Efficiency Strategy Above Perm Plant

A LUKOIL LUBRICANTS COMPANY PUBLICATION MARCH 2018

TOP STORY

10 Quality flag 23 Turning on flutters high “Sports mode” Efficiency strategy above Perm plant

CONTENTS

CORPORATE AFFAIRS 14 XCMG, China’s leading 2 Efficiency strategy construction machinery 8 4 Building a global business producer, picks LUKOIL lubricants COOPERATION 15 Kuzbassrazrezugol substitutes 100 percent of imported lubes 7 Delovye Linii’s reliable 15 LUKOIL’s new hydraulic supplier transmission oil meets 8 LUKOIL inks deal with Caterpillar standard FosAgro, leader in European mineral fertilizer market PRO PROFILE 9 Our synthetic oil 16 Striving for excellence reaches South Korea in what I do 9 Service fill deal with HELI, China’s special-purpose PRODUCT machinery manufacturer 18 60,000 kilometers 13 CORPORATE AFFAIRS across entire Russia with “PROFESSIONAL” 10 Quality flag flutters high above Perm plant CORPORATE AFFAIRS 20 Sea of opportunities DIVERSIFICATION 13 Demand for LUKOIL’s MARKETING bituminous materials rises 23 Turning on “Sports in Russia’s southern regions 20 mode” COOPERATION FORUM 14 LUKOIL is Russia’s first lubes 24 Avantgarde solutions brand listed in SMS group’s for agricultural companies lubrication chart

LUKOIL LUBRICANTS, March 2018 23 LUKOIL LUBRICANTS is a LUKOIL Lubricants Company publication Publisher: RPI Address: LUKOIL Lubricants Company, 6 Malaya Yakimanka, Moscow 119180 Phone: +7 495 980 3912 E-mail: [email protected] Press run: 200

LUKOIL LUBRICANTS | March 2018 1 CORPORATE AFFAIRS

EFFICIENCY STRATEGY

LUKOIL’S 2027 DEVELOPMENT STRATEGY FOCUSES Firstly, LUKOIL’s vice president ON GROWTH OF ECONOMIC EFFICIENCY, MODERN spoke about the Company’s new development vector, which was adopt- TECHNOLOGIES AND HUMAN INTELLIGENCE ed after factoring in new challenges in the global market. “LUKOIL Group’s strategy in 2018–2027 evolves more around improving n the beginning of the year, the founders of LUKOIL, the chief economic efficiency and increasing LUKOIL Vice President for of the strategic development divi- the share of high added value prod- Strategic Development, and board sion, which made a big impact on ef- ucts rather than boosting produc- member Leonid Fedun visited ficient strategic management and tion volumes,” said Leonid Fedun. LUKOIL Lubricants Company’s sustained growth of the Company’s “The representatives of LUKOIL’s Ihead office. The agenda of his visit market capitalization,” stressed different subsidiaries took an ac- included a working meeting with the LUKOIL Lubricants Company gen- tive part in preparing the plans for Company’s management team, and a eral director Maxim Donde as he in- this decade. LUKOIL Lubricants meeting with its employees. troduced the honored guest to the Company’s proposals have also “We have established a nice tra- staff. found their reflection in the strat- dition of communication with the Over the course of an hour-long, egy related to promoting the lu- Company’s top executives. Meeting lively discussion with Leonid Fedun, bricants business and further en- with interesting people, true, ded- a number of issues were raised rang- hancement of the bitumen business icated professionals helps advance ing from the Company’s prospects program, with a stress on mod- personal development, broadens and global economy to the rules of ern R&D solutions, attention to our knowledge, and inspires new efficient management and self-devel- high-profit niche products and de- ideas. Today, our guest is one of opment. velopment of high quality service.”

