Fat Book 2012

Oil REFiNiNg, GAs pRocEssiNg, PETRocHEmicAls AND MARkETiNg

STRATEGY:
Considerable increase in light products yield at Group refineries in Russia Increase in gasolne production at Group refineries in Russia by 50% Growth of daily sales per Groups filling station in Russia by 27% Putting of new capacities into operation at Group refineries in Russia Bringing of foreign refineries of the Group into compliance with best world practice

MAiN iNDiCAToRS FoR 2011:

Refineries Refinery throughputs, mln tons Capacity utilization, % Gas-processing plants Gas processing, mcm Petrochemical plants Petrochemical production, mln tons Filling stations Oil exports, mln tons Petroleum product exports, mln tons Oil sales, mln tons Wholesale petroleum product sales, mln tons Retail petroleum product sales, mln tons R&M net profit, $ mln R&M capex, $ mln Employees in the segment, people
1 2

9 64.93 1 88.3 4 3,199 42 1,466 5,994 34.7 24.03 48.3 87.34 15.25 3,687 1,354 63.9

Including ISAB Complex and Zeeland Refinery. Including Burgas Refinery.

Refining & marketing is LUKOILs second major business segment. By developing this segment the Company lowers its exposure to high price volatility on the crude oil market and enhances its competitive position in main business regions by production and sale of highquality petroleum products with high value-added. Thus 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 the Companys strategy for a long-term balance between the exploration & production and refining & marketing segments. (At present LUKOIL refineries can process more than 75% of the Companys crude production). LUKOIL currently produces a wide range of high-quality petroleum and gas products and petrochemicals, selling them via wholesale and retail in over 30 countries.

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MAiN R&M REGioNS oF LUKOIL GRouP

Oil Rening

Gas Processing Petrochemicals Power Generation Marketing

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Fat Book 2012

Oil Refining
LUKOIL iS WoRkiNG HARD To DEVEloP iTS EXiSTiNG REFiNERiES AND iS CoNSiDERiNG VARiouS AlTERNATiVES FoR ACQuiSiTioN oR CoNSTRuCTioN oF NEW REFiNiNG CAPACiTiES iN oRDER To ACHiEVE A BAlANCE BETWEEN PRoDuCTioN AND REFiNiNG.
LUKOILs strategic goal is to maximize value-added of its output and profitability of its operations, as well as increasing the contribution of refining business to Company value creation. At the time of its establishment in 1993 LUKOIL had only two refineries, at Perm and Volgograd, with combined annual capacity of about 23 mln tons. Today the Group includes 4 major refineries and 2 mini-refineries in Russia, as well as 3 refineries abroad (in Ukraine, Bulgaria and Romania), and shares in a refinery complex in Italy and refinery in the Netherlands. Total annual capacity of Company refineries is 73.5 mln tons (including share in the Zeeland Refinery acquired in 2009).

LUKOIL GRouP REFiNERiES

Capacity and refining volumes at Zeeland (for oil) are shown by the Companys share (45%). Besides 2.17 million tons of vacuum gasoil was processed at Zeeland in 2011. Including 0.74 mln tons of fuel oil refined in 2011. 3 Capacity and refining volumes at ISAB (for oil and other raw materials) are shown by the Companys share (60%).
1 2

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In 2005 LUKOIL became the first Russian oil company to begin large-scale production of Euro-4 diesel fuel with enhanced environmental characteristics at refineries in Russia. The fuel meets EN- 590:2004 environmental standards for diesel fuel, which have been in force in the European Union since 2005. Apart from extending engine life and saving fuel, use of LUKOIL Euro-4 more than halves carcinogenic emissions from engines. Total sales of EKTO diesel fuel in 2011 were 1.08 mln tons, which is 24% more than in 2010. In 2006 LUKOIL began production of gasoline that meets the EUs Euro-3 standard. LUKOIL 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 began at the Companys 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 Companys marketing sector.

