Dividend Policy amendment
The Board of Directors of PJSC LUKOIL made a decision to amend the Regulations on the Company's dividend policy.
The main principles of the new dividend policy:
the total amount of dividends on the Company's issued shares, excluding the shares held by LUKOIL Group entities, equals at least 100% of the Company's adjusted free cash flow;
the adjusted free cash flow is calculated on the basis of consolidated financial statements prepared in accordance with International Financial Reporting Standards (and is determined as net cash provided by operating activities less capital expenditures, interest paid, repayment of lease obligations, and expenses for purchase of Company's stock;
dividend per share is rounded to a whole Russian rouble;
dividends are paid twice a year with the amount of interim dividends calculated based on the consolidated financial statements for the six-month period.
Completion of buy-back programme
In August 2019, LUKOIL completed the buy-back program announced a year earlier. This resulted in the cancellation of 35,000,000 common shares of the Company and a reduction in their total number to 715,000,000, the charter capital of PJSC LUKOIL decreased to 17,875,000 rubles.
The buyback program is one of the strategic initiatives aimed at increasing the Company's shareholder value by improving corporate governance standards and improving financial policies.
Geological exploration and production in Russia
ВIn 2019, LUKOIL successfully continued the development of priority projects in the Caspian Sea. The third phase was comissioned at Vladimir Filanovsky field, new production wells were drilled as a part of the second phase at of Yury Korchagin field. Work continued on the development of the Rakushechnoye field, which was renamed to the V. Greifer fild at the end of 2019.
LUKOIL started pilot production at Yuzhno-Messoyakhskoye gas condensate field of the Bolshekhetskaya depression in Yamal-Nenets Autonomous Distric.
Foreign Upstream projects
Having extensive experience in the development of oil production projects on the Caspian shelf, LUKOIL, the Ministry of Energy of the Republic of Kazakhstan and JSC NC KazMunayGas have concluded a contract for the exploration and development of hydrocarbons on the Zhenis block in the Kazakh Sector of the Caspian Sea.
Cumulative production at the West Qurna-2 field in Iraq has reached 100 million tons of oil in 2019. With 184 wells drilled at the field, the average daily production rate is 400,000 barrels. Drilling contracts were signed for new production wells, including the Mishrif and Yamama formations. Well testing was successfully completed as part of the appraisal phase at the Eridu field (Block 10), which made it possible to confirm the geological model.
In addition, in 2019, LUKOIL acquired a 25% stake in the Marine XII project in the Republic of the Congo and 5% in the Gasha project in the UAE.
The Volgograd refinery began production of low-sulfur fuel oil (FUEL OIL BUNKER 0.5), complying with requirements of the MARPOL international convention, with a production plan about 1 million tonnes of such fuel per year. The new products meets the MARPOL requirements limiting sulfur content in marine fuel to 0.5% or less for ships navigating under the aegis of the UN International Maritime Organization (IMO).
A new lubricants plant was opened in the Almaty region (Republic of Kazakhstan) with an annual output of 100,000 tons. ГThe location of the facility makes it possible to optimize the logistics of LUKOIL's lubricants supplies in Kazakhstan and other countries of Central Asia. he highest level of process automation allows for producing and shipping lubricants to the customer within 24 hours.
Global liquid hydrocarbons outlook presentation
At the end of 2019 LUKOIL presented a long term outlook for the global market of liquid hydrocarbons in light of the global energy transformation.
The outlook for the future of global energy to 2035, based on three scenarios of various approaches to climate regulations, analyzes how structural changes in the world's motor vehicle fleet, development of electric vehicles and expected increase of fuel efficiency will affect oil demand.
Cultural development of the regions of presence
A new stage of the Maly Theater - first one in Russia outside Moscow - with the support of LUKOIL was opened In one of the key cities of Western Siberia - Kogalym. The equipment of the new stage will allow performances at the same technical level as on the main one in the capital.