2 CORPORATE AFFAIRS Leonid Fedun thanked the staff of LUKOIL Lubricants Company for its significant contribution to LUKOIL’s success, and noted that lubricants as a high tech business line is at the forefront of the Company’s operations. The vice president also supported LUKOIL Lubricants Company’s initiatives to develop digital projects in marketing, services and logistics. “The oil industry is entering a digital phase, the world is changing quickly. Our new strategy envisages maximum use of Big Data, auto- mation, manufacturing robotization, and end-to-end data control of all di- visions of LUKOIL. The 2027 strategy also suggests that close attention be paid to the knowledge management system and staff training. The LUKOIL LUBRICANTS COMPANY GENERAL DIRECTOR MAXIM DONDE SHOWS Group’s subsidiaries will imple- LUKOIL VICE PRESIDENT LEONID FEDUN ROUND THE CORPORATE MUSEUM ment such projects as ‘Digital Plant’, DURING A BRIEF TOUR ‘Digital Petrol Station’, ‘Smart Field’, and ‘Smart Power Generation’. The global experience in pioneering sim- Responding to the employees’ only see the ‘outer shell’ of events ilar projects has already produced a questions, the LUKOIL executive re- and processes, but to understand the solid economic effect,” said the vice called the most memorable events ‘driving force’ behind them. Finally, president in response to the staff’s from his business biography, and top results can be achieved when question regarding his vision of the gave the young colleagues a piece of you’re not trampling common mor- oil and gas industry’s future. advice on career development. al and ethical principles in order to Changing consumer behavior, de- “You need to smoothly blend into reach them. A man’s or a company’s velopment of renewable energy and the system you’re working in, make reputation for integrity and hones- electric transportation also pose a an effort to become an important and ty is a huge capital, which helps build challenge to industry. Traditional valuable part of it, keep developing a true success story,” underlined energy sources will continue to your intelligence, and learn to not Leonid Fedun. dominate over a long period of time, before a true technology breakthrough takes place in unconven- THE COMPANY’S YOUNG PROFESSIONALS WERE EAGER TO ASK LEONID FEDUN tional energy, believes Leonid Fedun. QUESTIONS ON VARIOUS ISSUES Meanwhile, the Company will keep its focus on this field, and is currently involved in several projects in hy- dro, wind and solar energy. Earlier this year, for instance, LUKOIL launched the operation of its first solar power plant at the Company’s oil refinery in Volgograd. LUKOIL Lubricants Company also takes in- to account promising market trends, and develops lubricants and process fluids for hybrid and electric vehicles. In the bitumen business, the Company has begun working on developing a new series of innovative products.

LUKOIL LUBRICANTS | March 2018 3 CORPORATE AFFAIRS

BUILDING A GLOBAL BUSINESS

IN 2017, THE COMPANY CONTINUED TO EXPAND this, LUKOIL has also signed a stra- ITS GLOBAL REACH AND DIVERSIFY PRODUCT PORTFOLIO tegic agreement with the Russian Export Center on promotion of high technology lubricants abroad. The Company was among the first recip- teady growth of sales of In 2017, added Maxim Donde, the ients of the Made in Russia quality LUKOIL’s premium lubes sales of products bearing the LUKOIL certificate. continued, new offices brand jumped by 14 percent, the “In 2017, our business grew rad- were opened in China and Company continued to expand its ically. LUKOIL handed over its bi- Mexico, and the Company product portfolio, primarily owing tumen program to us. You certain- Sbegan the implementation of a full- to close cooperation with the world’s ly do remember [19th century writer] fledged bitumen program. In a nut- leading carmakers, R&D approach Nikolai Gogol’s catch phrase about shell, these are the key achievements and implementation of new technol- Russia’s two key problems*. Since of LUKOIL Lubricants Company, the ogy. According to last year’s perfor- the handover of the bitumen pro- Russian lubricants industry’s flagship mance results, the number of OEMs’ gram, we began to feel that we are firm, in 2017. approvals reached 1,200 and all for- directly responsible for solving one “This was a record year for us, eign-owned car engine plants in of those problems. In the cost struc- eventful, and very dynamic,” said Russia became LUKOIL customers. ture of road construction bitumen LUKOIL Lubricants Company general Last year, the Company contin- accounts for only 4 percent of the to- director Maxim Donde as he looked ued its successful expansion into new tal cost, but actually it determines to back on 2017 during a traditional foreign markets, setting up subsidia- a large extent the quality of roads we press event held in late December. ries in Shanghai and Mexico City. In drive on. Sometimes, we are not very Today, LUKOIL Lubricants 2018, it plans to open a project of- happy with that quality. So, we have Company deservedly bears the torch fice in an African country. Besides undertaken a serious task to tack- of leadership in the lubricants industry: its products are manufactured at seven LUKOIL plants, two joint ven- * The phrase is attributed to Nikolai Gogol who reportedly identified “fools and roads” as Russia’s two key problems, tures and 25 third-party plants. in the latter case making an apparent reference to the poor quality of roads.