European standarts
Gasoline 2011 2010 2009 2008 2007 2006 2005 Euro 5 Euro 4 Euro 4 Euro 3 Euro 3 Euro 3 Diesel fuel Euro 5 Euro 5 Euro 5 Euro 5 Euro 5 Euro 5 Euro 4

The refineries have modern conversion and reforming facilities and produce a wide range of quality petroleum products. The quality of facilities and efficiency of the Companys refineries in Russia is higher than the national average, and LUKOILs European refineries are a match for competitors. Oil refining volumes at LUKOIL Group refineries have grown by 19.7% in 20072011, to 64.93 mln tons in 2011 (including Companys share in refining throughputs at the ISAB Complex and Zeeland Refinery). LUKOIL is constantly modernizing its refining capacities, reacting quickly to main market trends. The Company uses the latest technologies in modernization of its refineries in order to improve quality of production and reduce environmental impact. The Company is rapidly introducing European quality standards for motor oils at all its refineries. This will offer significant competitive advantages in the future and already ensures a price premium, reflecting the environmental and functional qualities of Company products. Since 2009 all LUKOIL refineries fully produce fuels to Euro-5 standards (which are introduced in the EU from 2009) and its Russian refineries produce gasoline to Euro-4 standards (from 2011 also to Euro-5). LUKOIL produces a first batch of automotive gasoline to Euro-5 standards. This was made possible by commissioning of a hydrofluoric alkylation unit as part of catalytic cracking complex at the Nizhny Novgorod Refinery. Euro-5 gasoline ensures so-called clean exhaust, reducing emission of sulphur oxides and the products of incomplete combustion of aromatics (including the particularly dangerous carcinogen and mutagenic, benzopyrene). There was a steady growth during 2011 in sales of LUKOILs EKTO branded motor fuels. There were 1.6 mln tons of EKTO gasoline sold in 2011, which exceeds the 2010 figure by 23%.

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Fat Book 2012

LUKOIL motor oils meet international standards, set by the Society of Automotive Engineers (SAE), the American Petroleum Institute (API), the Association des Constructeurs Europeens dAutomobiles (ACEA) and the Russian Association of Automobile Engineers (AAE). Company oils are produced using the latest technologies and contain efficient additives supplied by Russian and foreign producers. High performance qualities of LUKOIL lubricants have been acknowledged by major automotive manufacturers in Russia and abroad. Company motor oils have passed tests at western certification centers on engines made by DaimlerChrysler, BMW, Volkswagen, MAN, Porsche, Volvo, Renault trucks, Cummins and have been approved for use in these engines. A total of 38 new lubricant products were brought into production in 2011 and 48 manufacturer approvals were obtained.

The Company is also increasing production of high-octane gasolines to European environmental standards in response to growing demand and gradual changeover to new ecological standards for motor fuels. Production and sale of lubricants is a distinct business within LUKOIL. The Company increased the number of lubricant brands from 230 to 261 in 2011, including lube basestock (used as raw materials for production of motor oils, lubricants and additives); industrial oils for equipment uses; motor oils (for gasoline and diesel engines) and transmission oils. LUKOIL tests new generation oils for marine engines to obtain approval of leading producers of marine engines MAN, WARTSILA, Sulzer, B&W. In Russia LUKOIL produces lubricants at the Perm, Volgograd and Nizhny Novgorod Refineries and also mixes lubricants

in Tyumen region. Group refineries produced 1.15 mln tons of oils and lubricants in 2011. The Company share in total Russian production of lubricants was about 44%. Mixing and packaging of lubricants is also carried out at foreign refineries of LUKOIL Group in Romania, Turkey and Finland. Total mixing and packaging amounted to 87,000 tons in 2011. The Company carries out sales of oils and lubricants in more than 40 countries worldwide, with sales geography constantly expanding. In 2011 the Company began lubricant sales in Afghanistan, Mongolia and China. In a major breakthrough for LUKOILs lubricant business the Company obtained its first-ever contracts in 2011 for lubricant supplies to newly-built ships. The Companys ship lubricants were available in 550 ports in more than 62 countries worldwide by the end of 2011.

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VOLGOGRAD REFINERY LUKOIL-Volgogradneftepererabotka The Refinery produces fuels and lubricants Located in southern Russia Refines a blend of light West-Siberian Crude oil is supplied to the Refinery via Petroleum products are shipped by rail, Capacity 11.0 mln tons per year Nelson index 5.4 Main conversion process is coking
(18,500 barrels per day) road and river transport the Samara Tikhoretsk pipeline and Lower-Volga crudes

Refinery throughput, mln tons

Quality of products From the middle of 2008 the Refinery

produces diesel fuel with sulfur content below 50 ppm gasolines that meets Euro-3 standards.

