lukoil factbook2007eng

FACT BOOK 2007

LUKOIL in the world

LUKOIL today ............................................................................................................................................2LUKOIL on the world map..........................................................................................................................4History of LUKOIL Group............................................................................................................................6Operating structure of LUKOIL Group......................................................................................................10Oil reserves ..............................................................................................................................................12Gas reserves ............................................................................................................................................13Oil production............................................................................................................................................14Gas production..........................................................................................................................................15Oil refining ................................................................................................................................................16Oil deliveries to the international market ..................................................................................................17

LUKOIL in Russia

LUKOIL today ..........................................................................................................................................18Reserves and production ..........................................................................................................................19Oil refining ................................................................................................................................................21Export of oil and petroleum products ......................................................................................................23

Exploration and production

Strategy ....................................................................................................................................................24Main indicators for 2006 ..........................................................................................................................24Geography ................................................................................................................................................24Description of the resource base..............................................................................................................25Geological exploration ..............................................................................................................................25New acquisitions and optimization of the asset portfolio ........................................................................25Oil & gas production ................................................................................................................................25Main operating regions and largest fields ................................................................................................26International projects ................................................................................................................................34

Refining (including petrochemicals) and marketing

Strategy ....................................................................................................................................................42Main indicators for 2006 ..........................................................................................................................42Oil refining ................................................................................................................................................43Gas processing ........................................................................................................................................53Petrochemicals ........................................................................................................................................54Transport ..................................................................................................................................................59Crude oil and petroleum product marketing ............................................................................................61

Corporate governance

Company management structure ............................................................................................................63Committees of the Board of Directors ....................................................................................................64

LUKOIL financial policy and securities

Financial policy ..........................................................................................................................................65History of corporate borrowings ..............................................................................................................65LUKOIL shares..........................................................................................................................................66History of Company share capital ............................................................................................................66

Tax environment ..........................................................................................................................................68

Forward�looking statements ......................................................................................................................71

Reference information ................................................................................................................................72

FACT BOOK 2007

1

CONTENTS

LUKOIL is

one of the world’s leading vertically integrated oil & gas companies. Main activities of the

Company are exploration and production of oil & gas, production of petroleum products

and petrochemicals, and marketing of these outputs. Most of the Company's exploration

and production activity is located in Russia, and its main resource base is in Western

Siberia. LUKOIL owns modern refineries, gas�processing and petrochemical plants locat�

ed in Russia, Eastern Europe and near�abroad countries. Most of the Company's produc�

tion is sold on the international market. LUKOIL petroleum products are sold in Russia,

Eastern and Western Europe, near�abroad countries and the USA.

LUKOIL today is:

1.3% of world oil reserves

2.3% of world oil production

0.4% of world gas reserves

0.6% of world gas production

1.3% of world oil refining capacities

1.3% of world oil refinery throughputs

The largest privately owned oil & gas company in the world by proved reserves

of oil

2nd largest privately owned oil & gas company in the world by proved

hydrocarbon reserves

4th largest privately owned oil & gas company in the world by oil production

6th largest privately owned oil & gas company in the world by hydrocarbon

production

LUKOIL does business in more than 30 countries worldwide*. In particular, the

Company:

Carries out geological exploration work in 9 countries

Has proved oil reserves in 5 countries

Has proved gas reserves in 4 countries

Produces oil in 4 countries

Produces gas in 3 countries

Has oil refineries in 4 countries

Has petrochemical plants in 3 countries

Retails petroleum products in 22 countries

* Including projects acquired in the first half of 2007.

241680

ExxonMobil

Shell

BP

ENI

Chevron

ConocoPhillips

Total

Repsol YPF

LUKOIL

Proved hydrocarbon reserves of major international private oil & gascompanies (12/31/2006), bln boe

22.1

20.4

17.4

11.6

11.6

10.7

9.4

6.3

2.6

10

ConocoPhillips

Shell

LUKOIL

ExxonMobil

BP

Chevron

ENI

Total

Repsol YPF 1.10

1.74

1.94

2.15

2.29

2.53

3.34

3.88

4.24

Hydrocarbon production bymajor international private oil & gascompanies (2006), mln boe per day

2 3 4 5

FACT BOOK 2007

2

LUKOIL TODAY

LUKOIL IN THE WORLD

3

United Kingdom

USAGermany

Russia

LUKOIL ranks:

№12 among 100 largest private and public oil companies worldwide by net profit

№19 among 100 largest private and public oil companies worldwide by sales

№21 among 100 largest private and public oil companies worldwide by assets

№8 among the world’s largest publicly traded oil companies by market capitalization

№6 among European energy companies and №15 among 250 biggest energycompanies worldwide (Platt’s)

№9 among publicly traded integrated oil companies worldwide (Fortune Global�500 rating)

№114 among 2,000 largest companies worldwide (The Forbes 2000)

№2 among largest Russian companies (Expert RA)

Company securities are traded in 4 countries on stock exchanges and the OTC market

Company securities are the most liquid corporate stocks of foreign issuers traded on the London Stock Exchange (IOB system)

Total

0 5 10 15

ENI

BP

ConocoPhillips

LUKOIL

Shell

Chevron

Repsol YPF

ExxonMobil

Net margin of major internationalprivate oil & gas companies (2006), %

11.1

10.8

10.7

8.5

8.4

8.3

8.0

7.7

5.7

Chevron

ExxonMobil

0 7 14 35

ConocoPhillips

BP

LUKOIL

ENI

Total

Shell

Repsol YPF

ROACE of major international privateoil & gas companies (2006), %

13.6

18.3

19.1

21.1

21.5

21.7

22.3

22.6

32.9

21 28

Countries where LUKOIL securities are traded

Performance of LUKOIL share price compared with the Bloomberg Oils

Index of major international oil companies (2006), %

Jan100

110

120

130

140

150

170

LUKOIL Bloomberg Oils

Feb MayAprMar SepJul AugJun Oct Nov Dec

160

Venezuela

Finland

Belarus

Estonia

Latvia

Lithuania

Ukraine

Poland

Hungary

Moldova

Serbia

Romania

Bulgaria

Turkey

Cyprus

Egypt

Colombia

USA

Kazakhstan

Uzbekistan

Azerbaijan

Iran

Georgia

Iraq

Saudi Arabia

Exploration

Production or preparation for production

Refining at own refineries

Retail sales of petroleum products

RUSSIA

Slovakia

Czech Republic

Belgium

Macedonia

Cote d’Ivoire

LUKOIL IN THE WORLD

4 5

LUKOIL ON THE WORLD MAP

LUKOIL IS ONE OF THE WORLD’S LARGEST VERTICALLY

INTEGRATED OIL & GAS COMPANIES

FACT BOOK 2007

6

1991

The state oil company LangepasUrayKogalymneft is set up bydecree of the USSR Council of Ministers. The new Companyunites three oil producing enterprises (Langepasneftegaz,Urayneftegaz, Kogalymneftegaz) and three oil refineries (Perm,Volgograd and Novoufimsk).

1993

LUKOIL is created as a public joint�stock company by decree ofthe Russian Government. Its share capital consists of controllingstakes in production, refining and marketing enterprises. TheCompany's privatization plan is approved and a first issue ofLUKOIL shares is registered.

1994

The first stage of privatization is completed, and trading of theCompany's shares on the secondary market begins. TheCompany enters the Azeri – Chirag – Guneshli project inAzerbaijan.

1995

A Russian Government decree transfers controlling stakes in 9 production, marketing and service companies in WesternSiberia, the Volga Region and the Urals to LUKOIL. LUKOILGroup shifts to a single share. Atlantic Richfield Company(ARCO) of the USA becomes a major shareholder and strategicpartner of LUKOIL. The Company enters international projects:Kumkol in Kazakhstan and Meleiha in Egypt.

1996

ADRs based on LUKOIL shares are placed on the international market. The Company enters the Shakh Deniz project in Azerbaijan.

1997

The Company enters the Karachaganak and Tengiz projects in Kazakhstan and the West Qurnah�2 project in Iraq.Consolidation of main subsidiaries of LUKOIL is completed viaexchange of their shares for shares of the Company.

1998

The Company acquires the Romanian oil refinery Petrotel andlimited liability company Stavrolen in Russia, and enters the D�222 project in Azerbaijan.

1999

The Company acquires controlling stakes of public joint�stockcompany KomiTEK, the Odessa Refinery (Ukraine), UkhtaRefinery, limited liability company Saratovnefteorgsintez and theBurgas Refinery in Bulgaria.

2000

The Company buys Getty Petroleum Marketing Inc. of the USA,which owns about 1,300 filling stations in the North�East USA.LUKOIL and the company Oriana jointly find the petrochemicals enterprise, LUKOR, as a private joint�stock company. Public joint�stock company RITEK and limited liabilitycompany LUKOIL�Perm are consolidated.

2001

The Company buys the public joint�stock companyYamalneftegazdobycha, which has licenses to use sub�soil resources in the Bolshekhetskaya Depression. TheCompany acquires a controlling stake of the Nizhny NovgorodRefinery. LUKOIL also acquires controlling stakes of the publicjoint�stock company Arkhangelskgeoldobycha and of severalsmall companies (limited liability company Kharyaganeft, publicjoint�stock company Bitran, private joint�stock company Baitek�Silur, and limited liability company AmKomi), which have licenses for development of fields in Timan�Pechora. Preferredshares are converted to common shares at a conversion rate of1:1. The Company enters the WEEM project in Egypt.

2002

The Company begins a restructuring program, targeted at efficiency improvements and increase of shareholder value.LUKOIL becomes the first Russian company with a full secondary listing on the London Stock Exchange. A 5.9% government stake in LUKOIL is placed on the London Stock

FACT BOOK 2007

HISTORY OF LUKOIL GROUP

Our purpose is to harness natural energy resources for human benefit.

We aim to support long�term economic growth, social stability, prosperity and progress inthe regions where we operate, as well as caring for the environment and ensuring

sustainable use of natural resources.

We want to achieve consistent and long�term growth of our business, transformingLUKOIL into a leading global energy company. We want to be a reliable supplier of

hydrocarbons on the international energy market.

LUKOIL IN THE WORLD

7

Exchange. LUKOIL acquires the limited liability companiesUralOil and KomiQuest. The Company enters the Condor projectin Colombia.

2003

A purchase and sale agreement is signed with Rosneft for theassets of the following companies: public joint�stock companyArkhangelskgeoldobycha, private joint�stock company Rosshelfand limited liability company Polar Lights. LUKOIL completesconsolidation of limited liability company LUKOIL�Perm, publicjoint�stock companies Komineft, Ukhtaneft, Tebukneft, andYaNTK, and private joint�stock companies LUKOIL�AIK andInvestnafta. LUKOIL buys controlling stake of the private joint�stock company RKM�oil. LUKOIL acquires 79.5% of sharesin the Serbian company Beopetrol, which controls about 20% ofthe retail fuel market in Serbia. The Company's stake in the Azeri – Chirag – Guneshli project is sold. The Company entersthe West and North�East Geisum projects in Egypt and theAnaran project in Iran.

2004

LUKOIL enters the Tyub�Karagan and Atashsky projects on theCaspian shelf (Kazakhstan), the Block A gas project in SaudiArabia and the Kandym – Khauzak – Shady gas project inUzbekistan. LUKOIL increases its ownership of LUKAgip to100% by acquisition of 50% previously owned by ENI Group.The Petrotel�LUKOIL refinery is relaunched following modernization. LUKOIL acquires 779 filling stations fromConocoPhillips in the US states of New Jersey and Pennsylvania.Production begins at the Kravtsovskoye field on the shelf of theBaltic Sea. A new transshipment complex is brought into operation at Vysotsk. LUKOIL sells 100% of limited liability company LUKOIL�Drilling. A decision is taken to sell controlling stakes in the public joint�stock companyPetrocommerce Bank and in the private joint�stock companies LUKOIL�Neftegazstroi and Arcticneft. ConocoPhillipsacquires 7.6% of LUKOIL common shares, which were previously owned by the Russian Federal Government, puttingLUKOIL in 100% private ownership. LUKOIL and ConocoPhillipsannounce creation of a large�scale strategic alliance.

2005

The Nakhodkinskoye gas field (Yamal�Nenets AutonomousDistrict) is commissioned. LUKOIL discovers the V. Filanovsky oiland gas condensate field on the shelf of the Caspian Sea withprobable and possible reserves of more than 750 mln boe. TheCompany acquires in Nelson Resources Limited which has interests in four production projects in Kazakhstan. LUKOILacquires a 66% stake in Geoilbent which develops fields inWestern Siberia. The Group buys the remaining 50% inSeverTEK developing fields in Nenets Autonomous District andin the Komi Republic. LUKOIL and ConocoPhillips set up a jointventure, Naryanmarneftegaz, for development of hydrocarbon

reserves in the Timan�Pechora oil & gas province. LUKOIL andthe Kazakh oil & gas company KazMunaiGaz sign founding documents of a joint venture, Caspian Oil & Gas Company, fordevelopment of the Khvalynskoye field (Caspian Sea). LUKOILbuys 51% minus one share in Primorieneftegaz which has alicense for geological study of the Poimenny block on whichlarge gas condensate field, Tsentralno�Astrakhanskoye, was discovered in 2004. The Company acquires the Finnish companies Oy Teboil Ab and Suomen Petrooli Oy engaged inpetroleum product wholesale and retail sale as well as in production and sale of lubricants. As part of its restructuring program LUKOIL sells a 38% interest in Globalstroy�Engineeringand a 100% share in Arcticneft. Large�scale reconstruction andmodernization is begun at the Odessa Refinery. The Companyexits the Zykh�Govsany project in Azerbaijan.

2006

January

LUKOIL begins exploration drilling at the Block A contract territory in Saudi Arabia. The first exploration well is at the domeof the Tukhman structure and will be drilled to a depth of 4,800meters.

February

LUKOIL begins production of gasoline that meets Euro�3 standard at the Nizhny Novgorod Refinery. Production of Euro�3gasoline was made possible by commissioning of an isomerization facility at the refinery with 440,000 tons annualcapacity.

LUKOIL and the National Iranian Oil Company sign a contract onjoint geological and geophysical work at Iran's Mogan and Lali oil & gas blocks.

April

Fitch international rating agency awards a credit rating to LUKOILfor the first time. The agency rates the Company at BBB� (investment grade).

LUKOIL and the company Naftan set up a 50�50 joint venture, forproduction and sale of modern, economically efficient additivesfor motor oils under the LUKOIL brand. The JV will meet up to80% of LUKOIL's needs in additives for motor oil production.

LUKOIL begins sales in Russia of new gasolines under the EKTObrand (environmentally friendly fuels). The new gasolines meetEuro�3 standard and surpass Russian legal requirements.

June

LUKOIL acquires 41.81% of shares in Udmurtnefteprodukt,which controls over 60% of the petroleum product market in theRepublic of Udmurtia (the company has a network of 100 fillingstations and 9 tank farms). Value of the transaction is $25 million.

FACT BOOK 2007

8

The international rating agency, Moody's Investors Service, raises LUKOIL's corporate credit rating by two notches, fromBa1 to Baa2, which is the second investment grade.

LUKOIL acquires 100% of the share capital of Khanty�MansiyskOil Corporation from Marathon Oil Corporation for $847 million(including $249 million repayment of Khanty�Mansiysk OilCorporation debt). Subsidiaries of Khanty�Mansiysk OilCorporation operate at nine license areas on both banks of theOb River in Khanty�Mansiysk Autonomous District (Russia).

LUKOIL and the Norwegian company, Norsk Hydro, winexclusive negotiating rights to further develop the Azar field (atthe Anaran block in western Iran). The field has estimated geological reserves of 2 billion barrels of oil.

LUKOIL and PDVSA complete the first stage of joint work toassess hydrocarbon reserves at the Junin�3 block, located in theheavy oil belt of the Orinoco River (Venezuela). The work provides detailed grounds for viewing Junin�3 as one of the mainblocks in the extensive oil province, located in the east ofVenezuela.

LUKOIL begins production drilling at the Khauzak contract territory in the Dengizkulskoye gas field as part of the Kandym – Khauzak – Shady project in south�western Uzbekistan.A total of 37 new production wells will be drilled at this territory.Peak annual production will exceed 10 billion cubic meters ofgas.

July

LUKOIL acquires 63% of a PSA for exploration, developmentand production of hydrocarbons at the CI�205 ultra�deep�waterblock in Cote d'Ivoire from the Nigerian company, OrantoPetroleum International. Value of the deal is $50 million. Theblock is adjacent to the recently discovered Baobab oil field,which is the biggest field in Cote d'Ivoire.

August

LUKOIL and the Algerian state oil company Sonatrach sign amemorandum of understanding on cooperation in prospecting,exploration and hydrocarbon production projects in Algeria,Russia and third countries. The document also envisages cooperation in refining and marketing as well as exchange ofknow�how.

The government of Uzbekistan and a Consortium of investorsincluding LUKOIL (with a 20% stake) sign a PSA for geologicalexploration work and subsequent development of discoveredhydrocarbon fields in the Uzbek sector of the Aral Sea.

September

LUKOIL opens its first filling station in the city of Skopje(Republic of Macedonia). The Company plans to open 40 stations

in Macedonia in the next four years.

LUKOIL completes construction of the third stage of its transshipping complex at Vysotsk. Design capacity of the termi�nal is nearly 15 million tons of petroleum products per year.

October

LUKOIL and the Angolan oil & gas company Sonangol sign amemorandum of mutual understanding. The document givesLUKOIL the opportunity to take part in geological explorationprojects on the Angolan continental shelf.

A catalytic reforming facility with annual capacity of 1.0 milliontons is commissioned at the Volgograd Refinery. It replaces anold reformer with 0.7 million tons annual capacity.Commissioning of the new reformer increases gasoline outputby more than 30% and raises the share of high�octane gasolinesfrom 60% to 83%.

The Perm Refinery opens a new automated terminal, which isthe first stage of a new complex for production, packaging, storage and delivery of lubricants.

Main principles of LUKOIL's strategic development in2007–2016 are presented to the business community. The strategy plan aims to make LUKOIL one of the leading globalenergy companies and places chief emphasis on acceleratingbusiness growth and maximizing shareholder value.

November

LUKOIL signs an agreement with KazMunaiGaz and RepsolExlporacion Kazakhstan on transfer to the Group of a 25% stakein the company Zhambai, which is the PSA contractor for theSouth Zhambai and South Zaburunye offshore territories locatedin the Kazakh sector of the Caspian Sea. 2D seismic work indicates presence of three promising structures at these territories.

LUKOIL signs an agreement with Mittal Investments on sale ofa 50% stake in Caspian Investments Resources (former NelsonResources), which is 100% owned by LUKOIL Group. Value ofthe deal is $980 million. Mittal Investments also assumes commitments to pay 50% of outstanding debt of CaspianInvestments Resources to the Group, totalling about $175 million at the time of the deal.

December

LUKOIL sells 100% of shares in LUKOIL Shelf Limited andLUKOIL Overseas Orient Limited (owner and operator of theAstra jack up rig respectively) to the BKE group of companies.The value of the deal is about $40 million.

LUKOIL signs an agreement to acquire retail business ofConocoPhillips, consisting of 376 filling stations in Belgium,

9

LUKOIL IN THE WORLD

Finland, the Czech Republic, Hungary, Poland and Slovakia. Theacquired stations are highly efficient: their average daily fuelsales are 9.9 tons, which is 40% more than the Group average.

LUKOIL places two issues of non�convertible, interest�bearingdocumentary bearer bonds, series 03 and 04, on the MICEX.Total face value of the bonds is 14 billion roubles (about $530million). LUKOIL becomes the first Russian non�state companyto place bonds with seven�year maturity.

The Company begins drilling of a first stratigraphic well at theJunin�3 block in Venezuela. Commencement of drilling marksthe start of the second stage of assessment and certification ofreserves at the block.

The consortium for development of the Shakh Deniz gas condensate field, which includes LUKOIL, starts commercialproduction of hydrocarbons from the first production well.Planned production at Shakh Deniz in 2007 is about 5 billioncubic meters of gas and 1.5 million tons of condensate.

Corpo

rate

Gov

erna

nce En

hanc

emen

t

2004

ConocoPhillips acquires 10%of LUKOIL shares and becomesthe Company’s strategic partner;

publication of LUKOIL Analyst DataBook

2003

Creation of Board committees forStrategy and Investment, Personnel and

Remuneration, and Audit; options program for top management;

development of investor relations

2002

Full listing on the LSE; start ofrestructuring program;

3 independent directors on the Board

Quarterly financial accountsunder US GAAP; creation ofInternal Audit Department;

conversion of preferred shares tocommon shares (1:1)

1998

First financial results under US GAAP

1997

First reserve audit by Miller&Lents

1996

First ADR issue by a Russianoil company

1995

Transfer to a single share;first general meeting of shareholders;

first Russian company with astrategic foreign partner (US ARCO)

1994

KPMG is appointed as Company auditor and Akin Gump as legal cosultant

1993

2001

Creationof LUKOIL

2005

Representative of ConocoPhillips is elected to the BoD; changes to the

Chartrer increasing rights of minorities are approved

ConocoPhillips increases its share in LUKOIL to 20%

2006

History of LUKOIL corporate governance

11

LUKOIL IN THE WORLD

Exploration &Production

ProductMarketing

Petro�chemicals

Russia

OilRefining

GasProcessing

L�Azerbaijan

L�Bulgaria

L�Baltic

L�Serbia

L�Belarus L�Macedonia

L�Georgia

L�Romania

L�Moldova

L�Hungary

L�Cyprus

L�Komi

Timan�Pechora

Naryanmarneftegaz

L�Sever

RITEK

Other

L�Kaliningradmorneft

L�Nizhnevolzhskneft

Volga

L�Perm

Urals

L�Western Siberia

Western Siberia

Volga

L�Volgogradneftepererabotka

L�Nizhegorodnefteorgsintez

L�Ukhtaneftepererabotka

Timan�Pechora

Stavrolen

Volga

Korobkovsky Plant

Volga

Permneftegazpererabotka

Urals

L�Volganefteproduct

L�Nizhnevolzhsknefteproduct

L�Permnefteproduct

L�Severo�Zapadnefteproduct

L�Severnefteproduct

Atashsky

Karachaganak

Kumkol

Tengiz

Tyub�Karagan

North Buzachi

Karakuduk

Arman

Kazakhoil�Aktobe

South Zhambai

South Zaburunye

LUKOIL Neftokhim Burgas

Bulgaria

L�Odessa Refinery

Ukraine

LUKOIL Neftokhim Burgas

Bulgaria

Kazakhstan

L�Permnefteorgsintez

Urals

Uray Mini�refinery

Western Siberia

Kogalym Mini�refinery

L�Usinsky Plant

Timan�Pechora

Lokosovsky Plant

Western Siberia

Saratovorgsintez

Volga

L�Uralnefteproduct

L�Tsentrnefteproduct

L�Yugnefteproduct

L�Kaliningradmorneft

L�Poland

L�Turkey

L�Ukraine

L�Finland

LITASCO

L�USA

Meleiha

Egypt

WEEM

Condor

Colombia

Block А

Saudi Arabia

Shakh Deniz

Azerbaijan

D�222 (Yalama)

Junin�3

Venezuela

International

West Qurnah�2

Iraq

Aral

Kandym – Khauzak – Shady

Uzbekistan

Petrotel�LUKOIL

Romania

Karpatneftekhim

Ukraine

CI�205

Cote d’Ivoire

Anaran

Iran

Mogan and Lali

FACT BOOK 2007

10

OPERATING STRUCTURE OF LUKOIL GROUP (2006)*

* “L�” stands for “LUKOIL�” in companies’ full names.