4 CORPORATE AFFAIRS le this fundamental national prob- SALES OF LUKOIL-BRANDED LUBRICANTS, LUKOIL LUBRICANTS COMPANY lem. The handover of the bitumen business took place in June 2017, and after that we began to put together CAGR 9% (2007–2017) the development strategy, which was then reviewed and green-lighted in 9% November,” Maxim Donde said. According to him, LUKOIL’s bitumen program includes five key points: establishment of an R&D center; development of a portfolio fea- turing innovative products as per specific customer requests; fulfill- 2007 … 2014 2015 2016 2017 ment of a five-year manufacturing facilities upgrade plan; building a single logistics chain; expansion of new products, among which I want ing equipment, аnd this year the export potential. to single out the LUKOIL GENESIS Company plans to start producing Restored growth of national econ- ARMORTECH VN 5W‑30 engine oil, small quantities of Group II+ base oil. omy and GDP, as well as increasing designed for use in Volkswagen cars Meanwhile, LLK-NAFTAN in 2017 in- sales of new cars could spur growth (Audi, Volkswagen, Skoda) with the creased its additives sales by 20 per- of Russia’s lubricants market by 1–3 VW 504 00/507 00 approval. This is cent thanks to the application of new technological solutions. According to deputy general director for development Maxim TODAY, LUKOIL LUBRICANTS COMPANY DESERVEDLY BEARS Myskin, one of the Company’s key THE TORCH OF LEADERSHIP IN THE LUBRICANTS INDUSTRY: priorities is the development of co- ITS PRODUCTS ARE MANUFACTURED AT SEVEN LUKOIL PLANTS, operation with original equipment TWO JOINT VENTURES AND 25 THIRD-PARTY PLANTS manufacturers (OEMs). The results achieved in this field are impres- sive: in 2017, LUKOIL continued successful cooperation with its exist- percent per year, said deputy gener- the first oil with this approval pro- ing partners, and launched new al director for economic and finan- duced in Russia.” partnerships with such compa- cial issues Nikolai Tikhomirov. In The company is also working in- nies as Dongfeng, Peugeot-Citroen, 2007–2017, LUKOIL posted a 9-per- tensively on manufacturing compo- Palfinger, DOOSAN, Liebherr, Toyota cent average annual growth in sales nents such as base oils and additives. Material Handling. Each fourth car in of branded lubricants. Its subsidiaries In Volgograd, the hydrocracking unit Russia, including foreign brands, to- demonstrated even bigger growth, was launched, it produces poten- day runs on LUKOIL engine oil, and recording on average a 48-percent tial raw materials for manufactur- the Company’s achievements have annual jump in sales. ing Group II and III base oils, whereas been duly recognized by the Russian Following the trend of increas- full-fledged production is sched- Automobile Forum, which named ing production of environmental- uled to begin in 2020. Last year, we LUKOIL “The Best Russian Supplier” ly friendly fuels, which marked the conducted test runs on the exist- in 2017. previous decade, the focus has meanwhile shifted toward higher fuel economy, said R&D director Andrei SALES OF LUKOIL-BRANDED LUBRICANTS, SUBSIDIARIES Sterkhov. “Our main strategy is to develop CAGR 48% (2007–2017) new products jointly with car manufacturers from the initial stage. This year, we approved and devel- 48% oped a midterm program, which includes 15 projects on passenger cars (9), heavy duty (3) and industrial machinery (3),” he said. “We are finish- ing the year with approximately 50 2007 … 2014 2015 2016 2017