History of Refinery
The Refinery was put into operation in 1957. In 1991 the Refinery entered LUKOIL Group. In 1994 equipment for initial refining and gasoline reforming was rebuilt. In 19971998 the Refinery launched automatic equipment for blending of gasolines and a rail trestle for crude oil discharge. In 19982001 the Refinery launched equipment for hydrotreatment of diesel fuel, naphta stabilization and fractioning of saturated hydrocarbon gases. In 20022003 the Refinery was equipped with a lubricant-packaging line and a storage facility for marketable lubricants. In 20042006 the first stage of a coke calcination facility was completed. The Refinery completed construction of a catalytic reforming unit. In 2007 an isomerization unit with annual capacity of 380,000 tons was commissioned. In 2008 the vacuum block on distillation unit No6 was commissioned after an upgrade. A gasoline blending facility was brought into operation. The Refinery switched to production of motor gasolines to Euro-3 standard. In 2009 a unit for production of inert gas was brought into operation and a steam recuperation unit was commissioned at the oil loading rack. EKTO diesel fuel production was started. In 2010 a short-cycle absorption unit to produce concentrated hydrogen was brought into operation. The heat exchanger on the diesel hydrotreatment units was modernized, increasing unit capacity by 8%. In 2011 a new delayed coking unit with one million tonnes capacity was commissioned.

From 2008 the Refinery produces motor The Refinery produces about 500,000 tons
of mineral, semi-synthetic and synthetic lubricants to Russian and international (API) standards per year

Current modernization Construction of a unit for hydrotreatment

of diesel fuel with 3 mln tons capacity by 2012 unit with 6 mln tons capacity by 2015

Construction of a new primary refining

Construction of a deep refining

complex for vacuum gasoil by 2016

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PERM REFINERY OOO LUKOIL Permnefteorgsintez The Refinery produces fuels, lubricants Located 9 km from the city of Perm Refines a blend of crudes from the northern
part of Perm Region and from Western Siberia Crude oil is supplied to the Refinery via the SurgutPolotsk pipeline and the KholmogoryKlin pipeline Petroleum products are shipped by rail, road, and river transport, and also via the Perm AndreyevkaUfa product pipeline Capacity 13.0 mln tons per year Nelson index 7.9 Main conversion processes are hydrocracking (T-Star, 65,200 barrels per day), catalytic cracking (9,300 barrels per day), coking (17,600 barrels per day) and petrochemicals

Refinery throughput, mln tons

Quality of products Since 2004 the Refinery produces diesel

fuel with sulfur content 50 and 10 ppm (Euro-4 and Euro-5) to Euro-3 standards

History of Refinery
The Refinery was put into operation in 1958. In 1991 the Refinery entered LUKOIL Group. In 19931998 a large-scale reconstruction was carried out, including extensive re-building of coking equipment, installation of a vacuum distillation unit, modern lubricant production, and creation of a system for protecting the environment. In 1999 the Refinery launched new equipment for utilization of hydrogen sulfide and production of sulfuric acid. In 2004-2005 the Refinery launched a deep oil refining complex and completed reconstruction of the vacuum block on distillation unit No4. An assembly for introduction of diesel fuel additives was installed on the hydro-dearomatization unit. In 2006 a program for reconstruction and renewal of fixed assets and technologies in the period up to 2016 was developed in accordance with the Group Strategy. In 2007 an isomerization unit with annual production capacity of 450,000 tons was launched. Annual refining capacity at the Refinery was increased to 12.4 mln tons thanks to overhaul on distillation units. In 2008 annual capacity of the Refinery increased to 12.6 mln tons. Atmospheric distillation block on distillation unit No4 was modernized to increase annual capacity by 125,000 tons. Capacity of the delayed coking unit was increased to 1 mln tons per year. In 2009 the Refinery commissioned pipe stills on its atmospheric distillation blocks, stills for hydrotreatment of diesel fuel and automated lubricant packaging line. In 2010 reconstruction of an existing coke production facilities continued. In 2011 a delayed coking unit was brought back into operation. Technical furnaces at the Refinery are also being replaced. 58

Since 2008 the Refinery produces gasoline The Refinery produces mineral, semisynthetic and synthetic lubricants to Russian and international standards (API) with the ISO 9001:2000 quality control standard

The Refinery was certified in accordance

Current modernization Construction of deep conversion facility

by 2015 including a delayed coking unit with 2.1 million tonnes annual capacity, a diesel hydrotreatment unit, a hydrogen unit and a sour water stripping unit.