FACT BOOK 2007

12

Russia

Egypt

Kazakhstan

Azerbaijan Uzbekistan

Shell

Chevron

0

ExxonMobil

BP

ENI

ConocoPhillips

Total

Repsol YPF

LUKOIL

Proved oil reserves ofmajor international private oil & gascompanies (12/31/2006), bln barrels

15.9

10.9

9.8

7.8

6.5

5.3

4.2

3.5

1.1

6 12 18

0.0 1.0 2.0

1.9

�0.2

1.3

LUKOIL

“Big 9”*

World

Average annual growth of proved oil reserves (2002–2006), %

0.5 1.5

Russia (7%)

OPEC countries (76%)

USA (2%)Kazakhstan (3%)

Canada (1%)Other (11%)

Regional distribution of globalproved oil reserves (12/31/2006)

OIL RESERVES

LUKOIL carries out geological exploration work in 9 countries

LUKOIL has proved oil reserves in 5 countries

LUKOIL had 15.927 bln barrels of proved oil reserves at the end of 2006

LUKOIL's share in total world oil reserves was 1.3% at the end of 2006

Proved oil reserves of LUKOIL Group have grown by 9.3% over the last

5 years

Share of LUKOIL Group in world oil reserves, %

20021.25

1.30

1.35

1.40

2003 2004 2005 2006

Countries where LUKOIL has oil reserves

LUKOIL is in first place among major international privately owned oil & gas

companies by proved oil reserves

LUKOIL has one of the highest average annual rates of growth of proved oil

reserves among international oil & gas companies

* 9 major international privately owned oil & gas companies.

13

LUKOIL IN THE WORLD

GAS RESERVES

Russia (26%)

Middle East (41%)

Asia (8%)

Other (9%)

Africa (8%)North America (4%)

Regional distribution of globalproved gas reserves (12/31/2006)

South America (4%)

Russia

Kazakhstan

Azerbaijan Uzbekistan

Countries where LUKOIL has gas reserves

LUKOIL carries out geological exploration work in 9 countries

LUKOIL has proved gas reserves in 4 countries

LUKOIL had 26.597 tcf of proved gas reserves at the end of 2006

LUKOIL's share in total world gas reserves was 0.4% at the end of 2006

Proved gas reserves of LUKOIL Group have grown by 2 times over the last

5 years

LUKOIL has the 4th largest reserves of gas among major international privately

owned oil & gas companies

LUKOIL has one of the highest average annual rates of growth of proved gas

reserves among international oil & gas companies

Share of LUKOIL Group in world gas reserves, %

20020.2

0.3

0.4

0.5

2003 2004 2005 2006

LUKOIL

Shell

ConocoPhillips

0

ExxonMobil

BP

Chevron

ENI

Total

Repsol YPF

Proved gas reserves of major international private oil & gascompanies (12/31/2006), tcf

67.6

45.9

44.1

26.6

25.5

24.5

22.9

17.0

9.3

10 20 30 40 706050

0 10 20

15.0

3.0

0.8

LUKOIL

“Big 9”*

World

Average annual growth of proved gas reserves (2002–2006), %

5 15


FACT BOOK 2007

14

Russia

Kazakhstan

Egypt

Azerbaijan

LUKOIL

0 1 2 3

BP

Shell

ExxonMobil

ConocoPhillips

Chevron

ENI

Total

Repsol YPF

Oil production by majorinternational private oil & gas companies (2006), mln barrels per day

2.68

2.48

1.95

1.93

1.71

1.51

1.11

1.08

0.53

5.3

1.8

2.0

LUKOIL

“Big 9”*

World

Average annual growth of oil production (2002–2006), %

0 4 62

Regional distribution of global oilproduction (2006)

Russia (12%)

OPEC countries (44%)Other (20%)

China (5%)

USA (8%)Canada (4%)

Mexico (4%)Norway (3%)

LUKOIL produces oil in 4 countries

Oil production by LUKOIL Group in 2006 was 95.24 mln tons (703 mln barrels)

The share of LUKOIL Group in world oil production in 2006 was 2.3%

LUKOIL Group increased oil production by 29.7% in the last 5 years

Share of LUKOIL Group in world oil production, %

OIL PRODUCTION

Countries where LUKOIL produces oil

LUKOIL is in 4th place by oil production among major international privately

owned oil & gas companies

LUKOIL has one of the highest average annual rates of oil production growth

20011.9

2.0

2.2

2.4

2003 2004 2005 20062002

2.1

2.3


15

LUKOIL IN THE WORLD

Russia

Kazakhstan

Azerbaijan

ExxonMobil

ENI

Repsol YPF

LUKOIL

Shell

BP

Total

Chevron

ConocoPhillips

Gas production by majorinternational private oil & gas companies (2006), mln boe per day

0.22

0.57

0.66

0.78

0.83

0.83

1.39

1.40

1.56

0.0 0.5 2.01.51.0

26.5

2.8

2.9

LUKOIL

“Big 9”*

World

Average annual growth of gas production (2002–2006), %

300 2010

Russia (22%)

Regional distribution of globalgas production (2006)

North America (26%)Other (16%)

South America (5%)

Asia (13%)Middle East (12%)

Africa (6%)

LUKOIL produces gas in 3 countries

Gas production by LUKOIL Group in 2006 was 15.97 bcm (564 bcf)

The share of LUKOIL Group in world gas production in 2006 was 0.56%

LUKOIL Group increased gas production by more than 2 times in the last 5 years

LUKOIL has lower levels of gas production than other major privately owned

international oil companies, but the Company is currently working hard

to increase gas output

LUKOIL has one of the highest annual rates of gas production growth

Countries where LUKOIL produces gas

GAS PRODUCTION

Share of LUKOIL Group in world gas production, %

2001

0.1

0.2

0.3

0.6

2003 2004 2005 2006

0.5

2002

0.4


FACT BOOK 2007

16

Volgograd

Kstovo

Perm

Uray

Kogalym

Odessa

Burgas

Ploiesti

Ukhta

Russia (6%)

Regional distribution of globalrefining capacities (12/31/2006)

North America (24%)Europe (23%)

South America (8%)

Asia (27%)

Middle East (8%)

Africa (4%)

Russia (6%)

Regional distribution of globalrefinery throughputs (2006)

North America (25%)Europe (22%)

South America (7%)

Asia (28%)

Middle East (9%)

Africa (3%)

Oil refineries of LUKOIL Group

OIL REFINING

LUKOIL has oil refineries in 4 countries

Overall capacity of LUKOIL Group refineries at the end of 2006 was 58.1 mln

tons of crude oil per year (427 mln barrels per year), or 1.3% of global capacities

Oil refineries of LUKOIL Group refined 48.88 mln tons (358 mln barrels) of crude

oil in 2006, representing 1.3% of total world refining

Refining at LUKOIL Group refineries rose by 28.5% in the last 5 years, and

the Company's share in total world refining rose by nearly 1.2 times.

Share of LUKOIL Group in world oil refining, %

20011.0

1.1

1.2

1.4

2003 2004 2005 20062002

1.3

17

LUKOIL IN THE WORLD

VarandeyMurmansk

Svetly

Tuapse

Odessa

Vysotsk

Vitino

GermanyPoland

CzechRepublic

Hungary

Primorsk

Slovakia

Butinge

Novorossiysk

Sources of global oil exports (2006)

Russia (13%)

Middle East (46%)

Other (41%)

OIL DELIVERIES TO THE INTERNATIONAL MARKET

Subsidiaries of LUKOIL Group sold about 36 mln tons of oil on the

international market in 2006 (excluding purchased oil), representing 1.9% of

total world oil deliveries

Share of Russia in oil deliveries to the international market, %

Share of LUKOIL Group in oil deliveries to the international market, %

10

11

12

13

2002 2003 2004 2005 2006

1.5

1.7

1.8

2.0

2003 2004 2005 20062002

1.6

1.9

Main crude oil export routes of LUKOIL

LUKOIL is

the biggest Russian business group with annual turnover in excess of $60 bln. Most of the

Company's activity is focused in 4 federal districts of the Russian Federation: the North�

West, Volga, Urals and Southern districts. The Company's main resource base and oil pro�

duction region is Western Siberia. The Company owns 4 oil refineries and 2 mini�refineries

in Russia, as well as 4 gas�processing plants. The Company's Russian assets also include

2 petrochemical plants. LUKOIL sells its petroleum products in 60 of Russia's administra�

tive regions.

LUKOIL today is:

19% of Russian oil reserves

18.6% of Russian oil production

16.1% of Russian oil refining capacity

18.1% of Russian refinery throughputs

17.9% of Russian oil exports

20.0% of Russian petroleum product exports

The most liquid share in Russian private sector and the third most liquid share

overall on the RTS

The leader among Russian companies by informational openness and trans�

parency, and the first Russian company to obtain full listing on the London Stock

Exchange

The only privately owned Russian oil company, whose share capital is

dominated by minority shareholders

FACT BOOK 2007

18

LUKOIL TODAY

LUKOIL share price and the RTS Index (2006), %

Jan100

120

130

140

150

160

180

LUKOIL RTS

Feb MayAprMar SepJul AugJun Oct Nov Dec

110

170

Share of LUKOIL Group in Russianproved oil reserves (12/31/2006)

LUKOIL (19%)

Other companies (81%)

Share of LUKOIL Group in Russiancrude oil output (2006)

LUKOIL (19%)


Share of LUKOIL Group in Russianrefinery throughputs (2006)

LUKOIL (18%)


LUKOIL IN RUSSIA

19

RESERVES AND PRODUCTION

Proved oil reserves of LUKOIL Group in Russia at the end of 2006 were

15.32 bln barrels, representing 19% of total Russian oil reserves and 96.2% of

total Company oil reserves

Proved gas reserves of LUKOIL Group in Russia at the end of 2006 were

22.16 tcf, or 83.3% of total Company gas reserves

LUKOIL produced 89.56 mln tons of oil in Russia in 2006, representing 18.6% of

total Russian oil production and 94.0% of total oil production by the Company

Share of LUKOIL production in Russia in total Russian oil production, %

200117

18

19

22

2003 2004 2005 20062002

20

21

Regional distribution of proved oilreserves of LUKOIL Group (12/31/2006)

International (3.8%)

Russia (96.2%)

Regional distribution of proved gas reserves of LUKOIL Group (12/31/2006)


Russia (83.3%)

Regional distribution of crude oilproduction of LUKOIL Group (2006)


Russia (94.0%)

Share of oil wells of LUKOIL Group in Russian wells, %

16

17

18

20

2003 2004 2005 20062002

19

Oil production wells Oil production wells in use

LUKOIL produced 14.06 bcm of gas in Russia in 2006, representing

2.1% of total Russian gas production and 88.0% of total gas production by the

Company

The Company owns 17.4% of total Russian oil production wells and

17.8% of Russian oil production wells in use

FACT BOOK 2007

20

The share of idle oil wells in Company production wells is lower than

the Russian average

Share of idle wells, %

14

17

20

26

2003 2004 2005 20062002

23

LUKOIL Russia

The watercut at Company wells is lower than the Russian average

Watercut, %

75.0

77.5

80.0

85.0

2003 2004 2005 20062002

82.5

LUKOIL Russia

Average flow rate of oil wells, tons per day

8

9

12

2003 2004 2005 20062002

10

LUKOIL Russia

11

Flow rate of Company wells is higher than the Russian average

Regional distribution of marketable gasproduction of LUKOIL Group (2006)


Russia (91.3%)

Regional distribution ofoil production wells of LUKOIL Group (12/31/2006)


Russia (96.9%)

Regional distribution of LUKOIL Groupoil production wells in use (12/31/2006)


Russia (97.1%)

21

OIL REFINING

LUKOIL (16.1%)

Share of LUKOIL Group in Russianrefining capacities (12/31/2006)

Other companies (83.9%)

Regional distribution ofrefining capacities of LUKOILGroup (12/31/2006)


Russia (75.9%)

Regional distribution of refinerythroughput of LUKOIL Group (2006)


Russia (80.8%)

Overall capacity of Russian oil refineries of LUKOIL Group at the end of

2006 was:

16.1% of total Russian capacities

44.1 mln tons per year (323 mln barrels per year)

The Company refined 39.50 mln tons of oil at its own Russian refineries

in 2006, or 18.1% of total Russian refining

The Company's refinery throughputs in Russia rose by 34% over the last 5 years

Share of Russian refineries of LUKOIL Group in total Russian refining, %

17.5

18.0

19.0

2003 2004 2005 20062002

18.5

Depth of refining, %

69

72

78

2003 2004 2005 20062002

75

LUKOIL Russia

Capacity utilization rate at Russian refineries of LUKOIL Group in 2006

was 94.7% compared with the Russian average of 80.0%

Depth of refining at refineries of LUKOIL Group is higher than the

Russian average

LUKOIL IN RUSSIA

FACT BOOK 2007

22

Petroleumcoke

Premiumgasoline

Vacuumgas oil

Jet fuel

0

Lubricants

Diesel fuel

Bitumen

Motorgasoline

Share of Russian refineries of LUKOILGroup in overall Russian output ofmain petroleum products (2006), %

45.8

43.8

40.0

28.2

27.0

25.1

16.9

12.9

10 20 30 40 50

Regional distribution of petroleumproduct output of LUKOIL Group (2006)

International refineries (18.0%)

Russian refineries (82.0%)

In Russia LUKOIL is:

1st in production of premium gasoline

1st in production of lubricants

1st in production of jet fuel

1st in production of coke

1st in production of bitumen

1st in production of vacuum gas oil

1st in production of diesel fuel

3rd in production of motor gasoline

Share of high�octane gasoline in overall production of motor gasoline at

the Company's refineries in Russia is higher than the Russian average

Share of high�octane gasoline in overall production of motor gasoline, %

40

50

70

80

2006

Russian refineries of LUKOIL Group Russia

60

2002 2003 2004 2005

23

EXPORT OF OIL AND PETROLEUM PRODUCTS

Subsidiaries of LUKOIL Group exported 44.1 mln tons of crude oil in

2006, representing 17.9% of total Russian crude oil exports

LUKOIL exported 20.5 mln tons of petroleum products in 2006, or

20.0% of total Russian petroleum product exports

The share of LUKOIL Group in exports of Russian petroleum products

grew by one third over the last 5 years

Share of LUKOIL Group in Russian oil exports, %

13

17

19

23

2003 2004 2005 20062002

21

15

Share of LUKOIL Group in Russian petroleum product exports, %

16

17

21

2003 2004 2005 20062002

19

20

18

Share of LUKOIL Group in Russian exports of crude oil and petroleum

products, %

14

16

22

2003 2004 2005 20062002

18

20

Share of LUKOIL Group in Russiancrude oil exports (2006)

LUKOIL (17.9%)


Share of LUKOIL Group in Russianexports of petroleum products (2006)

LUKOIL (20.0%)


Share of LUKOIL Group in Russianexports of crude oil and products (2006)

LUKOIL (18.5%)


LUKOIL IN RUSSIA

MAIN INDICATORS FOR 2006:

Oil reserves, mln barrels 15,927

Gas reserves, bcf 26,597

Hydrocarbon reserves, mln boe 20,360

Oil production, mln barrels 703.1

Marketable gas production, mcm 13,612

Marketable hydrocarbon production, th. boe per day 2,145

Reserve replacement ratio, % 104

E&P net profit, $ mln 3,578

E&P capex, $ mln 5,120

Employees in the segment, th. people 67.9

Exploration and production of oil & gas is LUKOIL's main business and delivers the largest share of Company value (almost50% of consolidated net profit of LUKOIL Group). LUKOIL has ahigh�quality E&P asset portfolio, which is highly diversified interms of geography, reserve type, and levels of depletion.

Geography

LUKOIL is implementing oil & gas exploration and productionprojects in 11 countries. Most activity is concentrated in four federal districts of the Russian Federation: the North�West(Nenets Autonomous District, Komi Republic and KaliningradRegion), the Volga (Perm and Saratov Regions, and the Republicof Tatarstan), the Urals (Yamal�Nenets and Khanty�MansiyskAutonomous Districts) and the South (Volgograd and AstrakhanRegions, and the Republic of Kalmykia). 93 percent of theCompany's proved reserves and 93 percent of production are inRussia.

24

FACT BOOK 2007

EXPLORATION AND PRODUCTION

Exploration

Production and preparation for production

Main E&P projects and regions of LUKOIL Group

Strategy

* Creating the potential for long�term Company growth by reserve replacement in traditional production regions and faster

development in new production regions both in Russia and abroad

* Improving efficiency of geological exploration work through careful selection of projects and application of the latest

technologies. Constant search for new projects

* Achieving compound annual growth rates of hydrocarbon production no lower than 6% in the medium term

* Improving production indicators and lowering lifting costs by application of modern technologies, and by optimization of

field development

* Applying financial criteria for assessment of projects and business results and for optimization of the asset portfolio

25

The Company is also taking part in 25 projects in 10 countries outside Russia. These include geological exploration projects inAzerbaijan, Uzbekistan, Iran, Colombia, Venezuela, Saudi Arabia,Cote d’Ivoire; production of oil & gas in Kazakhstan, Azerbaijanand Egypt, and preparations for production launch in Iraq. International projects account for 6.6% of the Company's provedreserves and 6.4% of its marketable hydrocarbon production.

Description of the resource base

Over 55% of the Company's proved reserves are located in traditional hydrocarbon production regions (Western Siberia,Urals, Volga) with well�developed infrastructure. Most reservesin these regions are already being developed and presence ofestablished infrastructure means that remaining reserves can beput into production without high levels of capex. Althoughreserves in these regions have been in production for manyyears, the share of probable and possible reserves is almost40% of the total and discovery of new reserves is likely, offeringmajor potential for reserve replacement in the future.

A significant part of the Company's proved reserves is located innew regions (Timan�Pechora, North Caspian, BolshekhetskayaDepression, and international projects), which require largeinvestments. Most reserves in the new regions are probable andpossible, offering potential for growth of proved reserves in theprocess of further exploration and development of these fields.The probability of further major discoveries in these regions ishigh.

Company reserves consist mainly of oil (about 80% of provedreserves), but rapid development of gas business will increasethe share of gas reserves. This will be achieved by discovery ofnew reserves and upgrading of reserves to the proved categorythanks to development of existing fields.

Most of company reserves are conventional, but LUKOIL alsohas high�viscosity and bituminous oil as well as hydrocarbonswith high sulfur content. The Company is successfully developing these reserves using the latest technologies. Forexample, steam injection wells are used for extraction of high�viscosity oil at the Usinsky field in the Komi Republic and aspecial processing complex has been built at the Karachaganakfield to enable production of high�sulfur gas and condensate.

Geological exploration

The main strategic task for the Company is to increase itsgrowth potential by quantitative and qualitative improvement ofits resource base. Geological exploration is one of the maininstruments for achieving this. LUKOIL has consistentlyincreased volumes of geological exploration work in recent periods and is constantly working to improve efficiency of thiswork. The Company has spent $1.5 bln on geological explorationin the last five years, and growth of proved reserves due to exploration and development has been 3,571 mln boe, giving areplacement ratio of 106%.

The Company has focused its geological exploration work in the

Timan�Pechora oil & gas province, Western Siberia and the offshore Caspian. LUKOIL is also rapidly developing its international exploration work: stakes in a number of promisinggeological exploration projects in various countries have beenobtained in recent years.

The Company is increasing efficiency of geological explorationand ensuring rapid growth of reserves by use of the latest geophysical methods and adherence to the best internationaloperating standards at all stages of work. This approach makesit possible to obtain additional information about the structureand specific features of potential oil�bearing strata, to reduce riskin search and exploration drilling, and to reduce the number ofdry wells and wells with low production rates.

The Company is consistently increasing volumes of 2D and 3Dseismic work in order to reveal and detail structures and to prepare for drilling of search and exploration wells at promisingsites. The quality of seismic exploration and the speed of dataprocessing and interpretation have increased in recent yearsthanks mainly to application of new IT solutions.

One of the key results of the Company's geological explorationwork has been the discovery of a major new oil & gas sub�province in the Russian sector of the Caspian Sea.