LUKOIL LUBRICANTS | March 2018 5 standard of the German Association of the Automotive Industry. The Company has also stepped up activities to market its products via new sales channels: an Internet store was opened, and LUKOIL lubricants can also be bought via leading digital sales platforms such as Alibaba, Ozon, Yandex-Market, and others. Deputy general director for sales Rasim Amiraliyev told the audience that the Company had developed in- tegrated turnkey solutions for major industrial customers, and signed oil supply contracts with a number of leading industrial and shipping companies such as Severstal, ALROSA, ArcelorMittal and Mosgortrans. LUKOIL’s manufacturing facili- Among other achievements, global plants owned by the carmak- ties will be upgraded and expanded, Maxim Myskin also noted clean au- ers’ alliance. The Perm plant was al- said deputy general director for man- dits of lubricant plants in Vienna and so recognized as fully compliant ufacturing Kirill Vereta. In the second Perm by Renault-Nissan-Mitsubishi, with Ford — Quality System Q1 and quarter of 2019, the Company will put which provide an opportunity for Volkswagen Formel Q quality control into operation a state-of-the-art plant LUKOIL to supply its products to all systems, and certified as per VDA 6.3 in Kazakhstan with a 100,000-ton manufacturing capacity. A milestone event will take place in Volgograd: the opening of a modern logistics center for drivers, equipped with an innovative electronic queue management system, comfortable parking areas and waiting zones. The greases business has been developing rather success- fully at the Volgograd-based INTESMO plant. Today, its products are deliv- ered to 17 countries around the globe, the share of import-substituting FLEX greases is going to reach 24 percent in 2018, while the plant’s high tech engineering center has already employed more than 200 different test methods. Over the last year, LUKOIL’s share in the global market of marine lubricants has increased from 10 percent to 12 percent, which is particularly significant in a stagnating market, said LUKOIL Marine Lubricants CEO Viktor Zhuravsky. The company signed major contracts with Canada’s Seaspan, UK-based Lomar Shipping and Blystad Group, Mitsui OSK Lines (Japan) and Finnlines (Finland). In 2014–2016, the companies, which had installed the intelligent cylinder oil lubrication (iCO- lube) system, switched 386 vessels to use of LUKOIL lubricants.

6 CORPORATE AFFAIRS COOPERATION

Moreover, in an effort to minimize the risks of purchase of counter- feit or insufficiently reliable expendables, the freight carrier tries to deal directly with producers, and regularly hires third-party experts to conduct independent checks of fuels and lubricants suppliers. “We visited LUKOIL plants and are aware of the effort that the company had made to upgrade its equipment for manufacturing products that meet tough requirements of producers of high tech foreign vehicles,” notes Andrei Getmansky. He also added that LUKOIL’s potential DELOVYE LINII’S would allow the company to become Delovye Linii’s “universal supplier” over time. RELIABLE SUPPLIER “During our cooperation in recent years, we were able to witness a number of times the high level of professionalism and competence of n 2017, Delovye Linii Group award- track record of operation, or those your employees, and our interaction ed for the third consecutive year a producers whose products’ test re- was always based on mutual respect Istrategic partner’s silver medal to sults have been highly valued by the and trust,” stressed our colleagues at LUKOIL Lubricants Company. The shipping company. Delovye Linii. two companies began to cooperate in 2015 when LUKOIL launched deliveries of lubricants to the logistics op- erator. “The conditions of vehicle operation in Russia significantly differ CARGO SHIPPING MARKET from those in many foreign countries. That is why we always work LEADER closely with car manufacturers in order to determine optimum conditions Delovye Linii Group is one of for servicing and maintenance, se- Russia’s largest shipping and logis- lect reliable suppliers of fuel and high tics companies. Its fleet includes ap- quality spare parts. This policy helps proximately 4,000 vehicles, and us avoid serious problems related to more than 50 percent of those are vehicle repair and meet all require- long-haul tractors with trailers. The ments regarding safe operation of ve- fleet also includes more than 1,500 hicles,” comments Andrei Getmansky, light commercial vehicles and ap- adviser to Delovye Linii Group’s gen- proximately 300 passenger cars. eral director on issues related to au- The greater part of truck fleet is tomobile logistics. made up of Mercedes-Benz, Scania According to Getmansky, Delovye and Volvo trailer trucks, where- Linii select spare parts, fuels and lu- as Ford and GAZ vehicles dominate the light commercial vehicles fleet. One bricants suppliers via tenders, admit- of Delovye Linii’s key goals in terms of car fleet development is the gradual ting to competition only those part- phase-out of trucks compliant with Euro 3 and Euro 4 environmental stan- ners whose products have a positive dards.