NIZHNY NOVGOROD REFINERY A LUKOIL-Nizhegorodnefteorgsintez The Refinery produces fuels and lubricants Located in the town of Kstovo in Nizhny Refines a blend of West Siberian oils Crude oil is supplied to the Refinery via
and Tatarstan oils the AlmetyevskNizhny Novgorod and SurgutPolotsk pipelines Petroleum products are shipped by rail, road and river transport and by pipeline Capacity 17.0 mln tons per year Nelson index 6.3 Main conversion process is visbreaking (42,200 barrels per day), catalytic cracking (41,000 barrels per day) Novgorod region

Refinery throughput, mln tons

Quality of products Since 2004 the Refinery produces diesel

to Euro-3 standards and diesel fuel to Euro-5 standard to Euro-5 standards fuel with sulfur content of 50 ppm (Euro-4)

History of Refinery
The Refinery was put into operation in 1958. In 2001 the Refinery entered LUKOIL Group. In 2002-2003 the Atmospheric Distillation Block-5 and a hydrotreatment unit were rebuilt. The Refinery commissioned production of paraffins for food product packaging. Modernization increased production and export of paraffins. In 2004 the Refinery installed a catalytic reforming unit with annual capacity of 1 mln tons. In 2005 a vacuum separator was added to the distillation unit, which will increase yield of vacuum gas oil. In 2006 an isomerization unit with 440,000 tons annual capacity was commissioned, as a result the Refinery switched to production of motor gasolines to Euro-3 standard. Modernization of distillation unit 6 was completed, increasing its capacity to 9 mln tons. The hydrotreatment unit was also rebuilt and made it possible to start production of diesel fuel to Euro-5 standard. In 2007 the Refinery completed most of the work on installation of a vacuum residue visbreaking unit. In 2008 a vacuum residue visbreaking unit with annual capacity of 2.4 mln tons was commissioned. The unit increases margins from operations at the Refinery by reducing output of heating oil (by 930,000 tons per year) and increasing volumes of vacuum gas oil (by 860,000 tons per year). In 2009 the Refinery began production of the high-performance EKTO-98 motor gasoline. In 2010 a new catalytic cracking of vacuum gas oil complex was brought into operation to increase annual output of high-octane gasoline and diesel fuel by 1.4 mln tones and 400 tons respectively. Light product yield will increase by 12%. A unit for diesel hydrotreatment was modernized. In 2011 a hydrogen fluoride alkylation unit was brought into operation.

Since 2006 the Refinery produces gasolines Since 2011 the Refinery produces gasolines The Refinery produces mineral and
semi-synthetic lubricants to Russian and international (API) standards 243,000 tons in 2008 with the ISO 9001:2000 quality control standard

The enterprise was certified in accordance

Current modernization Construction by 2015 of a second

catalytic cracking complex using project documentation, which has already been created.

Installation of a second isomerization unit. Construction of a facility for hydrocracking

of residues is planned in the long term

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Fat Book 2012

UKHTA REfINERY OAO LUKOIL-Ukhtaneftepererabotka The Refinery produces fuels Located in the central part of the Komi Refines a blend of crudes from oil fields Crude is supplied to the Refinery Petroleum products are shipped from the Capacity 3.9 mln tons per year Nelson index 3.2 Main conversion process is visbreaking
(14,100 barrels per day) Refinery by rail and road via the UsaUkhta pipeline in Komi and Yareg heavy oil Republic

Refinery throughput, mln tons

Quality of products In 2003 the Refinery transferred to

production of winter and Arctic brands of diesel fuel fuel with sulfur content 50 and 10 ppm