New acquisitions and optimization of the asset

portfolio

The Company is also expanding its reserves through acquisitionand consolidation of assets, and has spent $5.5 bln on new E&Pacquisitions in the last five years. Consolidation of main assets isnearly complete and a number of large new companies havebeen acquired in Russia and abroad. The biggest acquisitionswere Nelson Resources Limited, bought at the end of 2005 for $1,951 mln, as well as assets of Marathon Oil Corporation(Khanty�Mansiysk Autonomous District) bought for $847 mln.Purchase of new assets is not merely a way of increasing oil & gas reserves and production, but also a way of strengthening competitive positions in key regions and obtaining significant synergy effects.

LUKOIL places much emphasis on quality of its assets. As partof the Group restructuring program, which began in 2002 andaims to increase efficiency in all business segments, LUKOILhas disposed of non�core and inefficient assets, reducing thenumber of legal entities in the Group from 700 to nearly 300between 2001 and 2006.

Oil & gas production

High rates of hydrocarbon production growth are a strategic goalfor LUKOIL Group, achievement of which will raise shareholdervalue of the Company and secure competitive advantages thatincrease income to shareholders. Marketable hydrocarbon production has grown by average 7% in the last five years.LUKOIL strives to maximize efficiency and profitability of itsoperations in the oil & gas production segment by improvementof production indicators, careful choice of new projects andscrupulous control of production costs.


LUKOIL makes extensive use of the latest technologies in orderto increase efficiency. The Company is setting up a multi�levelsystem for monitoring of field development using high�tech geological models. In 2003 LUKOIL created a completely newand fully up�to�date Center for Geological and HydrodynamicModelling. The Center creates models using spatial visualization,which provides detailed data on structure of Company fields,making it easier to choose the best geological and technicalapproaches for their development and to maximize developmentefficiency. LUKOIL Overseas Holding, operator of theCompany's foreign projects, has a similar center. LUKOIL is cur�rently setting up modelling centers at its subsidiaries in Russia(primarily in Western Siberia) and abroad.

High�quality techniques for baring of productive strata, originalapproaches to study of drill logs, and application of technologiesto increase flow rates ensure high oil & gas production levelsfrom strata with complex collector features. The Company usesa variety of enhanced oil recovery methods (EOR), increasingrecoverable reserves and production, and allowing commercialproduction of high�viscosity oil, development of reserves in collectors with low permeability, and extraction of reserves atlate stages of field development. Each year the Company carriesout more than 5,000 EOR operations on producing strata, usingphysical, chemical, hydrodynamic and heat techniques toincrease extraction rates. Additional oil production thanks tothese operations in 2002–2006 was nearly 105 mln tons.

LUKOIL also uses other technologies to increase efficiency: systems for maintaining strata pressure, systems for use ofassociated petroleum gas, systems for oil collection, preparationand transportation, energy� and resource�saving technologies andIT solutions.

LUKOIL is placing special emphasis on development of its gasbusiness, which will help the Company to reduce dependenceon the highly volatile crude oil market. LUKOIL is rapidly increasing output of natural gas, transforming itself from an oilcompany into an oil & gas company. In 2001 LUKOIL acquiredthe company Yamalneftegazdobycha, which owns licenses fordevelopment of gas fields in the Bolshekhetskaya Depression(currently the main area for expansion of LUKOIL gas production). LUKOIL is also taking part in the Kandym – Khauzak – Shady gas project in Uzbekistan and carrying out geological exploration work at the promising Block A gas field in Saudi Arabia. Development of fields in theNorthern Caspian will also significantly increase gas production.LUKOIL plans to increase the share of gas in overall hydrocarbon production to 33% in the medium term. The main objective ofthis strategy is to raise Company value by commercialization ofgas reserves.

Greater use of associated petroleum gas is an important part ofthe Company's gas business strategy. This will reduce levels ofgas flaring and thus reduce negative environmental impacts.More associated petroleum gas can be used for generation ofelectricity to power oil production operations, offering cost savings. The Company is implementing a program, approved in2003, which aims to increase the rate of associated petroleumgas use by LUKOIL enterprises to 95%.

Main operating regions and largest fields

Western Siberia

The first oil field in Western Siberia was discovered in 1960 andindustrial production of oil began there in 1964. Western Siberiais now the main oil production region in Russia. Most fields in theregion are super�large and located adjacent to one another. Thesefeatures, and presence of established transport infrastructure,significantly reduce development costs.

LUKOIL has been active in Western Siberia since the Company'sfoundation in 1991 when three production companies in WesternSiberia were united in the state oil companyLangepasUrayKogalymneft. Western Siberia is the Company'smain oil production region (62.7% of LUKOIL Group production)and its main reserve base (53.8% of LUKOIL proved oilreserves).

LUKOIL carries out more than 35% of its exploration drilling inWestern Siberia. Large volumes of geological exploration work inthe region are intended to replace reserves in development.Although a large amount of exploration has already been carriedout in Western Siberia, current geological exploration in theregion is marked by high efficiency and good results. TheCompany's proved reserves of oil in Western Siberia grew by6.5% in the last 5 years despite intensive production levels atfields in the region.

Fields in Western Siberia have been in production for a long timeand are therefore characterized by high levels of exhaustion.Thus EOR methods are widely used in the region: hydrofracturing, drilling of sidetracks and horizontal wells, etc.Multilevel systems for field development monitoring with use ofhigh�tech geological models enable LUKOIL to ensure constantoptimization of field development.

The Company has 13 of its 20 biggest Russian fields (fields withannual production of 1 mln tons and more) in Western Siberia.The Tevlinsko�Russkinskoye and Vat�Yeganskoye fields areamong the biggest in Russia. Each of them has more than 1 bln barrels of proved oil reserves.

Tevlinsko�Russkinskoye Field

Density, API Sulfur content, % Barrels per ton

34.0 1.04 7.34

The Tevlinsko�Russkinskoye field is located in Surgut Area,Khanty�Mansiysk Autonomous District (part of Tyumen Region),88 km north of the city of Surgut in Western Siberia.

The field was discovered in 1971. Field development began in1986. LUKOIL's license to develop the field runs until 2013.

Proved reserves at the end of 2006 were 1,230 mln barrels of oil.Tevlinsko�Russkinskoye is LUKOIL's largest field in Russia byproduction levels. In 2006 the field produced 10.382 mln tons ofoil and cumulative production reached 124.6 mln tons.

FACT BOOK 2007

26

27

Vat�Yeganskoye Field


34.0 0.83 7.32

The Vat�Yeganskoye field is located in Surgut Area, Khanty�Mansiysk Autonomous District (part of Tyumen Region),30 km from the town of Kogalym and 140 km north�east of thecity of Surgut in Western Siberia.

The field was discovered in 1971. Development began in 1983.LUKOIL's license for development of the field runs until 2050.

Vat�Yeganskoye is LUKOIL's biggest field in Russia by provedreserves, which totalled 1,456 mln barrels of oil at the end of2006. Production at Vat�Yeganskoye in 2006 was 8.344 mln tonsof oil (the Group’s share – 8.265 mln tons) and cumulative production exceeded 150 mln tons.

Povkhovskoye Field


36.5 0.60 7.43

The Povkhovskoye field is located in Surgut Area, Khanty�Mansiysk Autonomous District (part of Tyumen Region),170 km north�east of the city of Surgut in Western Siberia.

The field was discovered in 1972 and development began in1978. LUKOIL's license for development of Povkhovskoye runsuntil 2013.

Proved reserves at the end of 2006 were nearly 813 mln barrelsof oil. Production in 2006 was 6.093 mln tons of oil, and cumulative production totalled 172 mln tons.

South�Yagunskoye Field


35.5 0.78 7.44

The South�Yagunskoye field is located in the north�eastern partof Surgut Area, Khanty�Mansiysk Autonomous District (part ofTyumen Region), 165 km north�east of the city of Surgut inWestern Siberia.

The field was discovered in 1978. Development began in 1982.LUKOIL's license for development of the field runs until 2038.

Proved oil reserves at the end of 2006 were 802 mln barrels.Production in 2006 was 3.711 mln tons of oil (the Group’s share– 3.689 mln tons) and cumulative production amounted to 121mln tons.

Surgut

Kogalym

Noyabrsk

Langepas

Megion

Nizhnevartovsk

Povkhovskoye

Nong�Yeganskoye

Pokachevskoye

Uryevskoye

Nivagalskoye

Kluchevoye

Vat�Yeganskoye

Tevlinsko�Russkinskoye

Kochevskoye

Druzhnoye

South�Yagunskoye

Kogalymskoye

YAMAL�NENETSAUTONOMOUS DISTRICT

KHANTY�MANSIYSKAUTONOMOUS DISTRICTMiddle�Khulymskoye

KHANTY�MANSIYSKAUTONOMOUS DISTRICT


Priozerny

Longyugan

Ob river

Largest fields of LUKOIL Group in Western Siberia


Pokachevskoye Field


35.0 0.72 7.38

The Pokachevskoye field is located in the western part ofNizhnevartovsk Area, Khanty�Mansiysk Autonomous District(part of Tyumen Region), 100 km north�east of the city of Surgutin Western Siberia.

The field was discovered in 1970 and its development began in1977. LUKOIL's license to develop the field runs until 2040.

Proved reserves at the end of 2006 were nearly 387 mln barrelsof oil. Production in 2006 totalled 3.468 mln tons of oil, andcumulative production reached 140 mln tons.

Kogalymskoye Field


37.5 0.64 7.53

The Kogalymskoye field is located in Surgut Area, Khanty�Mansiysk Autonomous District (part of Tyumen Region)in Western Siberia.

The field was discovered in 1972 and development began in1985. LUKOIL's license to develop the field runs until 2013.

Proved reserves at the end of 2006 were over 227 mln barrelsof oil. The field produced 2.623 mln tons of oil in 2006 and cumulative production was 26 mln tons.

Uryevskoye Field


34.0 0.86 7.34

The Uryevskoye field is located in Nizhnevartovsk Area, Khanty�Mansiysk Autonomous District (part of Tyumen Region),75 km north�west of the city of Surgut in Western Siberia.


Proved reserves at the end of 2006 were 300 mln barrels of oil.Production in 2006 was 1.847 mln tons of oil and cumulative production was 78.6 mln tons.

Nong�Yeganskoye Field


35.0 0.72 7.40

The Nong�Yeganskoye field is located in the western part ofNizhnevartovsk Area, Khanty�Mansiysk Autonomous District(part of Tyumen Region), 100 km north�east of Surgut in WesternSiberia.


Proved reserves at the end of 2006 were 202 mln barrels of oil.Production in 2006 was 1.447 mln tons of oil and cumulative production exceeded 30 mln tons.

Kluchevoye Field


35.0 0.58 7.35

The Kluchevoye field is located in Nizhnevartovsk Area, Khanty�Mansiysk Autonomous District (part of Tyumen Region),126 km north�west of the city of Nizhnevartovsk in WesternSiberia.


Proved reserves at the end of 2006 were 121 mln barrels of oil.Production in 2006 was 1.385 mln tons of oil and cumulative production was 20 mln tons.

Druzhnoye Field


33.0 0.89 7.30

The Druzhnoye field is located in Surgut Area, Khanty�MansiyskAutonomous District (part of Tyumen Region), 127 km north�eastof the city of Surgut in Western Siberia.



Nivagalskoye Field


34.0 0.92 7.41

The Nivagalskoye field is located in Nizhnevartovsk Area, Khanty�Mansiysk Autonomous District (part of Tyumen Region),114 km north�west of the city of Nizhnevartovsk in WesternSiberia.


Proved reserves at the end of 2006 were 342 mln barrels of oil.Production in 2006 was 1.198 mln tons of oil and cumulative production was 17.6 mln tons.

Middle�Khulymskoye Field


41.0 0.17 7.67

The Middle�Khulymskoye field is located in Nadym Area, Yamal�Nenets Autonomous District (part of Tyumen Region) inWestern Siberia.

28

FACT BOOK 2007

29


Proved reserves at the end of 2006 were nearly 56 mln barrelsof oil. Production in 2006 was 1.035 mln tons of oil and cumulative production was 3.4 mln tons.

Kochevskoye Field


35.0 0.76 7.41

The Kochevskoye field is located in Surgut Area, Khanty�Mansiysk Autonomous District (part of Tyumen Region),125 km from the city of Surgut in Western Siberia.


Proved reserves at the end of 2006 were nearly 84 mln barrelsof oil. Production in 2006 was 997,000 tons of oil and cumulative production was 3.7 mln tons.

Timan�Pechora

The Timan�Pechora oil & gas province is one of the most promising oil production regions both for the Company and forRussia as a whole. LUKOIL became active in the region in 1999with the acquisition of a controlling stake in KomiTEK. In 2001LUKOIL bought controlling stakes in Arkhangelskgeoldobycha,Kharyaganeft, Bitran, Baitek�Silur, and AmKomi. Timan�Pechoranow represents 22.0% of Group oil reserves and 14.3% of oilproduction. Oil production by LUKOIL Group in the region hasincreased by 1.7 times in the last 5 years, to 13.6 mln tons in2006, thanks to acquisition of new assets and organic growth.

The southern part of Timan�Pechora (the Komi Republic) hasdeveloped infrastructure and well�explored reserves, most ofwhich are already in production. By contrast, the northern part(Nenets Autonomous District) has high reserve potential, butneeds major exploration and development investments due to itsunder�developed infrastructure.

In order to speed up development of reserves in Timan�Pechora,

a joint venture, limited liability company Naryanmarneftegaz, hasbeen set up in the region by LUKOIL and the US companyConocoPhillips as part of the strategic partnership between thetwo companies. The joint venture has taken control of 16 fieldswith proved, probable and possible reserves totalling 2.7 bln barrels and 6 of the fields have been commissioned by the endof 2006 (in 2006 the West Lekkeyaginskoye field was put intoproduction). The joint venture will produce about 10 mln tons ofoil per year (200,000 barrels per day) in the medium term.

A new oil terminal was built near the village of Varandey on theBarents Sea in 2000 in order to address the growth of production and lack of developed infrastructure in the region.The terminal can handle oil from Timan�Pechora all the yearround and supply it to export markets, notably the US market. Itis planned to increase annual capacity of the terminal to 12 mlntons of oil by 2008, including exports of oil produced byNaryanmarneftegaz. Enlargement of the terminal is being carriedout jointly with ConocoPhillips.

Usinskoye Field


24.5 1.09 6.90

The Usinskoye field is located in Usinsk Area, part of the KomiRepublic.


The fields's permocarbon deposit is characterized by abnormallyhigh�viscosity oil, which requires heat treatment for extraction.

Proved reserves at the end of 2006 were 594 mln barrels of oil.Production in 2006 was 2.129 mln tons of oil and cumulative production amounted to nearly 153 mln tons.

Vozeiskoye Field


38.0 0.66 7.54


Usinsk

Vozeiskoye

Usinskoye

Ust�Usa

Verkhnevolvynsk

VozeiPripoliarny

REPUBLIC OFKOMI

Parma

Michayel

Largest fields of LUKOIL Group in the Komi Republic

The Vozeiskoye field is located in Usinsk Area, part of the KomiRepublic.

The field was discovered in 1975 and development began in thesame year. LUKOIL's license to develop the field runs until 2042

Proved reserves at the end of 2006 were more than 200 mlnbarrels of oil. Production in 2006 was 1.058 mln tons and cumulative production was 98 mln tons.

Kharyaginskoye Field


37.5 0.32 7.54

The Kharyaginskoye field is located in the Nenets AutonomousDistrict, part of Arkhangelsk Region.


Proved reserves at the end of 2006 were more than 333 mlnbarrels of oil. Production in 2006 was 2.827 mln tons of oil andcumulative production exceeded 33 mln tons.

South�Shapkinskoye Field


33.0 0.60 7.34

The South�Shapkinskoye field is located in the NenetsAutonomous District, part of Arkhangelsk Region, 75 km south�east of the town of Naryan�Mar.


Proved reserves at the end of 2006 were 128 mln barrels of oil.Production in 2006 was 1.341 mln tons of oil and cumulative production amounted to 4.7 mln tons.

Tedinskoye Field


25.0 2.26 6.92

The Tedinskoye field is located in the central part of theBolshezemelskaya Tundra in Nenets Autonomous District(Timan�Pechora).



Volga

Oil production started in the Volga region in the 1930s and theregion remained the Russian leader by explored reserves andproduction levels until the end of the 1970s. Thanks to its longhistory of reserve development, the Volga region has a largeamount of infrastructure in place and development of new fieldsdoes not require major expenditure.

The Volga is a traditional oil & gas production region for LUKOIL.The Company has been producing there since a number of upstream companies in the region were transferred toLUKOIL by Russian government decree in 1995.

The Volga region accounts for 1.4% of Company proved hydrocarbon reserves, 3.4% of its oil output and 4.0% of gasoutput. High levels of reserve exhaustion require extensive useof EOR technologies to improve strata yield.

Volga oil is generally high in sulfur, paraffins and resins, makingit harder to refine and reducing quality of refined outputs.However, the Company's largest field in the region, the Pamyatno�Sasovskoye, is an exception, producing veryhigh�quality oil.

30

FACT BOOK 2007

Kharyaginskoye

Tedinskoye

South�Shapkinskoye

Varandey

REPUBLIC OF KOMI

NENETSAUTONOMOUS DISTRICT

Largest fields of LUKOIL Group in the Nenets Autonomous District

31


Zhirnovsk

Saratov

Engels

Krasnoarmeysk

Pamyatno�Sasovskoye

VOLGOGRADREGION

In 2005 LUKOIL acquired Primorieneftegaz, the owner of licenses for geological study of the Poimenny territory, locatedbetween the Volga and Akhtuba rivers. A major gas condensatefield, the Tsentralno�Astrakhanskoye field, was discovered onthis territory in 2004, with estimated probable and possiblereserves of 1.2 bln barrels of condensate and 9.6 tcf of gas. Thisacquisition significantly increased the Company's reserve base inthe region and raised potential for production growth. Field development efficiency is enhanced by its location close to maintransport routes, proximity to end�users, and by the fact that theSouth of Russia has a shortage of gas. In order to furtherimprove development efficiency, LUKOIL is considering construction of a gas�chemical complex in the region, that willoffer high levels of value�added.

Pamyatno�Sasovskoye Field


39.5 0.27 7.60

The Pamyatno�Sasovskoye field is located in Zhirnovsky Area ofVolgograd Region, 130 km to the north of the city of Volgograd.

The field was discovered in 1990 and development began in thesame year. LUKOIL's license for development of the field runsuntil 2030.

Pamyatno�Sasovskoye is the biggest oil field in VolgogradRegion, and it has unique and favourable geophysical characteristics. Proved reserves at the end of 2006 were 147 mln barrels of oil. More than 90% of production is freeflowing. Oil production in 2006 was 2.547 mln tons (the Group’sshare – 2.341 mln tons) and cumulative production was 30 mlntons.

Urals

The Urals region, like the Volga, is an established oil & gas production area for the Company. LUKOIL began production inthe Urals when a number of upstream companies in the regionwere transferred to the Company by Russian governmentdecree in 1995.

Urals fields have relatively small reserves and are located at considerable distances from one another. However, presence ofwell�established transport infrastructure and refineries in theregion greatly increases production efficiency. Use of EOR helpsto increase recovery rates and production volumes.

The Urals region accounts for 13.3% of Company proved oilreserves, 11.5% of oil production and 6.0% of gas production.

Pamyatno�Sasovskoye field in the Volga region

Berezniki

PermKrasnokamsk

KudymkarUnvinskoye

Solikamsk

PERMREGION

Unvinskoye field in the Urals region

Svetlogorsk

BaltiyskKaliningrad

Kravtsovskoyefield

BalticSea

Romanovooil collector

Svetly

Kravtsovskoye field in the Baltic Sea

Fields in the Bolshekhetskaya Depression


TazovskayaGulf

Nakhodkinskoye

Tazovsky

Khalmerpayutinskoye

N.�Khalmerpayutinskoye

S.�Messoyakhskoye

Salekaptskoye

PerekatnoyePiakiakhinskoye

Unvinskoye Field


40.0 0.50 7.62

The Unvinskoye field is located in Usolsky Area of Perm Region,125 km north of the city of Perm.

The field was discovered in 1980, and development began in1981. LUKOIL's license for development of the field runs until2028.

Proved reserves at the end of 2006 were 165 mln barrels of oil.Production in 2006 was 1.274 mln tons and cumulative production was nearly 24 mln tons.

Kaliningrad region

Kravtsovskoye Field


40.0 0.19 7.62

The Kravtsovskoye field, discovered in 1983, is located on theRussian shelf of the Baltic Sea, 23 km offshore, at a depth of

25–35 meters. Industrial development of the field began in 2004.This is the first offshore field developed independently by a Russian oil company. LUKOIL's license to develop the fieldruns until 2039.

Proved reserves at the field at the end of 2006 were 49 mln barrels of oil. Production at the field in 2006 was 861,000 tons of oil and cumulative production exceeded 1.5 mlntons.

The Baltic Sea has a highly sensitive ecology. LUKOIL thereforecarries out drilling and production of oil at the Kravtsovskoye fieldfrom an ice�resistant stationary platform, using a zero�dischargeprinciple. The Company also maintains constant satellite monitoring of the Baltic Sea. These unprecedented ecologicalsecurity measures completely exclude any possible negativeenvironmental impact. Oil from the field is brought ashore via anunderwater pipeline and exported from a terminal at the port ofSvetly.

Nakhodkinskoye Field and other fields of the

Bolshekhetskaya Depression

LUKOIL is developing fields in the Bolshekhetskaya Depression(Yamal�Nenets Autonomous District) as part of its gas program.

32

FACT BOOK 2007

33

The region's fields will be the basis for growth of gas productionin coming years. The Company has been active in the regionsince its acquisition in 2001 of Yamalneftegazdobycha. As ofDecember 31, 2006, proved reserves of gas at the Company'sfields in the Bolshekhetskaya Depression totalled 12.8 tcf, or48% of LUKOIL's total proved gas reserves.

