

petroleum coke.

Pyrolysis – high!temperature process of deep thermal refining of petroleum products and/or gas to obtain inputs for petro!

chemical synthesis. The main product of pyrolysis is gas rich in unsaturated hydrocarbons (ethylene, propylene, butadiene).

Thermal cracking – process for obtaining light hydrocarbons from heavier hydrocarbons at high temperatures (for example,

vacuum gasoil can be refined into light products).

6

74


Legal Address and Central Office11, Sretensky Boulevard, Moscow, Russia 101 000

Central Information ServiceTel: +7 (495) 627!44!44, 628!98!41 Fax: +7 (495) 625!70!16

Shareholder Relations DepartmentTel: +7 (495) 627!48!84, (499) 973!73!46Fax: +7 (495) 627!41!91Email: [email protected]

Investor Relations DepartmentTel: + 7 (495) 627!16!96Fax: + 7 (495) 981!72!88Email: [email protected]

Press ServiceTel: +7 (495) 627!16!77Fax: 7 (495) 627!16!53Email: [email protected]

LUKOIL Stock & Consulting Center 3 (Building 1), Pokrovsky Boulevard,Moscow, Russia 109 028Tel: + 7 (495) 627!41!91, 627!43!80 Fax:+ 7 (495) 627!41!91

NIKOIL Registrar Company28, 3rd Ulitsa Yamskogo Polya,Moscow, Russia 125 993Tel/fax: +7 (495) 755!90!77 (for legal entities)+ 7 (495) 933!67!39 (for individuals)

LUKOIL PublicationsElectronic versions of the followingreports are available on the Companyweb site (www.lukoil.com)1. Annual Report.2. Consolidated Financial Accounts.3. Quarterly Consolidated FinancialAccounts.4. Management Discussion ofCompany Performance.

REFERENCE INFORMATION

More information about the Company is available at LUKOIL's website at www.lukoil.com (English version) orwww.lukoil.ru (Russian version).

By visiting out site you can find out more about LUKOIL's main businesses and Company results, as well as stayinginformed about new developments in all spheres of LUKOIL's activities. The site also provides information aboutCompany policy and involvement in social and environmental affairs.

A section of the site for investors and shareholders provides the Company's financial results, history of dividend pay!ments, share prices and accounts. A number of presentations for the investment community are also availablethrough this section of the site.

All information in this document is presented as of 31.12.2008. This document does not reflect any changesthat happened after that date, unless specified.

Concepts and Terms Used in the DocumentThe references to LUKOIL, LUKOIL Group, 'the Company', 'we' and 'our' in this document all refer to LUKOIL and/orits subsidiary enterprises, depending upon the context, in which the terms are used.

Sources of information

Abbreviations

Information provided by the Ministry of Industry andEnergy of Russia

Information provided by the State Committee forStatistics of the Russian FederationAnnual reports of major international private oilcompanies

Statistical Review of World Energy 2008 (BritishPetroleum)Annual Statistical Bulletin (OPEC)Worldwide Refineries!Capacities as of January 1,2009 (Oil & Gas Journal)Platt’s

$ or USD — United States Dollarsmln — millionbln — billionth. — thousandboe — barrel of oil equivalent (1 boe = 6,000 t&f of gas)t&f — trillion cubic feet

b&f — billion cubic feetmcf — million cubic feetth. cf — thousand cubic feetbcm — billion cubic metersmcm — million cubic meters

ANALYST DATABOOK 2009 · Oil reserves replacement ratio, % 221 99 121 73 70 (79) Oil reserves to...

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Transcript of ANALYST DATABOOK 2009 · Oil reserves replacement ratio, % 221 99 121 73 70 (79) Oil reserves to...