History of refinery
The Refinery was put into operation in 1934. In 1999 the Refinery entered LUKOIL Group. In 20012003 a Distillation Unit-1 was reconstructed, a unit for hydrodeparaffinization of diesel fuel was commissioned. In 2004 a trestle for crude discharge and lading of dark petroleum products was put into operation. The first stage of reconstruction of a catalytic reforming unit was completed, improving its performance and increasing its annual capacity by 35,000 tons. In 2005 a block for increasing hydrogen concentration was installed in the hydrodeparaffinization unit with annual capacity of 250,000 tons of Arctic fuel. In 2006 construction of the second stage of a loading facility for oil and petroleum products with annual capacity of 4 mln tons was completed. Re-equipment of the catalytic reforming unit was also completed increasing its annual capacity from 300,000 to 380,000 tons. In 2007 the Refinery commissioned a vacuum residue visbreaking unit with 800,000 tons annual capacity enabling to increase the output of vacuum gas oil. In 2008 work continued to upgrade the catalytic reforming unit by addition of an isomerization block. In 2009 the construction work was completed on an isomerization block. Target annual input capacity for the block is 120,000 tons. In 2010 the AT-1 distillation unit was tested. The rectification tube on the vacuum column of the atmospheric-vacuum distillation unit was replaced. In 2011 work continued on refitting of the vacuum block at the atmospheric-vacuum distillation facilities and modernization of the reaction block of the GDS-850 hydrodewaxing unit.

Since 2005 the Refinery produces diesel In 2009 the Refinery started production
of gasoline to Euro-3 and Euro-4 standards

Current modernization Expansion of the vacuum block on

atmospheric-vacuum distillation unit in 2013

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MINI-REfINERY IN URAY Urayneftegaz

The Refinery produces fuels Located in Uray Refines a blend of local crudes Topping mini-refinery equipped only with an atmospheric distillation unit, catalytic reforming unit and bitumen unit Capacity 100,000 tons per year Put into operation by LUKOIL Group in 1995

MINI-REfINERY IN KOgALYM Kogalymneftegaz

The Refinery produces fuels Located in Kogalym Refines a blend of local crudes Topping mini-refinery equipped only with an atmospheric and vacuum distillation unit, a catalytic reforming unit, a hydrotreatment unit and a bitumen unit Capacity 350,000 tons per year Put into operation by LUKOIL Group in 1997

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pLOIESTI REfINERY AO Petrotel-LUKOIL, Romania The Refinery produces fuels Located in Ploiesti (central part

Refines Urals crude (Russian export blend) Crude oil is supplied to the Refinery
by pipeline from the Black Sea port of Constanta Petroleum products are shipped by rail and road Capacity 2.4 mln tons per year Nelson index 10.0 (the highest of all LUKOIL Group refineries) Main conversion processes are catalytic cracking (18,500 barrels per day) and coking (10,500 barrels per day)

of Romania), 55 km from Bucharest

Refinery throughput, mln tons

Quality of products Since 2009 the Refinery produces gasoline

and diesel fuel to Euro-5 standards

History of refinery
The Refinery was put into operation in 1927. In 1999 the Refinery entered LUKOIL Group. In 2001 the Refinery started production of high-octane gasoline and low- sulfur diesel fuel (sulfur content below 0.035%). In 2001 the Refinery suspended operations in order to carry out reconstruction. The work included: modernization of facilities for initial refining, hydrotreatment, reforming, coking, catalytic cracking, gas fractionation and isomerization construction of facilities for hydrotreat ment of gasoline, catalytic cracking and production of hydrogen In 2004 the Refinery was relaunched. In 2005 a system for dehydration of inputs using a molecular sieve was assembled on the isomerization unit; injection of secondary combustion additives was begun, allowing increase of the octane number in the catalyzer of the catalytic cracking unit. In 2006 a unit for production of MTBE/TAME additives was installed. In 2007 a 25 megawatt power supply unit was commissioned. In 2009 the Refinery completed upgrading of units for hydrotreatment of diesel fuel, catalytic cracking, hydrotreatment of gasoline produced by catalytic cracking, and production of MTBE and TAME, as well as a vacuum unit for the Atmospheric Distillation Block-1. Construction of a hydrogen unit was also completed, which made the Refinery capable of producing fuels to Euro-5 standards. In 2010 2 new coke drums of a delayed coking unit were installed. In 2011 most work was completed on a project for launch of propylene production with sulphur content below 5 ppm. 62