In April 2005 the Nakhodkinskoye field (proved gas reserves of3.5 tcf at the end of 2006) was brought into production. Gasoutput from the field in 2006 totalled 8.5 bcm. Gas from the fieldis delivered along a 117�km pipeline to the Yamburgskaya gas compression station, where it is fed into the Gazprom transportsystem. Under an agreement between LUKOIL and Gazprom, allof the gas produced at Nakhodkinskoye was initially sold toGazprom. On January 1, 2007 the purchase price increased from$22.5 to $40 per 1,000 cm. Gas has also been sold to other customers from May 2006 at higher prices.

Northern Caspian

LUKOIL came to the Northern Caspian in 1995 when companieswith exploration licenses in the region were transferred toLUKOIL ownership. At that time the offshore Caspian was littleexplored, but probability of significant reserve finds was viewedas high.

The Caspian Sea is highly ecologically sensitive. LUKOIL therefore carried out all necessary ecological studies beforestarting work there, and took care to install all necessary environmental protection measures, including compensatory andsocio�ecological aspects. The Company also designed technology and technical solutions to ensure that geologicalexploration and drilling could be carried out on a zero�dischargebasis.

Geological exploration work carried out by LUKOIL from 1995 to2006 led to discovery of 6 large fields: Khvalynskoye (discoveredin 2000); Yu. Korchagin (2000); 170th kilometer (2001);Rakushechnoye (2001); Sarmatskoye (2002); and V. Filanovsky(2005). Proved, probable and possible reserves at these fieldsare estimated at 4.7 bln boe. Use of the latest technologies haveensured levels of efficiency, which are high and unprecedentedin Russia. Efficiency of exploration drilling has been over 15,000tons of reference fuel per meter (many times higher than theCompany average), and the success rate of prospecting drillinghas been 100%, i.e. each field was discovered by the firstprospecting well. The cost of adding one ton of reference fuel toreserves has been significantly lower than comparable indicators for international major oil companies.

LUKOIL Group's chief development success in the NorthernCaspian has been discovery of the V. Filanovsky oil & gas condensate field. This is the biggest field in the region and,unlike earlier discoveries, it is predominantly an oil field.Preliminary calculations suggest that maximum annual outputfrom the field will amount to 10 mln tons, enabling LUKOIL tosignificantly increase profitability of its high�cost operations inthe Caspian Sea.

LUKOIL is now carrying out further exploration and pre�production work at Northern Caspian fields. Drilling of production wells should begin in the fourth quarter of 2008 atthe Yu. Korchagin field, after which other fields will be broughtinto production. In its work at fields in the Northern CaspianLUKOIL follows guidelines of the Teheran Convention forProtection of the Marine Environment of the Caspian Sea (2003).


Makhachkala

KAZAKHSTAN

RUSSIA

AZERBAIJAN

Khvalynskoye

Sarmatskoye

Yu. KorchginaV. Filanovsky

Rakushechnoye

170 km

Tsentralnaya

Yalama�Samur

Fields in the Northern Caspian

FACT BOOK 2007

34

Venezuela

Condor

Colombia

Junin�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


90%

Iran

Anaran 25%

Azerbaijan

Shakh Deniz 10%

D�222 80%

Saudi Arabia

Block A 80%

Iraq

West Kurnah�2 68.5%

Egypt

Meleiha 24%

WEEM 100%

Share of LUKOIL Group

Gas Oil

ExplorationProduction and preparationfor production

15%

Cote d’Ivoire

CI�205 63%

Aral 20%

Mogan and Lali

South Zhambai*

South Zaburunye* 12.5%

12.5%

* Share after sale of 50% in Caspian Investments Resources in April 2007.

1997

Acquisition of, or entry to, international E&P projects

1994 19961995 1998 2001 2002 2003 2004

Sale of, or withdrawal from, international E&P projects

Azeri – Chirag – Guneshli(Azerbaijan)

Meleiha(Egypt)

Shakh Deniz(Azerbaijan)

West Qurnah�2(Iraq)

Karachaganak(Kazakhstan)

Tengiz(Kazakhstan)

D�222(Yalama)

(Azerbaijan)

WEEM(Egypt)

Zykh�Govsany(Azerbaijan)

Tyub�Karaganand Atashsky(Kazakhstan)

Kandym –Khauzak – Shady

(Uzbekistan)

Azeri – Chirag– Guneshli(Azrbaijan)

Block А(Saudi Arabia)

Condor(Colombia)

WestGeisum(Egypt)

North�EastGeisum(Egypt)

Anaran(Iran)

Kumkol(Kazakhstan)

2005

Arman,Karakuduk,

North BuzachiKazakhoil�

Aktobe(Kazakhstan)

Junin�3(Venezuela)

Zykh�Govsany(Azerbaijan)

2006

West Geisum,North�East

Geisum(Egypt)

CI�205(Cote d’Ivoire)

South Zhambai,South Zaburunie

Aral(Uzbekistan)

Mogan and Lali(Iran)

(Kazakhstan)

INTERNATIONAL PROJECTS

International projects of LUKOIL Group

35

Karachaganak

Acquisition of project stake: November 1997

Agreement type: PSA; production (oil, condensate, gas)

Duration of agreement: 40 years (to 2038)

LUKOIL share in PSA: 15%

Current share of LUKOIL Group in production: 13.95%

Other project participants: BG Group (32.5%, operator); ENI Group (32.5%, operator); Chevron (20%)


46.5–45.4 0.89 7.86

Karachaganak, one of the largest oil and gas condensate fields inthe world, is located in western Kazakhstan and was discoveredin 1979. The field occupies 280 km2, and as of December 31,2006 has proved reserves of 1,151 mln barrels of oil and 8.018tcf of gas. Field development entered an intensive phase in 1995thanks to signing of a PSA and creation of a joint operating consortium, the Karachaganak Petroleum Operating. Final version of the PSA was signed in November 1997.

A processing complex with capacity of 7 mln tons per year andthe Karachaganak–Atyrau export pipeline with 7 mln tons annualthroughput capacity were both commissioned in 2004, enablingexports from Karachaganak via the CPC (Caspian PipelineConsortium) system. This greatly enhances economic efficiencyof the project. A new efficient oil export route was developed,carrying oil from Karachaganak to Samara, from where it can bedelivered through the Transneft pipeline system either to BlackSea and Baltic Sea ports or directly to Central Europe via theDruzhba pipeline in 2006. The Karachaganak consortium plans tocarry out preparatory work for expansion of production capacitiesin 2007.

The share of LUKOIL Group in field reserves as of December 31,2006, is 173 mln barrels of oil and gas condensate and 1.203 tcfof gas. There were 29 operating oil wells and 68 operating gaswells at Karachaganak as of December 31, 2006.

Field production in 2006 reached 10.4 mln tons of oil (LUKOILGroup share was 1.45 mln tons) and 11.9 bcm of gas (LUKOILGroup share was 1.66 bcm).

Production of marketable gas in 2006 totaled 7.2 bcm.

Kumkol

Acquisition of project stake: 1995

Signing of shareholder agreement: 1999

Agreement type: contract; exploration & production (oil, gas)


LUKOIL stake (also share in production): 50%

Other project participants: CNPC (50%)


44.3–33.4 0.02 7.60

The Kumkol field is located in the southern part of the TurgaiDepression (southern Kazakhstan). The field was discovered in1984 and intensive development began in 1996. LUKOIL Groupand CNPC are jointly developing the northern part of the field (thelicense area covers almost 160 km2), while the southern part isbeing developed by CNPC alone. Proved reserves in the licensearea, as of December 31, 2006, were 159 mln barrels of oil.

The Kumkol–Dzhusaly pipeline, providing capacity of 6.5 mlntons per year, was commissioned in 2003 and allows significantreduction of transport costs in export of production via the CPCsystem. A system for utilizing associated petroleum gas wasalso commissioned, reducing lifting costs.

In 2006 20 new production wells were drilled and polymer solutions were used to penetrate productive strata. A new facili�ty was installed at Kumkol for preparation and pumping of oil withannual capacity of 4 million tons of oil and 8 million tons of water(for injection into strata).

The share of LUKOIL Group in proved field reserves is 79 mlnbarrels of oil.

There were 253 oil production wells at the field as of December31, 2006.

Total production at the field in 2006 was 3.4 mln tons of oil(LUKOIL's share was 1.7 mln tons) and 119 mcm of gas(LUKOIL's share was 60 mcm).

Oil is delivered to export via the CPC and is also supplied to theShymkent refinery for subsequent sale of petroleum products inKazakhstan and other CIS countries. Associated petroleum gas isused for energy generating.

Tengiz

Acquisition of project stake: 1997

Duration of agreement: to 2032

Agreement type: contract; production (oil, gas)

LUKOIL stake (also share in production): 2.7% through

LUKArco (5%)

Other project participants: Chevron (50%),

ExxonMobil (25%), KazMunaiGaz (20%)


48.8 0.95 7.97

The Tengiz field is located in Atyrau Region in the Republic ofKazakhstan, 150 km from the city of Atyrau. The field was

Kumkol

Astana

KAZAKHSTAN

Tyub�Karagan

Atashsky

Karachaganak

Tengiz

Alibekmola

Kozhasai

Karakuduk

Arman

NorthBuzachi


36

discovered in 1979 and occupies an area of 600 km2. The contract area also includes the Korolevskoye field and a numberof other smaller fields. Field development was started in 1991.Proved reserves (as of December 31, 2006) were 4,432 mln barrels of oil and 5,726 bcf of gas.

LUKOIL's share in proved reserves at the field (as of December31, 2006) was 120 mln barrels of oil and gas condensate and 154bcf of gas.

There were 68 oil production wells at the field at the end ofDecember 2006.

Production at the field in 2006 was 13.3 mln tons of oil (of whichthe LUKOIL share was 360,000 tons) and 6.0 bcm of gas (ofwhich the LUKOIL share was 162 mcm).

Oil from Tengiz is supplied to export via the CPC. Gas is used toproduce sulfur and is also exported by pipeline.

Karakuduk

Signing of agreement: October 2005, September 2006


Type of agreement: contract; exploration & production (oil, gas)

LUKOIL stake: 50%*

Other project participants: Mittal Investments (50%)*


43.6–31.9 0.03–0.49 7.65

The Karakuduk field is located in the coastal zone of the CaspianSea, on the north�eastern part of the Buzachi peninsular. Provedreserves as of December 31, 2006 were 50 mln barrels of oil.

The Company's share in proved reserves at the field as of December 31, 2006 was 50 mln barrels of oil. Production in 2006was 702,000 tons of oil.

There were 71 oil production wells at the end of December2006.

Construction of an oil loading facility and terminal was completed in 2006. A project for utilization of associated gas wasagreed with supervisory agencies in the Kazakh government.Three new production wells, with average daily production of41.1 tons, were commissioned.

North Buzachi

Signing of agreement: October 2005


Type of agreement: contract; production (oil)

LUKOIL stake (also share in production): 25%*

Other project participants: CNPC (50%), Mittal Investments(25%)*


19.4–19.0 2.00 6.84

The field is located in the coastal zone of the Caspian Sea, on the northern part of the Buzachi peninsular. Proved reserves asof December 31, 2006 were 159 mln barrels of oil.

The Company's share in proved reserves at North Buzachi, as ofDecember 31, 2006, was 80 mln barrels of oil.

There were 215 oil production wells at the end of December 2006.A total of 113 new wells were commissioned in 2006 with dailyaverage output of 31 tons. A new export pipeline was broughtinto operation for delivery of oil from the field to the KazTransOiltransport system.

Production at the field in 2006 was 1.34 mln tons of oil, of whichthe LUKOIL stake was 668,000 tons.

Arman



Type of agreement: JV; exploration and production (oil)


Other project participants: Shell (50%), Mittal Investments (25%)*


29.1–23.5 0.53–2.40 7.31

The Arman field is located in the north�western part of theBuzachi peninsular, on the Caspian Sea coast, to the west of theKalamkas oil and gas field. Proved reserves at Arman as ofDecember 31, 2006 were 8 mln barrels of oil.

The share of the Company in proved reserves as of December 31, 2006, was 4 mln barrels of oil.

There were 16 oil production wells at the field as of December 31, 2006.

Production at the field in 2006 was 163,000 tons of oil and theshare of LUKOIL Group was 82,000 tons.

Kazakhoil�Aktobe



Type of agreement: PSA; production (oil)


Other project participants: KazMunaiGaz (50%), Mittal

Investments (25%)*


39.6–28.2 0.55–1.90 7.52

Two fields, Alibekmola and Kozhasai, are being developed in thisproject. The Alibekmola field is located in the western part ofKazakhstan, 250–270 km south of the city of Aktobe. TheKozhasai field is located 60 km south�west of the Alibekmolafield. Proved reserves at both fields as of December 31, 2006were 152 mln barrels of oil.

The Company's share in proved reserves at the fields (as of December 31, 2006) was 76 mln barrels of oil.

There were 58 oil production wells at the field as of December31, 2006. A total of 11 wells, with average daily production of

* After the sale of a 50% stake in Caspian Investments Resources in April 2007.

FACT BOOK 2007

37

67.6 tons, were drilled and brought into operation in 2006. Workcontinued on implementation of a project for utilization of asso�ciated gas from the fields. A new well design was applied at theAlibekmola field and polymers were used to help maintain collector qualities of productive strata.

Production at the fields in 2006 was 1.017 mln tons of oil, of which the LUKOIL Group share was 508,000 tons.

Tyub�Karagan

Signing of agreement: January 2004

Duration of the agreement: 40 years (to 2044)

Type of agreement: PSA; exploration & production (oil, gas)

Stake of LUKOIL Group: 50%

Other project participants: KazMunaiGaz (50%)

The Tyub�Karagan territory covers 1,350 km2 in Kazakhstan'ssector of the Caspian Shelf, located 40 km north�west of Bautinoseaport. Depth of the sea at Tyub�Karagan is 5–15 meters. Theagreement provides for a 5�year exploration period with the rightto extend the period on 2 occasions by 2 years.

Seismic exploration and interpretation of data were completed in2004 and preparations were made for drilling of a first exploration well.

The first exploration well was drilled to a depth of 2,500 metersin 2005. The well log did not indicate oil�containing collectors.However, detailed data on geological structure of the territorywere obtained. Drilling was organized on a zero�discharge basis.Electrical exploration was carried out and analysis of dataobtained from a prospecting well was continued in 2006.Preparations began for drilling of a second exploration well.

Atashsky

Signing of agreement: January 2004

Duration of agreement: 3 years (to 2007), can be extended

on 2 occasions by 2 years

Type of agreement: contract; exploration (oil)


Other project participants: KazMunaiGaz (50%)

The Atashsky territory occupies 9,700 km2 in Kazakhstan's sector of the Caspian Sea Shelf. Atashsky is located 80–85 kmfrom the port of Bautino at depth of 1–40 meters.

Other promising structures may be discovered in the easternpart of the territory after further exploration work. The agree�ment gives a right to extend the exploration period on 2 occasions by 2 years.

Seismic exploration at the field was completed in 2004. The datawere processed and interpreted in 2005, and the Atash structurewas prepared for drilling. Drilling of the first well is scheduled in2008. Seismic work was continued and data were processed in2006.

WEEM (West Esh El Mallaha)

Acquisition of stake in project: September 2001


Type of agreement: concession; production (oil)


Share of LUKOIL Group in production: variesdepending on expenditure and oil prices

Other project participants: EGPC


27.0 2.10 7.02

The WEEM block is located in the eastern part of the EasternDesert, 8 km west of the city of Hurghada. The block covers 55 km2 and includes 4 fields (Rabeh, Rabeh East, Tanan, andTawoos).

Total proved reserves as of December 31, 2006 were 6 mlnbarrels of oil. The first field at the WEEM block was discovered in 1997, and production began in 1998. Study of thegeological structures of the block is still continuing. The fieldagreement allows extension of the development period for 5 years, up to 2023.

A 100�km export pipeline to the Ras el�Bikhar and Gebel Az�Zeitcoastal terminals was completed in 2004, enabling deliveries tothe international market.

There were 29 oil production wells at the WEEM block as of December 31, 2006. Two new production wells were broughtinto operation at WEEM in 2006, with average daily productionof 85.5 tons. A system for maintaining strata pressure wasdesigned.

Production in 2006 was 517,000 tons of oil, and the share ofLUKOIL Group was 159,000 tons.

Meleiha

Acquisition of stake in project: 1995

Duration of agreement: to 2024

Meleiha

WEEM

Cairo

EGYPT


FACT BOOK 2007

38

Type of agreement: concession; production (oil)


Share of LUKOIL Group in production: varies dependingon expenditure and oil prices

Other project participants: EGPC (56%), IFC (20%)


33.8 n/a 7.61

The Meleiha block is located in the Northern Province of Egypt'sWestern Desert, and consists of four main fields (Aman, North�East Meleiha, West Meleiha, and South�East Meleiha).The fields were discovered in the 1970s and development beganin 1978. The block covers an area of 700 km2. Proved reservesas of December 31, 2006 were 10 mln barrels of oil.

The Company's share in proved reserves at Meleiha was 2 mlnbarrels of oil as of December 31, 2006.

There were 129 oil production wells at the field at the end ofDecember 2006. 9 new production wells were put into operationin 2006.

Production in 2006 was 800,000 tons, and the share of LUKOILGroup was 40,000 tons.

Oil is delivered to export via a 167�km pipeline to the Al�Khamraoil terminal.

Shakh Deniz

Acquisition of stake in project: 1996


Type of agreement: PSA; exploration & production (gas, gas condensate)


Other project participants: Statoil (25.5%, operator); BP (25.5%, operator); Total (10%); NICO (10%); AzerbaijanState Oil Company (10%); TRAO (9%)

The Shakh Deniz gas condensate field is located 100 km southof the city of Baku on the Caspian Sea Shelf at depths up to 700 meters. The contract territory covers 860 km2. Commercial reserves were discovered in March 2001.

Commercial production was begun in the end of 2006. Provedreserves as of December 31, 2006 were 105 mln barrels of oiland 3,142 bcf of gas.

The share of the Company in proved reserves at the end ofDecember 2006 was 10 mln barrels of oil and gas condensateand 314 bcf of gas.

D�222 (Yalama)

Signing of the agreement: 1997 and 2003

Duration of the agreement: to 2035

Type of agreement: PSA; exploration & production (oil, gas)

Stake of LUKOIL Group: 80% (operator)

Other project participants: Azerbaijan State Oil Company (20%)

Block D�222 is a part of the Yalama structure, which straddlesthe Azerbaijani and Russian sectors of the Caspian Sea. Theblock is located 30 km from the coast at depths between 80 and700 meters. A set of agreements signed in 2003 lays down additional conditions for exploration and development of D�222,including increase of LUKOIL's project stake to 80% and expansion of the contract area to 3,000 km2. In 2006 the contract area was reduced in size, to 1,300 km2, and the geological exploration period was extended to November 1,2009.

Seismic studies of the block were completed in 2004. Drilling ofa prospecting well began in that year and was completed in2005. Commercial reserves were not found. Analysis andassessment of data was continued.


Signing of the agreement: 2004


Type of agreement: PSA; exploration & production (gas)

Share of LUKOIL Group in profit: 90% (operator)

Other project participants: Uzbekneftegaz (10%)

The agreement is for development of the Khauzak and Shadysections of the Dengizkulskoye field and the Kandym group offields (Kandym, Kuvachi�Alat, Akkum, Parsankul, Khodzhi, andWest Khodzhi), as well as exploration work at the Kungradsky

Baku

AZERBAIJAN

Shakh Deniz

D�222 (Yalama)

Khauzak – Shady

Tashkent

UZBEKISTAN

Kandym

Aral

39

block. The contract territory at Khauzak, Shady and Kandymgroup is 431 km2 and the contract territory of the Kungradskyblock is 3,700 km2. Proved reserves as of December 31, 2006were 8 mln barrels of oil and 2,960 bcf of gas.

The Company’s share in proved reserves at the end of December2006 was 8 mln barrels of oil and gas condensate and 2,758 bcfof gas.

LUKOIL began seismic exploration at the territories and complet�ed an ecological audit in 2005. At the Kungradsky block two wells(Shege�1 and Shege�2) were acquired, demothballed, and tested.Shege�1 was found to be productive: it gave commercial flows ofgas at a daily rate of 12.3 mcf.

Production drilling and construction of an initial gas treatmentfacility advanced rapidly at the Khauzak area, and there was alsorapid progress with construction of gas collection points, a settlement for field personnel, an approach road and electricitytransmission cables in 2006.

Launch of industrial production of gas at the Khauzak and Shadyfields is scheduled for 2007, and annual volumes are expected tobe 10 bcm. The Kandym group development project includes construction of a gas chemical complex with annual capacity of8 bcm (the first part of the complex should be commissioned in2010). Drilling of 240 operating wells and construction of morethan 1,500 km of pipelines are also planned.

Aral

Signing of agreement: 2006

Duration of agreement: 35 years

Type of agreement: PSA, exploration & production(oil and gas)


Other project participants: Uzbekneftegaz (20%), Petronas (20%), CNPC (20%), KNOC (20%)

The PSA provides for geological exploration and development ofhydrocarbon fields in the Uzbek sector of the Aral Sea.

Studies of the contract territory have been limited to date andthe outlook for new discoveries is good. The three�year geological exploration program includes 2D seismic work (2,300km) and drilling of two exploration wells.

Block А

Signing of agreement: March 2004

Duration of agreement: 40 years

Type of agreement: agreement, exploration & production(gas and condensate)


Other project participants: Saudi Aramco (20%)

Block A is located in the northern part of the Rub Al�Khali Desert,alongside the Ghawar field, which is the largest in the world. Theblock covers 30,000 km2, and the time allowed for geologicalexploration is 5 years. 2D and 3D seismic surveys will be carriedout in that period and at least 9 exploratory wells will be drilled.