LUKOIL LUBRICANTS | March 2018 7 COOPERATION

UKOIL has launched a full-blown cooperation with the Moscow- Lbased FosAgro Group, one of the world’s leading producers of mineral fertilizers, as its lubricants supplier. In 2018, FosAgro-owned companies аre going to buy more than 2,000 tons of LUKOIL lubricants. AVANTGARDE ULTRA M3 motor oil and transmission oil for heavy-duty trucks will account for the bulk of contracted supplies. Last year, the quarry and mining machinery of FosAgro Group’s flagship producer, the Kirovsk-based LUKOIL INKS DEAL Apatit subsidiary, tested LUKOIL’s latest motor and gear oils. The successful outcome of these tests se- WITH FOSAGRO, LEADER cured the Company’s participation in Apatit tenders, and the resulting re- IN EUROPEAN MINERAL placement of a considerable amount of imported lubricants with LUKOIL products. FERTILIZER MARKET

FosAgro Group is the largest ULTRA TESTS European producer of phosphorus fertilizers and the world’s biggest manufacturer of high-class phos- АVANTGARDE ULTRA M3 15W‑40 phate raw materials. The company’s semi-synthetic oil was developed main products, including phosphate in 2016 for heavy-duty construc- raw materials, feature more than tion, special-purpose and quar- 35 brands of fertilizers, feed phos- ry machinery. The product obtained phates, ammonia and sodium trip- the following approvals: MTU Oil olyphosphate, and are used world- Category 3, Volvo VDS‑3, Mack EON, wide by customers in 100 countries Renault VI RLD‑2 and Cummins CES on all continents. 20078. It complies with the require- “For the first time in its history, ments of API CI‑4/SL, Cummins CES LUKOIL will supply products to the 20077, MAN M 3275–1, MB228.1, Volvo companies that are part of FosAgro VDS‑2, and Mack EO-M Plus. In 2017, Group. In my opinion, we have a АVANTGARDE ULTRA М3 oil was suc- huge potential to develop this co- cessfully tested on FosAgro, ALROSA operation. In the future, we plan to and Catoca quarry machinery, logging propose to our partner LUKOIL’s in- 750 engine hours. Currently, the product is being tested at the Mikhailovsky tegrated service program and new mining and processing works on BelAZ quarry dump trucks. This time, the special lubricants for chemical oil is expected to log 1,000 engine hours! Preserving the product’s optimum equipment, as well as accompanying properties over 1,000 hours of operation translates to 1.25–2 times longer products,” said LUKOIL Lubricants drain intervals, performing on a par with other API CI‑4-compliant prod- Company general director Maxim ucts in the market. Donde.