Current modernization Construction of FCC flue gas treatment

unit by 2014

AO PETROTEL-LUKOIL tank farm

development program (till 2013)

BURgAS REfINERY AO LUKOIL Neftokhim Burgas, Bulgaria The Refinery produces fuels and Located on the Black Sea coast, 15 km Refines Russian export blends Oil is supplied to the Refinery by pipeline Petroleum products are shipped by rail,
from the port of Rosenets road and sea transport, and also through petroleum product pipeline to central regions of the country Capacity 9.8 mln tons per year Nelson index 8.9 The main conversion processes at the refinery are catalytic cracking (34,800 barrels per day) and visbreaking (26,400 barrels per day) from the city of Burgas petrochemicals

Refinery throughput, mln tons

Quality of products In 2003 gasoline production was fully

upgraded to high-octane, unleaded products and production of clean diesel fuel with sulfur content below 0.035% was increased in EU countries are produced in compliance with Euro-5 standards

History of refinery
The Refinery was put into operation in 1964. In 1999 the Refinery entered LUKOIL Group. In 2001-2002 the Refinery began production of light high-octane gasolines and launched 5 new products to European standards, including products meeting EN-228 and EN-590 standards. In 2003 work was focused on reconstruction of the catalytic reforming unit and the catalytic cracking unit. In 2004 the catalytic reforming unit was rebuilt increasing its annual capacity to 600,000 tons, a catalytic cracking unit was rebuilt. In 2005 the regenerator of the catalytic cracking unit was rebuilt, a system was put in place for altering fuel inputs to the power and heat generating station depending on market price trends for boiler fuel and gas. Construction of a unit for production of gaseous sulfur (30,000 tons annual capacity) was completed. In 2006-2007 measures were taken to reduce emissions, and construction of a unit for isomerization of n-butane with 50,000 tons annual capacity was completed. In 2008 modernization of a diesel fuel hydrotreatment unit was completed enabling to produce fuels to Euro-5 standard. In 2009 a new unit for sulfuric acid alkylation with 300,000 tons annual capacity was put into operation, and construction of a diesel fuel hydrotreatment unit was completed. In 2010 diesel hydrotreating unit and FCC naphta hydrotreating unit started to operate. Also regeneration facility to provide regenerated amine recovery unit for hydrotreatment units was brought into operation. In 2011 a project for optimization of boiler fuel loading arrangements at the Rosenets oil terminal was completed, and work on reservoir facilities was also completed. Management systems for primary refining capacities and for catalytic cracking were upgraded.

Since 2009 all fuels to be marketed

Current modernization Construction of a complex for refining

of heavy residual stock by 2015

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ODESSA REFINERY OAO LUKOIL Odessky NPZ, Ukraine

The Refinery produces fuels Located near port of Odessa Refines Urals crude (Russian export blend) Crude oil is supplied to the Refinery by pipeline from Russia Petroleum products are shipped by rail and road transport, and also by pipeline to Odessa port, where they are loaded for export Capacity 2.8 mln tons per year Nelson index 3.9 Main conversion process is visbreaking (12,300 barrels per day)

Refinery throughput, mln tons

Quality of products Since 2004 the share of high-octane

gasoline exceeds 80% in total volume of motor gasoline gasoline to Euro-3 standards, diesel fuel to Euro-4 and Euro-5 standards