In 2004 a tender for seismic exploration work was carried out,work began on interpretation of available geological and geophysical data and new 2D and 3D seismic studies were commenced.

Interpretation of data from 2D and 3D�Sparse studies began in2005 and preparations were made for drilling of a first well at theTukhman structure.

Drilling of the first exploration well at the Tukhman structurewas successfully completed in 2006. The well was drilled to adepth of 4,800 meters and a hydrocarbon accumulation was discovered. Analysis of geological information obtained is now inprogress. Exploration drilling at the Muleikha structure was alsocarried out in 2006, and the East Tukhman and West Faidakhstructures were prepared for drilling.

Anaran

Project entry: 2003

Duration of agreement: to October 2006*

Type of agreement: service; exploration (oil, gas)


Other project participants: Norsk Hydro (75%, operator)

The Anaran block is located in the western part of Iran. The contract area is 3,500 km2 and three promising structures have

Block A

Riyadh

SAUDI ARABIA

Anaran

Tehran

IRAN


* Negotiations on field development launch were begun with the National Iranian Oil Company (NIOC) in June 2006.

FACT BOOK 2007

40

been found: Azar, Shangule and Mousian.

Drilling of the first exploratory well Azar�2, was successfullycompleted in 2005. The well was drilled at the Azar structure to adepth of 4,800 meters. Well testing found 5 intervals with daily oilflows between 2,214 and 3,044 barrels. A declaration on commercialization of the field was signed by the National IranianOil Company and negotiations on field development were startedin 2006. Drilling of the second exploration well was completed.The well gave daily oil flows up to 4,500 barrels. The Azar fieldwith geological reserves of 2 billion barrels of oil is one of theworld's biggest discoveries of oil in the last decade.

West Qurnah�2

Signing of agreement: 1997


Type of agreement: PSA, production (oil, gas)

Stake of LUKOIL Group: 68.5%

Other project participants: SOMO (25%),Zarubezhneft (3.25%), Mashinoimport (3.25%)

The West Qurnah field is part of the huge Rumaylah field and islocated in southern Iraq, north�west of the city of Basra. Provedreserves at the field are estimated at 6 bln barrels of oil.

The project is currently suspended pending agreement with thenew Iraqi government. There are plans to give a 17.5% stake inthe project to ConocoPhillips, which will improve chances ofwork commencing in the near future.

Condor

Signing of agreement: June 2002


Type of agreement: association; exploration & production(oil, gas)


Other project participants: ECOPETROL (30%)

The Condor block is located in the Llanos oil & gas basin and covers an area of more than 3,000 km2. Conditions of the agreement give a maximum 6 years for exploration and 22 yearsfor development (30 years for gas sectors).

Drilling of a prospecting and assessment well was completed in2006 (3D seismic work was carried out earlier). The well wasdrilled to a depth of 4,500 meters in the dome of the Medinastructure. Testing gave a flow of high�quality Colombian oil(Vasconia) at a daily rate of more than 1,200 barrels. Presence ofa field with commercial reserves was thus confirmed. Reservesof the field will be specified following analysis of informationobtained during drilling and testing and by further explorationdrilling. Preparation for production testing of the drilled well wasbegun.

Junin�3



Type of agreement: reserve assessment agreement

Stake of LUKOIL Group: each party is responsible for its own costs

Other project participants: PDVSA

Condor

Bogota

COLOMBIA

WestQurnah�2

Bagdad

IRAQ

Caracas

VENEZUELA

Junin�3

41

The Junin�3 block is located in Anzoategui state (the Orinoco oilbasin) and covers an area of 640 km2.

The first stage of joint studies to assess hydrocarbon reserves atthe block was completed in 2006. The work has providedcomplex proof of high potential of Junin�3. Drilling of stratigraphic wells was begun as part of the second stage ofwork at the block. The aim of the second stage is to complete ageological model using new seismic and drilling data, and tocompare these data with the results of work at neighbouringblocks. A total of 17 stratigraphic wells will be drilled at Junin�3.

CI�205

Signing of agreement: July 2001

Acquisition of a stake: July 2006


Type of agreement: PSA, exploration & production


Other project participants: PETROCI Holding (37%)

Block CI�205 is located on the deep water shelf of the Gulf ofGuinea, 100 km from the shoreline of Cote d'Ivoire. The blockcovers 2,600 km2 and is part of the Tano oil & gas basin.The Baobab field – the largest Cote d'Ivoire field – is located 15km from the block.

4,900 km of 2D and 2,400 km2 of 3D seismic exploration havealready been carried out at the block. An exploration well will bedrilled as part of the second exploration phase, which is nowbeing implemented.

CI�205

Abidjan

COTE D’IVOIRE


Oil refining

Petrochemicals

Gas processingRetail and wholesalesalesWholesale deliveries

Main R&M regions of LUKOIL Group

FACT BOOK 2007

42

REFINING (INCLUDING PETROCHEMICALS) AND MARKETING

MAIN INDICATORS FOR 2006:

Refineries 7

Refinery throughputs, mln tons 48.88

Capacity utilization, % 90

Gas�processing plants 4

Gas processing, mcm 2,647

Petrochemical plants 4*

Petrochemical production, mln tons 2.04

Filling stations 5,793

Oil exports, mln tons 44.13

Petroleum product exports, mln tons 20.5

Oil sales, mln tons 42.84

Wholesale petroleum product sales, mln tons 72.71

Retail petroleum product sales, mln tons 11.17

R&M net profit, $ mln 3,748

R&M capex, $ mln 1,647

Employees in the segment, th. people 70.2

* Including Burgas Refinery.

Refining & marketing is LUKOIL's second major business segment. By developing this segment the Company lowers itsexposure to high price volatility on the crude oil market andenhances its competitive position in main business regions byproduction and sale of high�quality petroleum products with largeshare of value�added. Price volatility on the market for petroleum products is between three and four times lower thanvolatility of prices for oil. So by developing its refining and marketing business LUKOIL supports multi�billion dollar investment in field exploration and development, helping to guarantee steady growth of income to shareholders.Development of refining & marketing is an integral part of theCompany's strategy for a long�term balance between the exploration & production and refining & marketing segments. (At present LUKOIL refineries can process only half of theCompany's crude production). LUKOIL currently produces awide range of high�quality petroleum and gas products andpetrochemicals, selling them via wholesale and retail in more than 20 countries.

Strategy

* To produce high�quality, environmentally friendly petroleum products with high share of value�added

* To increase light product yield

* To increase refining capacities

* To control production costs

* To optimize logistics: lowering transportation costs

* To increase efficiency of trading operations

* To increase retail sales volumes of petroleum products and related products and services

43

2.8

–

3.2

2.32

9.92.4

8.8

7.06

8.3

17.0

14.26

3.6 3.7

3.56

2.5 12.0

11.86

8.0

0.4

0.20

11.0

9.62

5.0

44.1

39.50

14.0

9.38

58.1

48.88Throughput

in 2006,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 is working hard to develop its existing refineries and isconsidering various alternatives for acquisition or construction ofnew refining capacities in order to achieve a balance betweenproduction and refining. LUKOIL's strategic goal is to maximizevalue�added of its output and profitability of its operations, and toincrease the contribution of refining business to Company valuecreation.

At the time of its establishment in 1993 LUKOIL had only tworefineries, at Perm and Volgograd, with combined annual capacity of about 23 mln tons. Today the Group includes 7 majorrefineries, of which 4 are in Russia and 3 are abroad (in Ukraine,Bulgaria and Romania), as well as 2 mini�refineries in Russia.Total annual capacity of Company refineries is 58.1 mln tons. Therefineries have modern conversion and reforming facilities andproduce a wide range of quality petroleum products. The qualityof facilities and efficiency of the Company's refineries in Russiais higher than the national average, and LUKOIL's European

refineries are a match for competitors. Oil refining volumes atLUKOIL Group refineries have grown by 28% in the last 5 years,to 48.88 mln tons in 2006.

LUKOIL is constantly modernizing its refining capacities, reactingquickly to main market trends. The Company uses the latesttechnologies in modernization of its refineries in order toimprove quality of production and reduce environmental impact.The Company is rapidly introducing European quality standardsfor motor oils at all its refineries. This will offer significant competitive advantages in the future and already ensures a pricepremium, reflecting the environmental and functional qualities ofCompany products. In the last 4 years the share of high�qualitydiesel fuel (Euro�3, Euro�4 and Euro�5) in overall production ofdiesel at Company refineries has risen from 10% to 68%. Thegoal is for all production at LUKOIL's Russian refineries to meetEuro�4 standards by 2014 and for all of the Company's foreignrefineries to meet Euro�5 standards by the same time.

REFINING AND MARKETING

LUKOIL Group refineries

OIL REFINING

In 2005 LUKOIL became the first Russian oil company to begin large�scale production of Euro�4diesel fuel with enhanced environmental characteristics at refineries in Russia. This fuel meets EN�590:2004 environmental standards for diesel fuel, which have been in force in the EuropeanUnion since 2005. Apart from extending engine life and saving fuel, use of LUKOIL Euro�4 morethan halves carcinogenic emissions from engines. Production of Euro�4 diesel fuel amounted to 5.3mln tons in 2006. Moreover Russian refineries of the Group produced about 1 mln tons of dieselfuel which meets Euro�5 standard.

FACT BOOK 2007

44

In 2006 LUKOIL began production of gasoline that meets the EU's Euro�3 standard. This was

made possible by commissioning of an isomerization block on the gasoline catalytic

reforming facility at the Company's Nizhny Novgorod Refinery. Euro�3 gasoline will in future

represent 50% of total output of motor gasolines at the Refinery.

LUKOIL has developed its own "EKTO" brand (Russian abbreviation for "ecological fuel") on the

basis of the new gasoline, and sales of EKTO�92 and EKTO�95 have begun at the Company's

filling stations in Russia. The new fuels contain a multifunctional combination of additives to

improve their operating performance (including cleaning and anti�corrosion characteristics).

Launch of the new fuel brand represents an important step in development of the Company's

marketing sector.

The Company is also increasing production of high�octane gasolines to European environmental standards in response togrowing demand and gradual changeover to new ecological standards for motor fuels.Production of fuel oil will decline by 1.7–2 times by 2016compared with 2006 as part of the general plan for developmentof Company refineries during this period, while output of more

expensive products will increase. This will be achieved by construction of conversion facilities at nearly all Company refineries. Economic indicators of refineries will improve significantly as a result, since prices for fuel oil are 2.5–3 timeslower compared to light products on both Russian and international markets.

Production and sale of lubricants is a distinct business withinLUKOIL. The Company makes more than 85 lubricant brands tothe latest specifications: lube basestock (used as raw materialsfor production of motor oils, lubricants and additives); industrialoils for equipment uses; motor and transmission oils. TheCompany makes more than a million tons of lubricants each year.In Russia LUKOIL makes lubricants at the Perm, Volgograd andNizhny Novgorod Refineries and also mixes lubricants at Beloil

plant (Tyumen region). The Company share in total Russianproduction of lubricants is over 40%. Mixing and packaging oflubricants is carried out at foreign enterprises of LUKOIL Group(Petrotel�LUKOIL and Oy Teboil). Lubricants produced at LUKOIL enterprises are sold in 20countries, and the Company plans major expansion of its salesnetwork in the near�abroad countries, the Baltics, and South�EastAsia.

LUKOIL motor oils meet international standards, set by the Society of Automotive Engineers (SAE), the American PetroleumInstitute (API), the Association des Constructeurs Europeens d'Automobiles (ACEA) and the Russian Association of AutomobileEngineers (AAE). The Company's lubricants are made using top�quality additives supplied by Infineum, Lubrizol, Afton Chemical,Chevron Oronite and Rohmax Additives.The excellent performance qualities of LUKOIL motor oils are acknowledged by major automotive manufacturers in Russia andabroad. The Company's lubricants have been successfully tested at international certification centres on engines made byDaimlerChrysler, BMW, Volkswagen, MAN and Porsche.

45

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Bitumen Blowing

Gas FractionationGas

Catalytic Reforming

Coke Calcination

Delayed Coking

Vacuum

gas oil

Gasoline

CokeVacuum

residue

Gasoline

LPG

Gasoline

Hydrotreating

Fuel oil

Production of Lubricating Oils

Bitumen

Lubricating oils

Production ofAdditives

Production ofSolid Paraffins

Solid paraffins

Diesel fuel Diesel fuel

Coke

Naphta

Vacuum gas oil

Jet fuel Jet fuel

Coke

Production of Sulfur Sulfur

VOLGOGRAD REFINERY

ООО LUKOIL�

Volgogradneftepererabotka

The Refinery produces fuels andlubricants

Located in southern Russia

Refines a light blend of West�Siberianand Lower�Volga crudes

Crude oil is supplied to the Refineryvia the Samara – Tikhoretsk pipeline

Petroleum products are shipped byrail, road, river and pipeline transport

Capacity – 11.0 mln tons per year

Nelson index – 5.0

Main conversion process iscoking (16,200 barrels per day)

VOLGOGRADREGION

to Tikhoretsk

Volgograd

Volgodonsk

from Samara

Volgograd Refinery

Refinery throughput, mln tons

0 2 4 6 8 10

2002

2003

2004

2005

9.62

9.23

8.98

7.66

2006

8.44

The Refinery was put into operation in1957.

In 1991 the Refinery entered LUKOIL

Group.

In 1994 equipment for initial refining andgasoline reforming was rebuilt.

In 1997–1998 the Refinery launchedautomatic equipment for blending ofgasolines and a rail trestle for crude oildischarge.

In 1998–2001 the Refinery launchedequipment for hydrotreatment of dieselfuel, naphta stabilization and fractioning ofsaturated hydrocarbon gases.

In 2002–2003 the Refinery was equippedwith a lubricant�packaging line, designedfor 200�liter drums, and a storage facilityfor marketable lubricants. These

improvements enabled doubling of marketable lubricant production.

In 2004 installations for fine fractionationof gasoline and the reforming unit wererebuilt, significantly increasing the octanenumber of gasoline components and morethan halving use of high�octane additives.

In 2005 the first stage of a coke calcination facility with annual capacity of 100,000 tons was completed which enabled production of high�quality, marketable calcinated coke.

In 2006 the Refinery completed construction of a catalytic reforming unitwith annual capacity of 1 mln tons inorder to reduce output of straight�rungasoline and to increase output of high�octane gasoline.

Current modernization

Construction of an isomerization unit with 385,000 tons annual capacity by the end of 2007

Reconstruction of delayed coking unit by 2010

Construction of a unit for hydrotreat�ment of diesel fuel by 2010

Construction of a FCC unit by 2013

History of Refinery

Quality of products

From 2002 the Refinery producesdiesel fuel with sulfur content below 0.035%

The Refinery produces 515,000 tonsof mineral, semi�synthetic andsynthetic lubricants to Russian andinternational (API) standards per year


FACT BOOK 2007

Atm

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dis

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Catalytic ReformingGasoline

Platforming Process for Aromatics Production

Gasoline Benzene

Toluene

Solvent

HydrotreatingDiesel fuel

Jet fuel

Naphta, Vacuum gas oil

Catalytic CrackingGasoline, diesel fuel

Hydrocracking

Gas oil

Diesel fuel

GasolineVacuum gas oil

Vacuumgas oil

Delayed CokingCoke

Gasoline

Bitumen Blowing

Production of Lubricating Oils

Bitumen

Lubricating oils

Vacuum

residue

Vacuum gas oil

Gas Fractionation

Gas

Fraction С4 Production of Solid ParaffinsParaffins

Diesel fuel

Jet fuel

Fuel oil

Fraction C3

Production of Sulfurand Sulfuric Acid

OOO LUKOIL– Permnefteorgsintez

The Refinery produces fuels, lubricants and petrochemicals

Located 9 km from the city of Perm

Refines a blend of crudes from thenorthern part of Perm Region andfrom Western Siberia

Crude oil is supplied to the Refineryvia the Surgut–Polotsk pipeline andthe Kholmogory–Klin pipeline

Petroleum products are shipped byrail, road, and river transport, and alsovia the Perm–Andreyevka–Ufa

product pipeline



Main conversion processes are hydrocracking (T�Star, 65,200 barrels

per day), catalytic cracking (13,000

barrels per day), coking (15,800

barrels per day)


0 2 4 6 8 10 12

2002

2003

2004

2005

11.86

10.98

11.13

11.05

2006

11.05

PERM REFINERY

PermRefinery

Krasnokamsk

from Surgut

to Polotsk

from Kholmogori

to Klin

PermKama

reservoir

PERMREGION

46



Group.

In 1993–1998 a large�scale program ofreconstruction was carried out at theRefinery. The program included extensiverebuilding of coking equipment,installation of a vacuum distillation unit,installation of modern lubricant production,and creation of a system for protecting theenvironment.

In 1999 the Refinery launched newequipment for utilization of hydrogensulfide and production of sulfuric acid.

In 2004 the Refinery launched a refining complex, designed for hydrotreating andhydrocracking of a mixture of vacuum

distillates and secondary components forproduction of low�sulfur feedstock for catalytic cracking, low�sulfur diesel fuel.

In 2005 reconstruction of the vacuumblock on distillation unit №4 was completed and will enable additional annual production of 240,000 tons of vacuum gas oil. Also an assembly for introduction of diesel fuel additives wasinstalled on the hydrodearomatization unit,ensuring that all diesel fuel productionmeets the EN�590 European standard.

In 2006 a program for reconstruction andrenewal of fixed assets and technologiesin the period up to 2016 was developed,adhering closely to strategic goals of theGroup.


Construction of an isomerizationunit by 2008

Construction of a catalytic cracking complex by 2016

Quality of products

From 2004 the Refinery produces diesel fuel with sulfur content below50 and 10 ppm (Euro�4 and Euro�5)

The Refinery produces mineral, semi�synthetic and synthetic lubricants toRussian and international standards (API)

The Refinery was certified in accor�dance with the ISO 9001:2000

quality control standard

History of Refinery

47

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Catalytic Reforming

Hydrotreating

Bitumen Blowing

White spirit

Fuel oil

Vacuum gas oil

Gasoline

Production of Sulfuric AcidSulfuricacid

Vacuum

gas oil Production of Lubricating OilsLubricating oils

Production of Additives

Production ofSolid Paraffins

Paraffins

Vacuum

residue

Gasoline

Diesel fuel

Jet fuel

Diesel fuel

Jet fuel

Bitumen

IsomerizationNaphta Gasoline

ОAО LUKOIL�

Nizhegorodnefteorgsintez

The Refinery produces fuels andlubricants

Located in the town of Kstovo inNizhny Novgorod region

Refines a blend of West Siberian oils

Crude oil is supplied to the Refineryvia the Almetyevsk–Nizhny

Novgorod and Surgut–Polotsk

pipelines

Petroleum products are shipped byrail, road and river transport and bypipeline



The Refinery has no conversion processes. Upgrading processes are reforming and hydrotreatment ofdiesel fuel

NizhnyNovgorod

Kstovo Cheboksary

NIZHNY NOVGORODREGION

Nizhny NovgorodRefinery

from Surgut

from Almetyevskto Polotsk


0 3 6 9 12 15

2002

2003

2004

2005

14.26

13.47

12.33

11.77

2006

10.65

NIZHNY NOVGOROD REFINERY



Group.

In 2002 the Refinery rebuilt one of itsdistillation units, as well as refittinghydrotreatment equipment and a flareinstallation.

In 2003 the Refinery commissioned theonly large�scale production of paraffins forfood product packaging in Russia.Modernization increased production andexport of paraffins while reducing production costs by lowering relativespending on reagents.

In 2004 the Refinery installed a catalyticreforming unit with annual capacity of 1 mln tons, allowing increased productionof high�octane gasoline while reducing

consumption of high�octane additives; theRefinery began production of Jet A�1 jetfuel and LUKOIL EN�590 diesel fuel.

In 2005 a vacuum separator was added tothe distillation unit, which will increaseyield of vacuum gas oil. Reconstruction ofa unit for isomerization was carried out.

In 2006 an isomerization unit with 440,000

tons annual capacity was commissionedwhich enabled launch of gasoline production to Euro�3 standards.Modernization of distillation unit�6 wascompleted, increasing its capacity to 9 mln tons. The hydrotreatment unit wasalso rebuilt, reducing sulfur content in pro�duced diesel fuel to below 50 ppm (meet�ing the Euro�4 standard) and making itpossible to start production of diesel fuelwith sulfur content below 10 ppm (theEuro�5 standard).


Construction of a visbreaking unit by 2008

Construction of a deep�refiningcomplex, including catalytic cracking,alkylation and vacuum gas oil hydrotreatment units by 2011

History of RefineryQuality of products

From 2004 the Refinery producesdiesel fuel with sulfur content of50 ppm (Euro�4)

From 2006 the Refinery produces gasolines to Euro�3 standards and diesel fuel to Euro�5 standard

The Refinery produces mineral and semi�synthetic lubricants to Russian and international (API) standards – 254,000 tons in 2006

The enterprise was certified inaccordance with the ISO 9001:2000

quality control standard


FACT BOOK 2007

UKHTA REFINERY

Atm

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c a

nd

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dis

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on

Catalytic Reforming

Hydrodeparaffinization of Diesel Fuel

Bitumen Blowing

Fuel oil

Naphta

Vacuum gas oil

Diesel fuel

Bitumen

GasolineGasoline

Vacuum

residue

Diesel fuel

Production of Sulfur Sulfur

Jet fuel

OAO LUKOIL�

Ukhtaneftepererabotka

The Refinery produces fuels

Located in the central part of theKomi Republic

Refines a blend of crudes fromoil fields in Komi and Yareg heavy oil

Crude is supplied to the Refinery viathe Usa–Ukhta pipeline

Petroleum products are shipped fromthe Refinery by rail and road



The Refinery has no conversion processes. Upgrading processes are reforming and hydrodeparaffinization of diesel fuel

UkhtaRefinery

Ukhta

KOMIREPUBLIC

Nizhny Odes

Troitsko�Pechorsk

from Usa


0 1 2 3 4

2002

2003

2004

2005

3.56

3.41

2.89

3.62

2006

3.61

History of Refinery

48



Group.