8 COOPERATION OUR SYNTHETIC OIL COOPERATION REACHES SOUTH KOREA

UKOIL has launched its first deliveries of synthetic motor oil to South LKorea. Lotte Group, one of South Korea’s largest business conglomer- ates, which includes more than 60 companies operating in diverse fields, will be using LUKOIL LUXE 5W‑30 and 5W‑40 motor oil for its passenger car and commercial vehicle fleets. Best known members of this business group, which operates around the world, include Lotte Shopping Co (retail), Lotte Real Estate (real estate), Lotte Ice Cream (food industry) and Lotte Hotels & Resorts (hotel chain). LUKOIL LUXE 5W-40 is a fully synthetic multi-grade engine oil meeting requirements of API SN/CF and ACEA A3/B4. This lubricant, for- the very first API SN-licensed prod- manding ACEA A5/B5, A1/B1, Ford mulated using high-quality synthet- uct made in Russia. LUKOIL LUXE WSS-M2C913-А, WSS-M2C913-В, ic base oils with involvement of ad- 5W-30 (API SL/CF) was specially de- WSS-M2C913-C or RN 0700 specifica- vanced technology additives, was veloped for Ford and Renault cars de- tions.

SERVICE FILL DEAL WITH HELI, CHINA’S SPECIAL-PURPOSE MACHINERY MANUFACTURER

UKOIL has signed a contract to supply lubricants to Asia MH, the exclusive distributor of HELI LMachinery and one of the largest suppliers of lifting machinery to Russia. Asia MH sells and provides after-sales maintenance of China’s machinery used in warehousing, chiefly the HELI brand, which is among the world’s top‑10 load- er manufacturers. In Russia, this brand has been in the market for over 20 years. Currently, more than 12,500 HELI loaders are used throughout the country. LUKOIL GEYSER hydraulic oil, LUKOIL AVANTGARDE ULTRA motor oil, and FLEX plastic greases will constitute the bulk of LUKOIL’s supply to Asia MH service centers.

LUKOIL LUBRICANTS | March 2018 9 CORPORATE AFFAIRS

QUALITY FLAG FLUTTERS HIGH ABOVE PERM PLANT

IN DECEMBER 2017, LUKOIL LUBRICANTS COMPANY STAFF AND THE MEMBERS OF A FORD DELEGATION RAISED THE FORD Q1 FLAG — THE CAR MANUFACTURER’S MARK OF QUALITY — IN FRONT OF LUKOIL’S LUBRICANTS PLANT IN PERM. TATIANA PLOTNIKOVA, SENIOR MANAGER AT THE ECONOMICS AND PLANNING DEPT., SPEAKS AT LENGTH WHY PLANT CERTIFICATION HAS BECOME TODAY ONE OF THE COMPANY’S KEY COMPETITIVE ADVANTAGES IN THE MARKET OF OIL SUPPLY TO CAR PRODUCERS

The car manufacturers’ prac- tion not only to the quality of com- tice of conducting audits of lubricant ponents and expendables, but to the plants, already widespread through- technological level of manufacturing out the world, is picking up pace in processes at suppliers’ plants, too. It Russia. The reasons behind its grow- is difficult for large industrial com- TATIANA PLOTNIKOVA, ing popularity are easy to detect. panies to underestimate the impor- SENIOR MANAGER The growing competition in the car tance of reliable suppliers, capable of AT THE ECONOMICS market urges producers to develop producing components of required AND PLANNING DEPT. their own product quality manage- quality on time. ment systems, as well as the meth- Despite the fact that auditing of ods of quality management used by suppliers is a rather costly affair, it ming from the supply of low quali- their suppliers. Original equipment helps OEMs minimize commercial, ty components. Each year, LUKOIL manufacturers (OEMs) pay atten- image, legal and other risks stem- Lubricants Company is audited up