History of refinery
The Refinery was put into operation in 1937. In 2000 the Refinery entered LUKOIL Group. In 2001 the Refinery began production of vacuum gas oil and oil bitumen. In 2004 the Refinery launched an isomerization unit with annual capacity of 120,000 tons. The catalytic reforming unit and a trestle for lading of light petroleum products into tank wagons were rebuilt (annual capacity was increased by 200,000 tons). Desalting and distillation facilities were reconstructed. In mid-2005 the Refinery was closed down for major reconstruction and modernization. The Refinery completed the first stage of reconstruction in 2007. Upgrade of the distillation unit was carried out (annual capacity increased from 2.4 to 2.8 mln tons), and various other facilities were rebuilt. Test operation was successfully carried out at the Refinery. In 2008 the atmospheric unit was rebuilt for visbreaking, and the hydrotreatment complex was modernized. The Odessa Refinery was put back in operation in April 2008. After completion of the upgrade the Refinery is capable of producing motor gasoline to Euro-3 standards, diesel fuel to Euro-4 standards, jet fuel, bitumen and liquefied gas. In 2010 a construction of a gasoline blending facility was completed, it will raise efficiency in production of marketable gasoline. The Refinery was stopped in the fourth quarter of 2010 due to unfavourable economic conditions in Ukraine. There was no improvement of the economic situation, which could justify resumption of refining operations in 2011. 64

Refinery is capable of producing motor

Current modernization Possible reopening of the Refinery

in 2012 is now under consideration.

ISAB REFINERY COMPLEX The ISAB Refinery Complex, Italy Located in the south-eastern part of the Refines variuos crudes and straight-run The main suppliers of inputs are countries
of the Black Sea region, North and West Africa, of the Persian Gulf Petroleum products are shipped by road and sea transport Capacity 9.6 mln tons per year (Group share) Nelson index 9.3 The main conversion processes are catalytic cracking (1.8 mln tons per year), hydrocracking (4.5 mln tons per year), thermal cracking (2.7 mln tons per year), visbreaking (2.3 mln tons per year), deasphalting (1.6 mln tons per year) fuel oil island of Sicily near the town of Priolo

History of refinery
The Refinery was put into operation in 1975. Large-scale modernization of the complex, which began in 2003, was completed in July 2007 at a cost of more than 300 mln euros (about $390 mln). The aim of the modernization was to adapt the complex to growing demand for medium distillates on the Western European market. The modernization work integrated the northern and southern refineries into a single refining complex and increased conversion capacity. Structural changes have caused reduction in overall complex capacity from 380,000 to 320,000 barrels per day, but this is more than compensated by increased profitability of the complex due to greater complexity of production the Nelson Index has risen from 7.6 to 9.3. Modernization has also reduced air pollution from refining processes and enabled production of gasoline and fuel oil that meet European Union standards, which came into effect from January 1, 2009. LUKOIL signed an agreement in 2008 with the Italian company ERG S.p.A. on purchase of 49% share of a joint venture to operate the ISAB refining complex. In 2011 the Companys interest in the ISAB Refining Complex was increased from 49% to 60%. Value of the transaction was $342 million. The Group share in refining at ISAB was 6.95 million tonnes. 65

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ZEELAND REFINERY TRN Refinery, the Netherlands Located in the biggest oil refining
and trading hub in north-west Europe (the Amsterdam Rotterdam Antwerp region, often referred to as ARA) About 90% of Refinery output is marketed in Belgium, the Netherlands, Germany and Switzerland Petroleum products are shipped by road and sea transport The Refinery has access to Maasvlakte Olie Terminal which has 4 mln tons capacity The Refinery owns 54 reservoirs for storage of crude oil and petroleum products Capacity 3.6 mln tons per year 1 Nelson index 8.4 The main conversion process is hydrocracking (3.5 mln tons per year)

Groups share in 2011 (45%)

History of refinery
The Refinery was commissioned by Total in 1973. In 1980 the company Dow acquired 20% of the refinery. Modernization was carried out in the early 1980s and a hydrocracking unit was commissioned in 1986. Dow increased its stake in share capital to 45%. The Refinery has carried out a series of modernizations since 1990 to remain one of the most advanced facilities in Europe: units have been installed for purification of kerosene fractions and production of sulfur, and the reactor for hydrotreatment of medium distillates has been expanded to enable production of diesel fuel with sulfur content below 50 ppm. One of the most recent large modernization projects at the refinery was reconstruction of the hydrocracking unit to increase its capacity (completed in 2004). In 2009 LUKOIL signed an agreement with TOTAL S.A. for acquisition of a 45% stake in the TRN Refinery. In 2011 the TRN Refinery in the Netherlands changed its name to the Zeeland Refinery.

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