In 2001–2002 a distillation unit wasreconstructed, a gasoline reservoir andnitrogen station were built.

In 2003 the Refinery commissioned aninstallation for hydrodeparaffinization ofdiesel fuel, including a sulfur�recoveryblock, which allowed the Refinery to startproducing winter and Arctic diesel brands.

In 2004 a trestle for crude discharge andlading of dark petroleum products was putinto operation, allowing the Refinery toaccept a wider range of oil inputs; the firststage of reconstruction of a catalyticreforming unit was completed, improving

its performance and increasing its annualcapacity by 35,000 tons.

In 2005 a Recovery�Plus block for increasing hydrogen concentration wasinstalled in the hydrodeparaffinization unit,which has current annual capacity of250,000 tons of Arctic fuel.

In 2006 construction of the second stageof a loading facility for oil and petroleumproducts with annual capacity of 4 mln

tons was completed. Re�equipment of thecatalytic reforming unit was also complet�ed increasing its annual capacity from300,000 to 380,000 tons and loweringgasoline production costs.


Construction of a visbreaking unit by 2009

Construction of an isomerization unit by 2010

Quality of products

From 2003 the Refinery transferred toproduction of winter and Arctic brands of diesel fuelFrom 2005 the Refinery began production of diesel fuel with sulfur content below 50 and 10 ppm

49

Tyumen

Uray Irtysh

KHANTY�MANSIAutonomous District

Mini�refineryin Uray

Tobolsk

MINI�REFINERY IN URAY

Bitumen BlowingBitumenVacuum residue

Atm

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c a

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dis

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Naphta

Gasoline

Diesel fuel

Fuel oil (returned to oil)

Urayneftegaz


Located in Uray

Refines a blend of local crudes

Topping mini�refinery equippedonly with an atmospheric andvacuum distillation unit, and bitumenunit

Capacity – 100,000 tons per year

Put into operation by LUKOILGroup in 1995

MINI�REFINERY IN KOGALYM

Atm

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Bitumen Blowing


BitumenVacuum residue

Gasoline

Naphta

Jet fuel

Diesel fuel

Fuel oil (returned to oil)

Noyabrsk

MegionObNefteyugansk

Mini�refineryin Kogalym

Nizhnevartovsk

Kogalym

Surgut

KHANTY�MANSIAutonomous District

Kogalymneftegaz


Located in Kogalym

Refines a blend of local crudes

Topping mini�refinery equippedonly with an atmospheric andvacuum distillation unit, acatalytic reforming unit and abitumen unit

Capacity – 300,000 tons per year

Put into operation by LUKOILGroup in 1997


FACT BOOK 2007

PLOIESTI REFINERY

AO Petrotel�LUKOIL, Romania


Located in Ploiesti (central part ofRomania), 55 km from Bucharest

Refines Urals crude (Russian exportblend)

Crude oil is supplied to the Refineryby pipeline from the Black Sea port ofConstanca

Petroleum products are shipped by rail and road


Nelson index – 9.9 (the highest ofall LUKOIL Group refineries)

Main conversion processes arecatalytic cracking (18,500 barrels

per day) and coking (10,500 barrels

per day)

History of Refinery

50


In 1999 the Refinery entered LUKOILGroup.

In 2001 the Refinery started production ofhigh�octane gasoline (super) and low�sulfur diesel fuel (sulfur content below0.035%).

In 2001 the Refinery suspended opera�tions in order to carry out reconstruction.

The work included:

– modernization of facilities for initialrefining, hydrotreatment, reforming, coking, catalytic cracking, gasfractionation and isomerization

– construction of facilities for hydrotreat�ment of gasoline, catalytic cracking and production of hydrogen

– reconstruction of purificationequipment, installation of sulfurrecovery equipment and a power generating facility

In 2004 the Refinery was relaunched aftermajor reconstruction.

In 2005 the Refinery achieved planned efficiency levels. A system for dehydrationof inputs using a molecular sieve wasassembled on the isomerization unit; injection of secondary combustion additives was begun, allowing increase ofthe octane number in the catalyzer of thecatalytic cracking unit.

In 2006 a unit for production ofMTBE/TAME high�octane additives wasinstalled saving on purchases of high�octane additives for gasoline production.


Reconstruction of FCC gasoline hydrotreating unit, coking unit and distillation unit�3 by 2009

Reconstruction of energy generating unit by 2009

Reconstruction of catalytic cracking unit by 2010

Quality of products

Since 2004 the Refinery producespremium and super gasoline gradesas well as diesel fuel to Euro�4 andEuro�5 standards

Atm

osp

heri

c a

nd

vacu

um

dis

tillati

on

Distillates Hydrotreating

Delayed Coking

IsomerizationLight

gasoline


Gasoline Hydrotreating

Diesel fuel

Catalytic CrackingVacuumgas oil

Fuel oil

Coke

Vacuum

residue

Gasoline

Gasoline

Gasoline

Diesel fuel

Blending and Packaging of Lubricants

Lubricant components Lubricating oils

Gasoline

Production of SulfurSulfur

Constanca

BULGARIA

Ploiesti Refinery

Ploiesti

Danube

Blacksea

ROMANIA

Bucharest


0.0 0.5 1.0 1.5 2.0 2.5

2002

2003

2004

2005

2006 2.32

2.41

0.36

–

–

51

Atm

osp

heri

c a

nd

vacu

um

dis

tillati

on

Platforming Processfor Aromatics Production

Bitumen Blowing

AlkylationButane

Catalytic Reforming

Diesel fuel

Jet fuel

Vacuum

gas oil

Gasoline

Gasoline

Hydrotreating

Catalytic Cracking

Thermal Cracking

Pyrolysis

Gasoline

Vacuum

residue

Naphta

Benzene

Toluene

Solvent

Gasoline

Diesel fuel

Gas oil

Gasoline

Gas oil

Fuel oil

Bitumen

Diesel fuel

Jet fuel

Petrochemicals

Production of Sulfurand Sulfuric Acid

Sulfur

Sulfuric acid

BURGAS REFINERY



Group.

In 2001 the Refinery began production oflight high�octane gasolines for marketingin Western Europe and the USA.

In 2002 the Refinery started to produce 5new products to European standards,including products meeting EN�228 andEN�590 standards.

In 2003 work was focused on reconstruc�tion of the catalytic reforming unit and thereactor�generator block of the catalyticcracking unit.

In 2004 the catalytic reforming unit wasrebuilt increasing its annual capacity to 600,000 tons, a catalytic agent wasreplaced and facilities for hydrotreatmentof diesel fuel were rebuilt, a catalytic

cracking unit was rebuilt to increase itsannual capacity to 2.0 mln tons and raiseoutput of gasoline, diesel fuel, and propane�propylene fraction.

In 2005 the regenerator of the catalyticcracking unit was rebuilt, a system wasput in place for altering fuel inputs to the power and heat generating stationdepending on market price trends for boiler fuel and gas. Also construction of aunit for production of gaseous sulfur(30,000 tons annual capacity) was completed.

In 2006 most of the work needed forinstallation of a n�butane isomerization unitwas carried out. Measures were taken toreduce emissions.

AO LUKOIL Neftokhim Burgas,

Bulgaria

The Refinery produces fuels andpetrochemicals

Located on the Black Sea coast, 15km from the city of Burgas

Refines Russian export blends

Oil is supplied to the Refinery bypipeline from the port of Rosenets

Petroleum products are shipped byrail, road and sea transport, and alsothrough petroleum product pipelines to central regions of the country



The main conversion process at therefinery is catalytic cracking (29,600

barrels per day) and thermal cracking (26,000 barrels per day)

Quality of products

In 2003 gasoline production was fullyupgraded to high�octane, unleadedproducts and production of cleandiesel fuel with sulfur content below0.035% was increased

In 2005 the Refinery began production of diesel fuel and gasoline with maximum sulfur content of 50 ppm (Euro�4)


0 2 4 6 8

2002

2003

2004

2005

2006 7.06

6.17

5.26

4.96

4.76

History of Refinery

Burgas Refinery

ROMANIA

BULGARIA

Danube

Varna

Burgas

Constanca

Blacksea


Construction of n�butane isomerization unit by the end of 2007

Reconstruction of catalytic cracking unit by the end of 2007

Rebuilding of atmospheric and vacuum distillation unitsReconstruction of alkylation unit by 2008

Construction of a FCC gasoline and diesel fuel hydrotreatment unit by 2009

Construction of a complex for refining of heavy residual stock by 2012


FACT BOOK 2007

52

ODESSA REFINERY



Group.

In 2001 the Refinery began production ofvacuum gas oil and oil bitumen.

In 2004 the Refinery launched an isomerization unit with annual capacity of120,000 tons, increasing total annual production of high�octane gasolines. Thecatalytic reforming unit and a trestle forlading of light petroleum products intotank wagons were rebuilt (capacity wasincreased by 200,000 tons). Desalting anddistillation facilities were reconstructed.

In mid�2005 the Refinery was closed

down for major reconstruction and

modernization.

As a result of modernization:

– depth of refining will be increased

– output of light products and Nelson index will rise

– more high�octane gasoline will be produced

– production of Euro�3 diesel fuel will be increased

Atm

osp

heri

c a

nd

vacu

um

dis

tillati

on

Catalytic Reforming

Hydrotreating

Bitumen Blowing

Fuel oil

Naphta

Vacuum gas oil

Diesel fuel

Bitumen

Gasoline

Isomerization

Gasoline

Lightgasoline

Gasoline

Vacuum

residue

Diesel fuel

Jet fuelJet fuel

Sulfur

OAO LUKOIL�Odessky NPZ, Ukraine


Located near port of Odessa

Refines Urals crude (Russian exportblend)

Crude oil is supplied to the Refineryby pipeline from Russia

Petroleum products are shipped byrail and road transport, and also bypipeline to Odessa port, where theyare loaded for export



The Refinery does not carry outconversion processes, but upgradesproducts by reforming, hydrotreatment of diesel fuel andisomerization

OdessaRefinery

Odessa

Ilyichevsk

Black Sea

Voznesensk

UKRAINE

Kherson Dnieper

Nikolaev


From mid�2005 refinery operationswere halted for major reconstructionwork

Construction of a visbreaking unit bythe end of 2007

Reconstruction of the atmospheric and vacuum distillation unit and hydrotreatment unit by the end of 2007

Construction of energy generating unit with annual capacity of 18 megawatt by 2009


0 1 2 3

2002

2003

2004

2005

2006 –

1.39

2.45

2.83

2.49

History of RefineryQuality of products

Since 2004 the share of high�octane gasoline exceeds 80% in totalvolume of motor gasoline

53

GAS PROCESSING

700

265

1,900

1,3993,555

2,647

505

542

700

583

450

441

161

45

861

628Usinsky Plant

UsinskKomi

PermneftegazpererabotkaPerm

Korobkovsky PlantKotovo

Volgograd Region

Lokosovsky PlantLangepas

Western SiberiaTotal Gas

processingProcessing ofliquid hydrocarbons

Capacity,mcm/year

Processingin 2006,

mcm

Capacity,th. tons/year

Processingin 2006,th. tons

History and description

Processes gas from oil fields of LUKOIL�Nizhnevolzhskneft and NGL

Capacity – 450 mcm per year of gas, 161,000 tons per year of NGL

Marketable products – stripped gas, stable gas naphta and LPG

Consumers – petrochemical enterprises, foreign marketing units of LUKOIL Group and local consumers

Put into operation in 1966. Acquired in 1996.

In 2001–2003 external energy supply was overhauled and a steam unit was launched

Permneftegazpererabotka


Processes gas from oil fields of LUKOIL�Perm, wet gas from Perm refinery and NGL from Lokosovsky Gas�processing Plant

and Perm refinery

Capacity – 505 mcm per year of gas, 700,000 tons per year of NGL

Marketable products – stripped gas, stable gas naphta, isopentane, LPG, sulfur, sodium bisulfite

Consumers – Perm refinery, Stavrolen, foreign marketing units of LUKOIL Group and local consumers

Put into operation in 1969. Entered LUKOIL Group in 1998.

In 2000 a new desulfurization unit was launched. In 2003 the gas fractionation unit was rebuilt to increase NGL processing

capacity. A sodium bisulfite unit was put into operation in 2005. Reconstruction in 2006 increased capacity from 550,000 tons

to 700,000 tons per year of NGL.

Gas�processing plants of LUKOIL Group

The Company's gas�processing plants process associated petroleum gas and natural gas liquids from fields in Russia. Theplants produce marketable gas, which is fed into the Gazpromgas transport system, as well as liquid hydrocarbons. Gas pro�cessing ensures efficient use of associated petroleum gas by transforming it into marketable product, offering extra profit

without considerable extra raw material costs. Volumes of pro�cessing at Company plants have more than doubled in the last 5years thanks to acquisition of the Lokosovsky Gas�processingPlant and increased volumes of associated petroleum gas pro�duction.

Korobkovsky Gas�processing Plant


54


Processes gas from oil fields in Western Siberia

Marketable products – stripped gas, NGL, stable gas naphta, propane

Consumers – Permneftegazpererabotka and local consumers

Capacity – 1,900 mcm per year

Put into operation in 1983. Acquired in 2002

In 2005 construction of storage tanks with a trestle for lading of NGL was completed. In 2006 reconstruction of the plant was completed increasing its annual capacity from 1.0 to 1.9 bcm per year of associated gas. The work included connection of the plant to the Urengoi–Surgut–Chelyabinsk trunk gas pipeline


Processes gas from oilfields of LUKOIL�Komi

Marketable products – dry and stripped gas, stable gas naphta and LPG

Consumers – oil producing enterprises of LUKOIL Group and local consumers

Capacity – 700 mcm per year

Put into operation in 1980. Entered LUKOIL Group in 2000.

In 2004 the plant launched a gas preparation and processing block, and a gas input station. This enabled the plant to produce

LPG and stable gas naphta

Usinsky Gas�processing Plant

Lokosovsky Gas�processing Plant

PETROCHEMICALS

LUKOIL has carried out extensive development of its petrochemical business since 1997 in order to increase theshare of high value�added products in overall output and reduce dependence on the volatile international crude market. Theseefforts create further potential for growth of the Company shareholder value. Petrochemicals are the most complex end ofthe processing business. LUKOIL owns petrochemical capacities in Russia (Saratovorgsintez and Stavrolen), Ukraine(Karpatneftekhim), and Bulgaria (LUKOIL Neftokhim Burgas, arefinery with its own petrochemical facilities).LUKOIL's petrochemical business is one of the biggest in Russiaand Eastern Europe. The Company makes pyrolysis and organic synthesis products, fuel fractions and polymers, and meets alarge part of Russian domestic demand for several important

chemicals as well as being a large�scale chemicals exporter tomore than 50 countries.Output by LUKOIL's petrochemical plants has risen by nearly30% over the last 5 years and the Company is continuing toincrease capacity levels. A key project for coming years is construction of the Caspian gas�chemical complex, which willprocess natural gas and gas condensate, produced by LUKOIL inthe Caspian region. The purpose of the project is to increasevalue�added by deeper processing of gas feedstock and toensure efficient chemical processing of ethane, natural gasliquids and condensate. The Caspian Complex will make basicorganic synthesis products, polyethylene, polypropylene andother petrochemical outputs. Work on a feasibility study for theComplex proceeded in 2006 and should be completed in 2007.

LUKOIL is now the leading producer of petrochemicals in Russia, the CIS and Eastern Europe. In particular, LUKOIL

is:

* the largest East European producer of olefins (total annual capacity over 1 mln tons)

* 2nd largest East European producer of polyethylene (total annual capacity – 480,000 tons)

* the largest East European producer, only Russian producer and fourth largest producer in Europe of acrylonitrile, a raw material for production of synthetic fibers

* owner of Europe's largest vinyl chloride�monomer plant (annual capacity is 370,000 tons)

* the only Russian producer of polyacrylonitrile fibers

* the largest Russian producer of methyl methacrylate

FACT BOOK 2007

55

Acetone

Used in the paint, food and pharmaceutical industries, and for

production of acetyl cellulose and nitrocellulose, film, plexiglass,

etc. Produced at Saratovorgsintez.

Acetone cyanhydrin

Used for production of methyl methacrylate, resins and in the

pharmaceutical industry. Produced at Saratovorgsintez.

Acetonitrile

Used as a solvent in liquid chromatography, spectroscopy,

analytical chemistry, and in the medical, microbiology and

chemical industries. Produced at the Burgas Refinery and

Saratovorgsintez.

Acrylic fibre

Raw material for the knitwear industry. Produced at the Burgas

Refinery and Saratovorgsintez.

Acrylonitrile

One of the most important monomers for production of acrylic

fibres, butadiene�nitrile rubbers, alkyl� and polyamides, ABS

plastics. Produced at the Burgas Refinery and at Saratovorgsintez.

Alphamethylstyrene

Used as a monomer for production of synthetic rubber, latex and

various waterproof mastics. Produced at Saratovorgsintez.

Ammonium sulfate

A nitrogen fertilizer widely used in agriculture. Produced at

Saratovorgsintez.

Anti�freeze

Liquid with a low freezing point used to cool internal�combustion

engines and various equipment, which operates in temperatures

below zero Celsius. Produced at the Burgas and Perm Refineries.

Benzene

Raw material for production of caprolactam, phenol,

nitrobenzene, and isopropyl benzene. An essential organic

synthesis input for production of pharmaceuticals, plastics

(styrenes and ABS plastics), synthetic rubber and toxic chemicals.

Produced at the Burgas Refinery, Stavrolen and Karpatneftekhim.

Butylene�butadiene fractions and divinyl

Raw material for production of synthetic rubber. Produced at the

Burgas Refinery and Stavrolen.

С5+С9 and С6�С8 fractions

Raw materials for production of motor fuel, solvents and

aromatics. Produced at Stavrolen and Karpatneftekhim.

Caustic soda

More than 95% of soda output is used in the synthetic fibre and

threads industry, as well as for production of ammonia,

caprolactam, base chemicals and for chlorine processing.

Caustic soda is also used in electricity generating industry, the

cellulose and paper industry, the food industry and in medicine.

Produced by Karpatneftekhim.

Ethanolamines

Used for industrial gas purification, for production of

OOO SaratovorgsintezSaratov, Russia

Inputs:

propyleneammoniasulfuric acidbenzeneoleummethanol

Products:

acrylonitrilephenolmethyl methacrylateammonia sulfatesynthetic fiber

OOO KarpatneftekhimKalush, Ukraine

Inputs:naphtadiesel fueln�butaneNGLsaltchlorine

Products:vinyl chloridepolyethyleneethylenepropylenebenzenehydrate of sodium

OOO StavrolenBudennovsk, Russia

Inputs:

naphtapropane�butane fractionNGL

Products:

polyethylenepropylenebenzenevinyl acetate

AO LUKOIL Neftokhim Burgas(Oil refinery with petrochemical complex)

Burgas, BulgariaInputs:

naphtapropane�butane fractionreformatepropylene

Products:polyethylenepolypropylenearomaticsethylene oxideethylene glycolsethanol amineslatexsynthetic fiber

LUKOIL Group petrochemical plants

Main products of LUKOIL petrochemical plants


FACT BOOK 2007

56

detergents, wood preservers, and agricultural herbicides.

Produced at the Burgas Refinery.

Ethylene

Used for production of ethylene oxides, styrene, ethanol, ethyl

chloride, vinyl chloride, vinyl acetate and polyethylene.Produced

at Stavrolen, Karpatneftekhim and the Burgas Refinery.

Ethylene glycol

Used in anti�freeze, production of synthetic fibres, resins, and

solvents. Produced at the Burgas Refinery.

Ethylene oxide

Used in the chemical and petrochemical industries for

production of brake fluids, surfactants, ethylene glycols,

anti�freeze, solvents, plasticizers, monomers for synthetic fibres,

polyester resins and foam rubber. Produced at the Burgas

Refinery.

Heavy pyrolysis resin

Used as a fuel. Produced at Stavrolen and Karpatneftekhim.

Latex

Used in production of a number of materials: paints, putties, con�

toured surfaces and supports. Produced at the Burgas

Refinery.

Methyl acrylate

Used in production of polymers. Produced at Saratovorgsintez.

Methyl methacrylate

Used in production of plexiglass, synthetic resins, latex,

emulsions, ashfree oil additives, shock resistance modifiers,

paints and varnishes. Produced at Saratovorgsintez.

Phenol

Used in production of phenol formaldehyde resins, caprolactam,

diphenylolpropane, oils and oil additives, paints, pesticides,

pharmaceuticals and thermoplastics. Produced at

Saratovorgsintez.

Carbon fibre precursor

Used in production of carbon fibres and carbon plastic, which is

a light and tough material, used in the aerospace, ballistics and

nuclear industries. Produced at Saratovorgsintez.

Polyethylene

A polymer widely used in production of water and gas pipes,

tape for packaging of food products, insulating membranes,

thin�walled containers, fuel tanks, car parts, articles for the home

and technical fibres. Polyethylene is produced at Stavrolen,

Karpatneftekhim and the Burgas Refinery.

Polypropylene

One of the most universal polymers, used for production of

plumbing and drainage tubes with high�resistance qualities, in

the automotive industry, in domestic appliances, and for

production of packaging tapes and containers. Produced at the

Burgas Refinery.

Propylene

Raw material for production of polypropylene, propylene oxide,

isopropyl and butyl alcohols, acrylonitrile, etc. Marketable propy�

lene is produced at Stavrolen and Karpatneftekhim.

Pyrolene

Used as a softener in the tire and rubber industries, as an

adhesive agent in production of chipboard, as well as in the

cellulose and paper, and paint and varnish industries. Produced at

the Burgas Refinery.

Rubber

Used for production of tires and various rubber goods. Produced

at the Burgas Refinery.