10 CORPORATE AFFAIRS to nine times, depending on the au- had to study, discuss, create plans for ready been certified, IATF 16949:2016 dits’ complexity and deadlines. Over their implementation, conduct anal- took into account numerous require- the course of two days, OEM repre- ysis of measurement systems and ments by car producers, risk-ori- sentatives have an opportunity to get Failure Modes and Effects Analysis ented approach, and the executives’ fully acquainted with the Company’s (FMEA), study the specifics of oper- increased involvement in the man- production structure and culture, ation of problem-solving tools, and agement system. After the new ver- which helps us stay alert all the time many other things. OEMs’ recom- sion of IATF 16949:2016 went into ef- and prepare responsibly for au- mendations helped us develop our fect, car producers reviewed their dits. It should be added that — unlike own system of continuous monitor- own requirements. At the same time, LUKOIL — many companies today are ing of opportunities for further im- some of them also make addition- not willing to fully disclose internal provement. We discuss these op- al demands such as Ford’s Edisoft information. portunities at our regular meetings Data Interchange (EDI) Platform, The successful passage of car manufacturers’ audits allows LUKOIL to participate in their global tenders for lubricants supply. OEMs’ checks also detect areas where we can im- prove, and facilitate exchange of experience. Besides, they rally the team and urge us to be even more atten- tive when fulfilling our own tasks during the certification process. Over the last five years, the Company has achieved significant success in certification issues. The related work with plants began in autumn 2013, right after the deci- sion had been made to put these as- sets onto the Company’s books, and as early as March 2014 the ISO 9001 compliance audit was passed. However, car manufacturers increas- ingly insisted that our companies be certified in compliance with the ISO/ TS 16949 standard, which led us to certify our Perm plant and the head office in Moscow in the first half of 2015. Thus, over a relatively brief period of time LUKOIL Lubricants Company traveled the path from ob- taining ISO 9001 basic certificates to named ‘Days of Quality’, and held or Renault’s “Competency Matrix”. full certification of its plants as per once a month. All of this we had to factor in when car industry standards and securing When it was reviewing the ISO/ adapting manufacturing and logistics Russia’s only “back up plant” system, TS 16949:2009 standard related to re- to OEM standards. which requires the availability of at quirements on quality system man- The certificates issued by some of least two certified plants owned by agement for suppliers of spare parts the giants of global car industry such the lubes producer supplying oil to and expendables to car produc- as Volkswagen, Ford, Renault, and OEMs’ car factories. ers, the International Automotive others, illustrate the best the quality LUKOIL Lubricants Company has Task Force (IATF) made an effort of work we performed. already taken into account a num- to analyze, factor in and harmo- On a separate note, Lobau ber of requirements on control of in- nize requirements to suppliers by and Perm plants received presti- coming materials, products, manu- different car producers, and en- gious VDA 6.3 certificates, issued facturing processes, staff training. ter them in a new version of the by the German Association of the Well-coordinated work in these areas IATF 16949:2016 standard. As op- Automotive Industry. The VDA cer- has been under way for several years posed to ISO/TS 16949:2009, accord- tification is focused primarily on the now. Some of these requirements we ing to which LUKOIL plants had al- processes of a product’s life cycle,

LUKOIL LUBRICANTS | March 2018 11 LUKOIL LUBRICANTS COMPANY’S PLANT IN LOBAU, AUSTRIA, Mexico, the world’s leading markets WAS CERTIFIED AS PER THE VDA 6.3 STANDARD OF THE GERMAN ASSOCIATION and centers of global car industry. OF THE AUTOMOTIVE INDUSTRY Among our current tasks, we should single out the campaign to certify plants as per renewed IATF both its own, and its suppliers’. An When new car models are produced, 16949:2016 standard. In 2018, a recer- important tool for evaluating their the companies that possess the VDA tification audit will be conducted in state is the process audit, which is an certificate become prioritized en- Perm (the Volgograd plant and the integral part of the VDA strategy. In gine oil suppliers on placed orders. Moscow head office were checked in the hands of top executives and the Having brought our manufacturing December 2017 and will soon be is- Procurement Dept. this is a powerful processes in sync with the expecta- sued their respective certificates). In tool for quality control. tions of several key majors, we were June 2018, we will complete the cer- By the way, not many ISO- able to see how the trust of other tification as per IATF standard of our certified companies possess a VDA car manufacturers in LUKOIL grew manufacturing plant in Tyumen, certificate. In order to obtain this as well. The Company was also giv- which will provide an opportunity to document, suppliers need to comply en an opportunity to participate in expand the volume of first fill oil -de with strict requirements of German large international tenders held by liveries for foreign-made special ma- car manufacturers regarding logis- car producers, which was particular- chinery. tics, quality control system orga- ly important in light of the launch nization and manufacturing pro- of our operations in China and cesses, document management and observance of environmental rules.