Solvent naphta

Used as a solvent for paints, bitumen, rubber, varnishes, etc.

Produced at the Perm Refinery.

Styrene

Mainly used for production of polystyrene and various

copolymers, including styrene�butadiene rubber and polyester

resins. Produced at the Burgas Refinery.

Toluene

Used in production of various paints and varnishes (including for

the cosmetics industry), pharmaceuticals and explosives.

Produced at the Burgas and Perm Refineries.

Vinyl acetate

Raw material for production of water emulsion paints, paints for

the automotive industry, various adhesives, polyvinyl acetate,

polyvinyl spirit, polyvinyl acetal, copolymers with vinyl chloride,

ethylene, etc. Produced at Stavrolen.

Vinyl chloride

Raw material for production of polyvinyl chloride, which is

widely used in the construction industry, in production of cables,

synthetic leather, as well as in agriculture, the packaging

industry and consumer goods manufacture. Produced at

Karpatneftekhim.

Xylene

Used as a solvent for paints and varnishes and as an organic

synthesis input for many organic compounds. Produced at the

Burgas Refinery.

57

Production of High�pressure Polyethylene

Ethylene

High�pressurepolyethylene

Oil tar

Pyr

oly

sis

Polystyrene Production

Polystyrene

Production of Ethylene OxideEthylene oxide

Benzene

Production of GlycolEthylene glycol

Production of Ethanol AmineEthanol amine

AmmoniaWater

Aromatics ProductionС6�С8

Benzene, toluene

Xylene

Production of PolypropylenePolypropylene

Production of Acrylonitrile andSynthetic FiberAcetone

Propylene

Acrylonitrile

Synthetic fiber

Production of Industrial Rubberand Latex

Industrial rubber

Latex

Production of PyrolenePyroleneNonane

Butadiene�butylenefraction

Styrene

Ethylene

AO LUKOIL Neftokhim Burgas,

Bulgaria

The petrochemical complex was put into operation in 1968

Entered LUKOIL Group at the end of 1999

Hydrocarbon feedstocks (naphta, reformate, propane�butane fraction,propylene) from the Burgas refiningcomplex

The petrochemical complex includesproduction of ethylene, aromatichydrocarbons, ethylene oxide,ethylene glycols,ethanol amines andphenol

The complex also produces six typesof polymers: polyethylene,polypropylene, styrene and polystyrene, acrylonitrile andpolyacrylonitrile, rubber and latex,pyrolene

REFINERY WITH PETROCHEMICAL COMPLEX IN BURGAS

Production of Vinyl Chloride

Ethylene Ethylene

С6�С8 Benzene

Production of Polyethylene Polyethylene

Vinyl chloride

Salt (NaCl)Caustic soda

Propylene

Butene butylenefraction

Oil tar

Chlorine

Пир

олиз

Production of Caustic Soda

Production of Benzene

Pyr

oly

sis

Fraction С5�С9

Hydrogenation of С4�С5С4�С5 С4�С5

OOO Karpatneftekhim, Ukraine

Put into operation in the early1970s

A joint venture established in 2000

between LUKOIL and the company

Oriana

Pyrolysis capacity of ethyleneproduction – 250,000 tons per year

Main feedstocks – diesel fuel, supplied from Nizhny Novgorodrefinery, and sodium chloride

In 2001–2003 capacities for produc�tion of olefins and polyethylene were rebuilt and modernized. In 2005 a unitfor C4�C5 fractions with 90,000 tons

annual capacity was commissioned

Work continued in 2006 to prepare installation of chlorine and caustic soda production facilities with annual capacity of 200,000 tons and of a suspended polyvinyl chloride facility with 300,000 tons annual capacity

OOO KARPATNEFTEKHIM


FACT BOOK 2007

58

Ethylene

Benzene

Production ofCatalyst

Butadiene�butylene fraction

Polyethylene in powder

Polyethylene in grains

Vinyl acetate

Fuel oil

Propylene

Oil tar

Catalyst

Pyr

oly

sis

Production of Polyethylene

Production of Butylene�1

Production of Vinyl Acetate

C6�C8 Production of Benzene

Aceticacid

Fraction C6�C8

OOO Stavrolen

Put into operation in 1981

Entered LUKOIL Group in1998

Pyrolysis capacity of ethyleneproduction – 330,000 tons per year

The plant owns one of the largest pyrolysis units in Russia whichuses a wide range of feedstocks – naphta, propane�butane fraction,NGL

As a result of modernization, theshare of gas in total volume of feed�stock was raised to 20%. The change in feedstock structure and in contruc�tion of furnaces improved efficiency of production and increased basic olefins yield

In 2006 the plant continued construc�tion of a polypropylene unit of 120,000 tons annual capacity. Construction of the unit was complet�ed in the first quarter of 2007

OOO STAVROLEN

Alphamethylstyrene

Phenol

Propylene

Sulfuric acid

Benzene

Acetone

Acetone

Acrylonitrile

Acidwaste

Acidwaste

Methylacrylate

Ammonia Ammonia sulfate

Methanol

Methyl methacrylate

Acetonecyanohydrin

Acetone Acetone cyanohydrin

Hydrocyanicacid

Production of Methylacrylate

Production of Ammonia Sulfate

Production of Acrylonitrile

Production of Methyl Methacrylate

Production of Acetone Cyanohydrin

Production of Phenol and Acetone

Acrylonitrile

Synthetic fiberАcetonitrile

Carbon fiber precursor

OOO Saratovorgsintez

Put into operation in 1957

Entered LUKOIL Group in1999

The plant has three independentproduction facilities:

– acrylonitrile (capacity – 150,000 tons)

– synthetic nitrone fiber (capacity – 25,000 tons)

– organic synthesis (capacity – 110,000

tons)

From 2000 the Company has beenrebuilding main production units

In 2006 installation of a complex for production of sodium cyanide with 15,000 tons annual capacity to recy�cle wastes from production of acry�lonitrile (hydrocyanic acid) was carriedout. Start�up is planned for 2007

OOO SARATOVORGSINTEZ

59

TRANSPORT

Astrakhan(Ilyinka village)

2.0

0.7

Currentcapacity, mlntons per year

Transshipmentin 2006, mln

tons

1.5

0.5Varandey

12.0

9.2Vysotsk

6.0

5.3Kaliningrad

(Svetly)

Development of the transport segment helps the Company toimprove logistics management and control transport costs.LUKOIL delivers its oil and petroleum products via infrastructureof partner companies (Transneft, Gazprom, etc.) and its owninfrastructure. The Company is continuing to develop its ownexport terminals, which significantly reduce transport spendingand make transport arrangements more flexible.

Thanks to development of its own transport capacities and creation of a highly efficient and flexible logistics system, theCompany has succeeded in the last 3 years in keeping growthof transport costs per barrel of production on a level with growthof tariffs for transport through pipelines of Transneft (the Russianpipeline monopolist). This is a significant achievement, since tariff increases for transport by alternative routes have beenmuch greater than Transneft tariff increases, and transport volumes have grown more quickly than production due toincrease of international trade.

Svetly

A terminal at the port of Svetly in Kaliningrad Region (20 km from Kaliningrad) was commissioned in 2000. The terminal is designed for transshipment of crude oil produced byLUKOIL�Kaliningradmorneft and of petroleum products. Initialannual capacity of 1.5 mln tons was increased thanks to work in2003 and the terminal can now transship as much as 4 mln tonsper year.

In 2004 the channel from the port entrance at Baltiysk waswidened and deepened, making the terminal accessible fortankers with deadweight up to 20,000 tons (the previous limitwas 12,000 tons). The effect is to increase annual capacity to 6 mln tons of oil and petroleum products. A system introducedat the terminal in 2005 increased shipment of base lubricantsand diesel fuel.

The Svetly terminal transshipped 3.2 mln tons of crude oil

(including 1.5 mln tons of oil owned by third parties) and 2.1 mlntons of petroleum products in 2006.

Varandey

This terminal with annual capacity of 1.5 mln tons, located 4 km from the village of Varandey on the Barents Sea,began operations in 2000. The terminal is connected to oil reservoirs on the coast by an underwater pipeline and can serveice�breaking tankers with deadweight up to 20,000 tons.

Varandey is intended for all the year round export deliveries fromthe Timan�Pechora oil & gas province, particularly deliveries tothe US market. Construction of the terminal was justified by growth of production in the region and lack ofdeveloped transport infrastructure.

Work is now being carried out jointly with ConocoPhillips toexpand annual capacity of the terminal to 12 mln tons.Completion of the work is scheduled for 2008. The expansionwill allow the terminal to serve ice�breaking tankers with deadweight up to 70,000 tons. There are also plans to start shuttle deliveries of oil from the terminal to a new transshipment complex on the coast near Murmansk, where the oil will beloaded onto tankers with deadweight up to 150,000 tons andcarried to Rotterdam and the eastern seaboard of the USA.Construction of an underwater pipeline was begun and workcontinued on documentation for construction of the stationaryice�resistant jetty in 2006.

Transshipments through Varandey in 2006 were 0.5 mln tons ofoil.

Vysotsk

The Vysotsk terminal is located on the Baltic coast in the North�West of Russia. Construction began in June 2002 with theaim of increasing export capacities for crude oil and petroleum


FACT BOOK 2007

60

The Caspian Pipeline Consortium (CPC) is a 1,510 km pipeline connecting the Tengiz fieldwith the Yuzhnaya Ozereyevka terminal near Novorossiysk. The first framework agreement on construction of the CPC was signed in mid�1992 between Kazakhstan,Oman and Russia. The first stage of the pipeline with annual capacity of 28.2 mln tons wasput into operation at the end of 2001. It was decided in October 2004 to expand annualcapacity of the CPC to 67 mln tons by 2008. The first tanker was loaded with CPC oil inOctober 2001.

Pumping of oil from the Kumkol field through the CPC began in October 2003 (the oil iscarried by pipeline from the field to the town of Dzhusaly, and from there by rail to theCPC).

In May 2004 LUKOIL Group began to pump stable gas condensate from the Karachaganakfield through the CPC system.

In November 2004 the CPC began to transport LUKOIL Group oil from the Volga regionand Western Siberia.

Tengiz

Kumkol

Dzhusaly

Karachaganak

AtyrauAstrakhanskaya

Komsomolskaya

KropotkinNovorossiysk

Black Sea

Caspian

Sea

CPC

Other pipelines

Railroad

Shareholders of CaspianPipeline Consortium (12/31/2006)

Kazakhstan (19.0%)

Russia (24.0%)

Kazakhstan Pipeline BG (2.0%)

Rosneft � Shell (7.5%)Oryx CP (1.75%)

Mobil (7.5%)Agip International (2.0%)

Oman (7.0%)Chevron (15.0%)

LUKArco (12.5%)

Ventures (1.75%)

Transportation through CPC, mln tons

0 5 10 15 20 25 30 35

2002

2003

2004

2005

2006 31.10

30.50

22.51

14.78

11.13

product exports and reducing transport costs. The first stage ofthe terminal, with capacity for 4.7 mln tons of oil and petroleumproducts, was launched in June 2004. In 2005 the second stagewas built and launched, in 2006 – the third stage. Design annual capacity at Vysotsk is 15 mln tons (capacity at the end of2006 was 12 mln tons). The harbour can accommodate shipswith deadweight up to 80,000 tons, giving a substantial savingon transport costs. The terminal can handle crude oil, fuel oil, vacuum gas oil and diesel. Since 2005 only petroleum productshave been exported via the terminal.

Petroleum products are supplied to the terminal by railway. Technical characteristics of Vysotsk make it one of themost up�to�date terminals in the world. Vysotsk allows LUKOILto export oil and petroleum products to Western Europe, theUSA and South�East Asia.

In 2006 Vysotsk handled 3.2 mln tons of vacuum gas oil (including 0.3 mln tons owned by third parties), 4.8 mln tons of

diesel fuel (including 0.4 mln tons owned by third parties), and1.2 mln tons of fuel oil. Total shipments were 9.2 mln tons,which is one third more than in 2005.

Astrakhan

In October 2003 LUKOIL commissioned the first stage of acrude oil export terminal in the village of Ilyinka in AstrakhanRegion. Oil is carried to the terminal by railway, where it is transshipped to river�sea tankers.

Current annual crude capacity of the terminal is 2 mln tons andthe terminal can service tankers with deadweight up to 5,000tons. One use of the terminal is for supplies of oil to Iran on a substitution basis.

In 2006 the terminal handled 0.2 mln tons of oil and 0.5 mln tonsof petroleum products.

Caspian Pipeline Consortium (CPC)

61

CRUDE OIL AND PETROLEUM PRODUCT MARKETING

The marketing segment is crucially important to LUKOIL,

because it provides guaranteed outlets for Company

products. The key objective in this segment is to create

additional value by selling to the final consumer at the maximum

market price and ensuring reliable cash flows by reducing price

volatility. LUKOIL sells crude oil, petroleum products, gas

processing products and petrochemicals wholesale, and also

carries out retail sales of petroleum products and

petrochemicals. The Company's strategic aim is to increase the

share of retail sales, generating extra income and competitive

advantages.

LUKOIL sells most of its crude oil on the international market

and much smaller volumes on the domestic market. More than

75% of petroleum products are also sold abroad.

At the end of 2006 the Company's marketing network extends

to 19 countries, including Russia, near�abroad and European

countries (Azerbaijan, Belarus, Georgia, Moldova, Ukraine,

Bulgaria, Hungary, Finland, Estonia, Latvia, Lithuania, Poland,

Serbia, Romania, Macedonia, Cyprus, Turkey), as well as the

USA. The network includes 200 tank farms and 5,793 filling

stations (including franchises). LUKOIL Group filling stations

operate under three brands: LUKOIL, Teboil and Getty. The

Company is optimizing its marketing portfolio by acquisition of

highly efficient assets and disposal of less efficient ones. This

has enabled a 71% increase of average sales per Company

filling station over the last 5 years.

LUKOIL is rapidly expanding its filling station network by new

acquisitions and construction of new stations in promising

regions. The retail network has grown by 150% in the last 5

years (including franchises). Entry to new markets is made

easier by high quality of Company products, high quality service

at Company filling stations, and by application of promotion and

discount card schemes.

LICard is a system of non�cash payment for fuel and other products and services at LUKOILfilling stations. The system was originally designed to serve LUKOIL fuel cards, used by legalentities. It was later extended to personal bonus and discount cards, cards of internationalpayment systems and fuel cards issued by other companies.As of January 1, 2007, LICard was in operation at 2,179 filling stations in almost 60 regions ofRussia, as well as in Ukraine, Azerbaijan, Belarus and Poland, and the number of LICard fuelcards in circulation had risen to 1.17 mln. Over 1.55 mln tons of fuel were sold using the cardsin 2006 (almost 45% more than in 2005).

Russia 1,658 / 15%

Georgia

Azerbaijan USA 1,843 / 5%

Finland 437 / 25%

Romania 307 / 17%

Belarus 53 / 16%

Ukraine 241 / 7%

Lithuania 117 / 26%

Serbia 180 / 15%

Moldova 83 / 32%

Poland** 130 / 0%

Estonia 39 / 5%

Hungary 42 / 2%

Latvia

Cyprus 28 / 8%

Bulgaria***

43 / 16%

22 / 11%

Turkey****

* Share in the regions of LUKOIL activities.

**** Before 2006 LUKOIL had activities on the bunkerage market only (share – about 40%).

Number of filling stations /Share on the retail market

421 / 24%

*

*

5 / 0.3%

40 / 10%

524 / 39%

** LUKOIL sells liquified motor gases through 130 stations.

Macedonia 1 / 0%

*** Including Petrol�Bulgaria filling stations.

LUKOIL retail network


FACT BOOK 2007

62

International trade is another distinct business within LUKOIL.It enables the Company to sell its own products efficiently andto obtain extra profit from sales of third�party production.

LITASCO (LUKOIL International Trading and Supply Company)has been the sole agent for the Company's international tradingoperations since 2000, carrying out all LUKOIL Group deliveriesand trading operations outside Russia. Transfer of all export operations to a single Company simplified export arrangements,optimized export flows and assured transparency of LUKOIL'soil and petroleum product exports. LITASCO is consistently

increasing margins on trade operations by optimizing management of LUKOIL's delivery channels and by increasingthe volume of trade with third parties.

LITASCO has offices in 15 countries and its main trading officesare in Switzerland, the USA, Germany, the Netherlands,Sweden, UAE and Singapore. Expansion by LITASCO to newmarkets in Central America, China, and the Middle East hashelped to make LUKOIL into one of the leading oil companies inthe world.

Main routes of LUKOIL international oil and petroleum product trade

Central Federal District 7% / 6% / 191including Moscow andMoscow Region 7% / 5%

N.�West Federal District 19% / 22% / 308includingSaint Petersburg and Leningrad Region 16% / 17%

South Federal District 16% / 15% / 355 includingKrasnodar Region 13% / 15%

Urals Federal District 17% / 20% / 425includingSverdlov Region 24% / 23%

includingNizhny Novgorod Region 51% / 60%

Volga Federal District 24% / 21% / 379

Share on wholesale market / Share on retail market /Number of filling stations

19% / 22% / 308

LUKOIL Group’s position on the Russian petroleum product market

63

CORPORATE GOVERNANCE

Board of Directors

BoD Office

ChairmanValery Grayfer

HeadEvgeny Khavkin

Refining and Marketing

First Vice�PresidentVladimir Nekrasov

Main TechnicalDivision

Vice�PresidentJevan Cheloyants

Main Division ofOil and Gas Production

Vice�PresidentVladimir Mulyak

Main Division of Geology andDevelopment

HeadIlya Mandrik

Department of Economy of

Exploration andOil & Gas Production

HeadPavel Kaufman

Main Treasury andCorporate Finance

Division

Vice�PresidentAlexander Matytsyn

Main Division ofCorporate Budget and

Economic Planningand Investment

HeadGennady Fedotov

Accounts

Chief AccountantLubov Khoba

Main Division of Strategic Development

and Investment Analysis

Vice�PresidentLeonid Fedun

Main Division of Human Resources

HeadAnatoly Moskalenko

Main Division ofControl and Internal

Audit

Vice�PresidentVagit Sharifov

Main Division ofGeneral Issues,

Corporate Securityand Communications

Vice�PresidentAnatoly Barkov

Main Division of Legal Affairs

HeadIvan Masliaev

Oil and Gas Production

First Executive Vice�PresidentRavil Maganov

Economy and Finance

First Vice�PresidentSergey Kukura

ManagementCommittee

PresidentVagit Alekperov

Management Committee Office

HeadGennady Podliniayev

Main Division ofCoordination of

Petroleum ProductMarketing Abroad

Vice�PresidentNikolay Cherny

Main Division ofRefining

HeadThomas Mueller

Main Division of Supplies and Sales

HeadValery Subbotin

Main Division of Coordination of

Petroleum ProductMarketing in Russia

Vice�President

Vadim Vorobyev

Department ofEconomy of Refining

and Marketing

HeadAndrey Bychenko

COMPANY MANAGEMENT STRUCTURE

FACT BOOK 2007

64

Board of Directors

To prepare recommendations to the BoD

concerning:

analysis of concepts, programs and plans

for strategic development of the Company;

assessment of Company policy in relations

with investors and shareholders;

decisions on the level of dividends to be

recommended to shareholders, and

procedure for dividend payment;

distribution of Company profit and loss at

the end of each year;

Company policy with respect to

its own securities;

plans for Company reorganization;

participation in holding companies,

financial�industrial groups, associations and

any other unified commercial organizations;

major transactions, involving property that

is equal in value to 25�50% of the balance�

sheet value of Company assets on the day,

when the decision on such transaction

is taken;

creation of Company subsidiaries and

opening of representative offices, and

closure of the same in the Russian

Federation and foreign countries;

use of Company reserves;

use of non�core assets of the Company;

change in the structure of Company asset

management.

Responsibilities:


concerning:

Company actions to do with personnel

and remuneration of managers and of the

Company’s auditing commission;

assessment of candidates to positions in

the respective management positions in the

Company;

design of criteria for determining

independence of any director in the BoD;

analysis of results of work by members

of Company management bodies and of

the audit commission , particularly as

concerns possible increase of remuneration

paid to them and any other types of

incentive;

decision on a recommended level of

remuneration to be paid to members of the

auditing commission;

advisability of reappointing members of

the auditing commission;

design of long�term programs of

remuneration to Company employees,

based on Company shares;

significant conditions of contracts with

members of the Company’s executive

bodies.

Responsibilities:


concerning:

selection of candidates for appointment

as Company Auditor from among

internationally recognized auditors with

high professional reputation;

supervision of any competition (tender)

for choice of the Auditor, if such a

competition is held;

analysis and discussion with the Auditor

of any significant questions arising during

conduct of independent external audit of

the Company;

acquaintance with the Auditor’s

conclusions before the latter are presented

to shareholders at the General Meeting

of Shareholders;

review of the most significant amend�

ments to the Company’s accounts as a

result of the audit;

efficiency of the Company’s system of

internal control and audit;

assessment of the Company’s risk

management system;

possible preliminary approval of the

Company’s annual report by the BoD;

observance of audit procedures and

assessment of the level of objectivity and

independence of the Company Auditor;

definition of a limit for the Auditor’s

remuneration, depending on the type and

volume of his work, including services,

which complement the actual audit.

Responsibilities:

Audit Committee

Oleg Kutafin

Mikhail Berezhnoi

Sergei Mikhailov

Purpose:

to prepare recommendations to the BoD on Company policy regarding personnel and regarding remuneration

of managers and of the Company’s auditing commission

Purpose:to make recommendations to the BoD on design of strategic

development goals for the Company and to coordinate strategic planning activities

with the BoD

Purpose:to make recommendations

to the BoD concerning independent external and internal audit of

financial accounts and appraisal of Company property

Strategy and Investment Committee

Richard MatzkeRavil Maganov

Donald Evert WalletteIgor Sherkunov

Personnel and Remuneration Committee

Alexander ShokhinSergei MikhailovNikolai Tsvetkov

COMMITTEES OF THE BOARD OF DIRECTORS

65

FINANCES

LUKOIL FINANCIAL POLICY AND SECURITIES

Bonds

Date Maturity, Face value, Quantity, Annual Type of Currentyears roubles th. units coupon placement status

13.07.95 Registered non� 1 5,000 460 – Open Cancelled at conversiondocumentary bonds con� subscription in 1996 (1 bond =

vertible to common shares = 170 shares)

17.05.99 Documentary 4 1,000 3,000 6%* Open Cancelled at bearer bonds subscription redemption in 2003

16.04.04 Documentary 5 1,000 6,000 7.25% Open Placedbearer bonds subscription



Eurobonds

Date Maturity Face value, Quantity, Annual Current years $ th. units coupon status

06.05.97 Convertible 5 1,000 230 3.5% Cancelled at conversioneurobonds in 2002 (1 eurobond =

= 15 GDR (60 shares))

03.11.97 Convertible 6 1,000 350 1% Cancelled at conversion eurobonds in 2003 (1 eurobond =

= 5.625 GDR (22.5 shares))

29.11.02 Convertible 5 1,000 350 3.5% Placed, some of the bonds haveeurobonds been converted to GDRs (ratio de�

pends on size of dividend payments)

31.05.07 Eurobonds 10 100,000 5 6.356% Placed

31.05.07 Eurobonds 15 100,000 5 6.356% Placed

* Rate was subject to change depending on the dollar exchange rate.

Financial policy

The main strategic mission of LUKOIL Group is to increase

shareholder value. The Company therefore pursues a finance

and credit policy aimed at minimizing the cost of capital

deployed at reasonable risk levels. LUKOIL's finance and credit

policy is tough and well�balanced, with strict controls over the

volume and structure of Company debt. The policy includes a

linkage between the scale of Company debt and the scale of its

business.

In its financial policy LUKOIL strives to maintain the following

ratios:

Debt to capital – less than 30%

Secured debt to total debt – less than 20%

Debt under guarantee of the holding company to total debt

– more than 80%

Short�term debt to total debt – from 20 to 35%

Debt at fixed interest to total debt – from 25 to 35%

Total borrowings to EBITDA – less than 300%

Net debt to equity – less than 55%

Interest expense to EBITDA – less than 25%

History of corporate borrowings

LUKOIL makes borrowings on Russian and international capital

markets in order to achieve objectives of its financial and credit

policy and, most importantly, to reduce the cost of capital in use.

The market views the Company as a highly dependable

borrower and offers LUKOIL better debt financing terms than

are available to other privately owned Russian companies.

1997 1998 200420032002200120001999 2005 2006

СС/Ca2

ССС/Caa2

BB/Ba2

BBB/Baa2

Standard & Poor’s Moody’s

B/B2

Fitch

Dynamics of LUKOIL credit rating

Investment grade (ВВВ� / Ваа3)

2007

FACT BOOK 2007

66

2002 2003 2004 2005 20060

10

20

30

40

50

60

70

80

90

100

LUKOIL shares

Shares of LUKOIL are among the most liquid and attractiveinstruments on the Russian stock market today and are alsotraded intensively on foreign markets (the London StockExchange, several German exchanges and the US over�the�counter market). Company market capitalization hasgrown by 7 times in the last 5 years, which is one of the bestresults among international oil & gas companies. LUKOIL is thusachieving one of its main strategic goals – to increase shareholder value and ensure full access to markets for investment capital.

In 2006 trading in Company shares represented 14% of tradingon the RTS, 11% of trading on the MICEX and nearly 25% oftrading in shares of foreign issuers on the IOB section of theLSE. LUKOIL shares are included in a number of Russian andforeign stock indexes. The Company’s weight in the RTS Indexis 15.0% and weight of its shares in the MSCI Russia is nearly14% (as of the end of 2006).

Authorized and issued share capital currently consists of 850.6 mln shares. Depositary Receipts have been issued on63.8% of these shares. Over 55,000 individuals and legal entities worldwide are Company shareholders.

LUKOIL's dividend policy is characterized by strict observance ofshareholder rights and maintenance of a balance of interestsbetween shareholders and the Company. In accordance with thepolicy, LUKOIL pays out no less than 15% of consolidated netincome under US GAAP as dividends each year, ensuring a highrate of return. The Company has increased its dividends pershare year by year: the payment for 2006 was 38 roubles($1.47), which is nearly two times more than in 2002. Higher dividends and growth of market value of shares has increasedtotal shareholder return (TSR), which was at a level of 50.1% in2006.

In 2006 LUKOIL decided to buy back its own shares to the valueof $3 bln. This will bring additional income to LUKOIL shareholders by increasing the value of shares in circulation.

History of Company share capital

1993

The overall privatization plan is approved and a first issue of

LUKOIL shares is registered, consisting of 8,184,213 common

shares with par value of 1,000 roubles each.

The Russian Government takes 90.77% of share capital and

remaining shares are distributed to employees or kept back for

share swaps with subsidiaries.

1994

The first privatization sales of LUKOIL shares are held and

organized trading of Company shares on the secondary market

begins. As a result, the share of the Russian Government in

share capital declines to 72%. A further 3,320,463 common

shares and 379,527 preferred shares are issued, increasing

share capital to 11,884,203 shares.

1995

The Company carries out 2 share splits, dividing one share with

1,000 roubles par value into 40 shares with par value of

25 roubles each. The first annual general meeting of

shareholders decides on further issue of 189,364,351 common

and 49,830,784 preferred shares, which are placed by closed

subscription among shareholders of subsidiaries in exchange for

shares of those subsidiaries in order to consolidate Company

assets. As a result, Company share capital consists of

714,563,255 shares with par value of 25 roubles. The

government stake in share capital decreases to 55% due to a

number of auctions and cash sales, and due to the policy of

consolidating subsidiaries. Atlantic Richfield Company (ARCO)

becomes a major shareholder and a strategic partner of LUKOIL

upon acquisition of a 6.3% stake in LUKOIL capital for $250 mln

through a purchase of convertible bonds and their further

conversion into common shares.

LUKOIL share price, $

67

1996

LUKOIL becomes one of the first Russian companies to place

American Depositary Receipts (ADRs) on the international

market. LUKOIL ADRs start trading on German stock exchanges

and the US over�the�counter market. About 20% of Company

share capital is converted into ADRs.

As part of the privatization program, bonds issued in 1995 are

converted into LUKOIL shares owned by the Federal

Government, representing 11% of share capital. This operation

and further investment auctions and cash sales reduce the

Government stake in LUKOIL share capital to 33%.

1997

Full consolidation of shares of main LUKOIL subsidiaries is

completed through their exchange for shares of the Company.

For this purpose a new issue of 19,800,000 common and

12,200,000 preferred shares is carried out. The shares are

placed by subscription among shareholders of subsidiaries in

exchange for shares of the subsidiaries. As a result, Company

share capital increases by 4.5% to 746,563,255 shares. The

Government stake in share capital declines to 27%.

1999

The Company issues 69,000,000 new common shares to be

swapped for 11,500,000 preferred shares (at a rate of

1 preferred for 6 common). The swap increases share capital to

815,563,255 shares. The Government stake in share capital

declines to 24%.

2000

In accordance with a Russian Government decision, a 9% stake

in LUKOIL, owned by the Government, is sold via a commercial

competition with investment conditions to the Cyprus company,

Reforma Investment Ltd, for $200.005 mln. A cash auction is

also held, at which the Government sells 1% of the Company.

As a result, the Government stake in LUKOIL declines to 14%

by the end of the year.

2001

LUKOIL issues 35,000,000 new shares for conversion of

Company eurobonds and for purchase of other assets. The new

issue increases share capital by 4.3% to 850,563,255 shares.

All of the Company's preferred shares are converted into

common shares at a rate of 1 to 1 (in many cases at other

companies, preferred shares were converted at rates of 1 to

several, leading to dilution of share capital).

2002

LUKOIL becomes the first Russian Company to obtain a full

secondary listing on the London Stock Exchange. Company

common shares begin to trade on the LSE in ADR form.

A 5.9% Russian Government stake in LUKOIL is placed on the

London Stock Exchange for $775 mln. The Russian Government

stake in the Company declines to 7.59% after the sale.

2003

Official LSE data in March 2003 show that LUKOIL shares are

the most liquid instruments in their group: LUKOIL shares

represent 36.6% of LSE trading in shares of companies from

Central and Eastern Europe.

2004

The Property Ministry of the Russian Federation completes

privatization of LUKOIL by offering the remaining 7.59%

Government stake for sale at auction. An affiliate of the

US company ConocoPhillips wins the auction, buying the stake

for $1.988 bln ($30.76 per share). LUKOIL thus becomes fully

privately owned.

2005

LUKOIL changes the ratio between Depositary Receipts and

common shares in its two most liquid Depositary Receipt

programs: from 1 Depositary Receipt representing 4 common

shares to 1 Depositary Receipt representing 1 common share.

The main purpose of the change is to increase liquidity and thus

make Depositary Receipts more attractive for all types of

investors.

2006

ConocoPhillips increases its stake in LUKOIL share capital to

20%, as stipulated in the Shareholder Agreement. LUKOIL

decides to buy back its own shares to maximum value of $3 bln

in 2006–2008 (including $782 mln in 2006).

FINANCES

LUKOIL's business is subject to taxation inside and outsideRussia. The scale of the Company's business inside Russiameans that its situation as a taxpayer is mainly defined by taxes,payable in that country. In 2002–2006 taxes paid in Russia represented more than 80% of all tax payments by LUKOIL. Themain taxes paid by the Group are listed below.

Corporate income tax

Date introduced: 1992

Object: income received by an organization, reduced by incurredcosts, defined in accordance with Russian tax law

Tax payers: Russian and foreign organizations, which carry outbusiness or have a source of income in the Russian Federation

Tax rate: 20–24%

Impact on Company business: payment of income tax by theCompany increased by 12.4% in 2006 compared with 2005 andtotalled $2,773 mln. The effective income tax rate in 2006 was26.8%, which is higher than the maximum statutory rate of24%. This is attributable to the fact that some costs incurred inthe current period were not tax deductible or only deductible toa certain limit

Corporate property tax


Object: real estate and other property of organizations, which isclassed on the balance sheet as fixed assets

Tax payers: Russian and foreign organizations, carrying out business and/or having property in Russia

Tax rate: set by regional parliaments; the maximum rate is 2.2%

Impact on Company business: Company spending on propertytax in 2006 was $247 mln, which is $14 mln more than in 2005

Unified social tax


Object: wages and other disbursements paid to individualsunder employment and other civil law contracts (except thosepaid to individual enterpreneurs)

Tax payers: entities, which make the above payments and disbursements to individuals (employees)

Tax rate: regressive scale (maximum rate – 26%, on taxable

annual wages and disbursements per employee up to a level of280,000 roubles, calculated cumulatively from the start of theyear)

The unified social tax is paid to the federal budget, to the socialinsurance fund and to medical insurance fund

Impact on Company business: Company spending in 2006 onsocial taxes and charges was $356 mln, which is 9.9% morethan in 2005

Mineral extraction tax (oil)


The mineral extraction tax replaced three forms of payment foruse of mineral resources, which existed previously – sub�soilresource tax, payments to finance replacement of mineralresources, and excise payments on oil and gas condensate.

Object: mineral resources, extracted on territory under Russianjurisdiction

Tax payers: organizations and individual enterpreneurs, whoqualify as extractors of minerals under Russian law

Base tax rate (2005–2007): 419 roubles per ton (applicable taxrate is calculated each month using a coefficient which reflectschanges in world prices for oil)

Average rate in 2006: 2,265.7 roubles per ton

Impact on Company business: the mineral extraction tax,together with export duties, is the most significant part of thetax burden on oil companies. In 2006 LUKOIL paid $7.28 bln asmineral extraction tax (30% of total tax payment by theCompany)

Mineral extraction tax (gas)


Object: gas produced on territory under Russian jurisdiction

Tax payers: organizations and individual enterpreneurs, whoqualify as extractors of minerals under Russian law

Tax rate (2006): 147 roubles per th. cm for natural gas and 0 roubles per th. cm for associated petroleum gas

VAT


Object: sale and transfer of goods, services and property rights

From January 1, 2007 a new law introduced differentiations in the mineral extraction tax, setting a zero rate for extrac�

tion in territories located wholly or partially in the Eastern Siberian oil & gas province (Republic of Sakha (Yakutia), Irkutsk Region,

Krasnoyarsk Territory). The zero rate applies until the cumulative volume of oil production reaches 25 mln tons, or the development

period exceeds 10 or 15 years depending on the license type. The same tax benefit is available for high�viscosity oil. Also,

progressively lower tax rates is set for fields with exhaustion levels higher than 80% (will be applied after development of appli�

cation practice). The specific tax rate for oil production is the same as in 2006, 419 roubles per ton. This rate is amended using a

coefficient that reflects movement of international oil prices and exhaustion levels at specific production locations.

68

FACT BOOK 2007

TAX ENVIRONMENT

69

TAX ENVIRONMENT

inside Russia as well as construction and assembly work for theCompany's own consumption and import of goods across theRussian customs border

Tax payers: organizations, individual enterpreneurs

Tax rate: 18%; a lower rate of 10% is applicable for taxation ofbasic food goods, medical goods and goods for children; 0% rate is applicable to export operations

Excise (petroleum products)


Products liable to the tax: automobile gasoline; diesel fuel;motor oils for diesel and (or) carburettor (injection) engines;straight�run gasoline

Payers: organizations and individual enterpreneurs (sinceJanuary 1, 2007 – refineries, but not organizations selling petro�leum products as in 2003–2006)

Rate: excise rates for petroleum products are reviewed annually by the Russian Government. However, the Governmenthas kept rates unchanged in 2007 in order to limit domesticprice rises for gasoline

Petroleum products excise (2005–2007), roubles per ton

High�octane gasoline 3,629

Low�octane gasoline 2,657

Naphta 2,657

Motor oils 2,951

Diesel fuel 1,080

Impact on Company business: excises paid by LUKOIL on saleof petroleum products in Russia totalled $0.61 bln in 2006.Besides, $2.83 bln were paid abroad

Excise (gas)


Excises on natural gas were abolished from 2004

Export duties (oil)


Object: export of oil and gas condensate beyond the borders of

Russia

Payers: organizations exporting oil from Russia

Rate: changes every 2 months depending on oil prices

Average rate in 2006: $197.0 per ton

Impact on Company business: total duties paid on exports of oiland petroleum products in 2006 were $10.12 bln (41% of totaltax paid by the Company), which is an increase of 53.5% compared to 2005

Export duties (petroleum products)


Object: export of petroleum products from Russia

Payers: organizations exporting petroleum products from Russia

Rate: different rates apply for different petroleum productstypes (light and dark), and rates are subject to change by theRussian Government depending on changes in prices for oilAverage rate in 2006: $143.4 per ton for light products and $77.3per ton for dark products

Export duties (gas)


Object: export of gas from Russia

Payers: organizations exporting gas from Russia

Rate: natural gas in a gaseous state is liable to export duty at30% of its value for customs purposes; a zero rate for customsduties on export of liquefied natural gas was introduced in 2006(previously 40 euros per ton)

Tax on income received as dividends


Object: income received as dividends

Tax payers: Russian and foreign organizations and individuals

Tax rate: 9% of dividends paid by Russian organizations toRussian organizations and individuals; 15% of income receivedin the form of dividends by foreign organizations from Russianorganizations, and by Russian organizations from foreign organizations; 30% of income received in the form of dividendsby foreign individuals from Russian organizations

Impact on Company business: Russian tax legislation allows offsetting of tax paid by LUKOIL on dividends from its subsidiaries and dependent companies when the Company paysdividends to its shareholders. This way of avoiding dual taxationmeans that Russian shareholders of LUKOIL will not have to payor will pay less tax on dividends under certain conditions

FACT BOOK 2007

70

Mineral extraction tax (MET), $ per ton

2004 2005–2007

Oil price $ per barrel Urals oil price

Base oil price $ per barrel 8 9

Base tax rate roubles per ton 347 419

Base rouble/$ exchange rate rouble/$ 31.5 29.0

* From January 1, 2007.

The rate of the mineral extraction tax changes each month. For example, the tax rate for

June is calculated in July based on the average international market price for Urals crude

in June.

Crude oil export tariff, $ per barrel

Tariff rate, $ per barrel

Oil price (P), $ per barrel before June 2004 after June 2004

P < 15 0 0

15 < P < 20 (P – 15) x 35% (P – 15) x 35%

20 < P < 25 (P – 15) x 35% 1.75 + (P – 20) x 45%

P > 25 3.5 + (P – 25) x 40% 4.0 + (P – 25) x 65%

The export tariff rate on crude oil is revised every two months. For example, the export

tariff rate for April–May is calculated in March based on the average price of Urals oil on

the international market in January–February.

100

60

80

40

20

0 10 20 30 40 70

0

Urals oil price, USD per barrel6050

% 100%

91%

70%

54%

39%45%

35%

9%14% 16% 17% 18% 19%

46%43%

38%

30%

16%

Export tariff

Mineral extraction tax

Exporter’s revenue

Dependence of crude oil export tariff rate and mineral extraction tax rateon oil prices (model applied in 2005–2007), $ per barrel

0

50

100

150

200

2006

Average crude oil export tariff,$ per ton

2002 2003 2004 2005

30

40

50

60

2006

Share of taxes, excises and exporttariffs in sales after cost of purchasedcrude oil and petroleum products,%

2002 2003 2004 2005

2006

Share of taxes, excises and exporttariffs in income before theirpayment, %

70.0

72.5

75.0

77.5

2002 2003 2004 2005

MET =Base exchange rate (RUR/USD) х Base oil price

Base tax rate х (Oil price – Base oil price) х Reserve exhaustion rate*

71

FORWARD�LOOKING STATEMENTS

Certain statements in this document are not historical facts and are "forward�looking". We may from time to time make

written or oral forward�looking statements in reports to shareholders and in other communications. Examples of such

forward�looking statements include, but are not limited to:

– statements of our plans, objectives or goals, including those related to products or services;

– statements of future economic performance; and

– statements of assumptions underlying such statements.

Forward�looking statements that may be made by us from time to time (but that are not included in this document) may also include

projections or expectations of revenues, income (or loss), earnings (or loss) per share, dividends, capital structure or other financial

items or ratios. Words such as "believes," "anticipates," "expects," "estimates," "intends" and "plans" and similar expressions are

intended to identify forward�looking statements but are not the exclusive means of identifying such statements. By their very nature,

forward�looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions,

forecasts, projections and other forward�looking statements will not be achieved. You should be aware that a number of important

factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in

such forward�looking statements.

These factors include:

– inflation, interest rate and exchange rate fluctuations;

– the price of oil;

– the effects of, and changes in, Russian government policy;

– the effects of competition in the geographic and business areas in which we conduct operations;

– the effects of changes in laws, regulations, taxation or accounting standards or practices;

– our ability to increase market share for our products and control expenses;

– acquisitions or divestitures;

– technological changes; and

– our success at managing the risks of the aforementioned factors.

This list of important factors is not exhaustive. When relying on forward�looking statements, you should carefully consider the

foregoing factors and other uncertainties and events, especially in light of the political, economic, social and legal environment in

which we operate. Such forward�looking statements speak only as of the date on which they are made and, subject to any continuing

obligations under the Listing Rules of the U.K. Listing Authority, we do not undertake any obligation to update or revise any of them,

whether as a result of new information, future events or otherwise. We do not make any representation, warranty or prediction that

the results anticipated by such forward�looking statements will be achieved, and such forward�looking statements represent, in each

case, only one of many possible scenarios and should not be viewed as the most likely or standard scenario.

FORWARD�LOOKING STATEMENTS

FACT BOOK 2007

REFERENCE INFORMATION

All information in this document is presented as of 31.12.2006. This document does not reflect any changes

that happened after that date, unless specified.

Concepts and Terms Used in the Document

The references to LUKOIL, LUKOIL Group, 'Group', 'the Company', 'we' and 'our' in this document all refer toLUKOIL and/or its subsidiary enterprises, LangepasUrayKogalymneft (predecessor of LUKOIL in 1991–1993) depending upon the context, in which the terms are used.

Sources of information

Abbreviations

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

Legal Address

and Central Office

11, Sretensky Boulevard, Moscow, Russia 101 000

Central Information Service

Tel: +7 (495) 627�44�44, 628�98�41 Fax: +7 (495) 625�70�16

Shareholder Relations

Department

Tel: +7 (495) 627�48�84, 973�73�46Fax: +7 (495) 627�41�91Email: [email protected]

Investor Relations Department

Tel: + 7 (495) 627�16�96Fax: + 7 (495) 981�72�88Email: [email protected]

Press Service

Tel: +7 (495) 627�16�77Fax: 7 (495) 627�16�53Email: [email protected]

LUKOIL Stock & Consulting Center

3 (Building 1), Pokrovsky Boulevard,Moscow, Russia 101 000Tel: + 7 (495) 627�41�91, 627�43�80 Fax:+ 7 (495) 627�41�91

NIKOIL Registrar Company

28, 3rd Ulitsa Yamskogo Polya,Moscow, Russia 125 124Tel/fax: + 7 (495) 755�90�77

LUKOIL Publications

Electronic 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.

Information provided by the Ministry of Industry andEnergy of Russia

Information provided by the State Committee forStatistics of the Russian Federation

Annual reports of major international privately ownedoil companies

Information provided by the US Department of Energyand the International Energy Agency

Statistical Review of World Energy 2006 (BritishPetroleum)

Annual Statistical Bulletin (OPEC)

Worldwide Refinery Capacities as of January 1,2007 (Oil & Gas Journal)

Platt’s

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

bсf — billion cubic feetmcf — million cubic feetth. cf — thousand cubic feetbcm — billion cubic metersmcm — million cubic meters

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