12 CORPORATE AFFAIRS DIVERSIFICATION

materials and testing these materials at specially designated road sections in the above-mentioned regions. Earlier, similar agreements had been signed with the Perm territory authorities and the Udmurtia gov- ernment. This means that over the last few months five Russian regions have decided to buy LUKOIL’s bituminous materials.

THE EPITOME OF QUALITY

DEMAND FOR LUKOIL’S LUKOIL’s bitumen is known as one of the top quality products in the market. Today, the company ac- BITUMINOUS MATERIALS counts for about 15 percent of national bitumen production. In the RISES IN RUSSIA’S middle of 2017, LUKOIL’s bitumen program was handed over to LUKOIL Lubricants Company, the leader of SOUTHERN REGIONS Russia’s lubricants market. Also last year, the new corporate strategy was adopted in regard to development uring the Russian Investment Governor Vladimir Krupin, Stavropol of this promising business sector. Its Forum in Sochi, LUKOIL territory Deputy Prime Minister, implementation began at the end of Dsigned agreements with Road Industry and Transportation 2017 when a discharge rack for raw Transportation and Road Industry Minister Roman Petrashov. materials was put into operation Ministries of the Rostov region, The deals pinpoint the promising at the LUKOIL-Permnefteorgsintez Krasnodar territory and Stavropol areas of cooperation with road indus- plant. The new facility will enable territory. try authorities, including deliveries an efficient run of the bitumen unit The agreements were signed by of the most advanced bituminous main Perm and will provide the region LUKOIL Lubricants Company gener- terials to road construction compa- with high quality binding materials. al director Maxim Donde, Krasnodar nies so they can produce asphalt with Another important element territory Transportation and Road enhanced performance properties. of the bitumen business develop- Industry Minister Alexei Pereverzev LUKOIL will also take part in development strategy is the establishment (photo), Rostov region Deputy ing the new generation of bituminous of an R&D center in an effort to expand LUKOIL’s product portfolio. The Company’s plans include creating a wide range of innovative bitumen products, which will be developed in close cooperation with road owners, road construction and designing companies. The development strategy also envisages upgrades of LUKOIL’s manufacturing facilities, negotiation and signing of direct contracts with leading companies in the road construction industry, and fulfillment of LUKOIL’s export potential.

LUKOIL LUBRICANTS | March 2018 13 COOPERATION LUKOIL IS RUSSIA’S

ermany’s SMS group, one FIRST LUBES BRAND of the global leaders in ma- Gchine-building and design LISTED IN SMS GROUP’S of metallurgical units, has added LUKOIL to its list of recommended lubricants suppliers for use in SMS LUBRICATION CHART group equipment.

The recommended LUKOIL products include GEYSER hydraulic oils, including fire-resistant HFDU and HFC oils, INTEGO PREMIUM oils for rolling mills, FREO met- alworking fluids and FLEX series plastic greases. LUKOIL thus became Russia’s first company listed among SMS group’s top 10 global lubricants suppliers whose products have been declared compliant with the German company’s standards.

XCMG, CHINA’S LEADING CONSTRUCTION MACHINERY PRODUCER, PICKS LUKOIL LUBRICANTS

UKOIL has signed a one-year contract for service countries. The company specializes in manufacturing of fill with the Russian representation office of China’s truck-mounted cranes, earth movers, compaction ma- LXuzhou Construction Machinery Group Co. Ltd. chinery and drilling rigs. (XCMG). LUKOIL lubricants will be used in maintenance of road and construction machinery as well as other XCMG-branded special-purpose machinery. The list of contracted products includes LUKOIL AVANTGARDE ULTRA motor oil, LUKOIL ТМ and ATF transmission oil, LUKOIL GEYSER hydraulic oil, FLEX greases and process fluids. XCMG is the world’s fifth-largest manufacturer of construction machinery, and its products are sold in 174

14 COOPERATION COOPERATION

largest open-pit coal mining company. The Company has expanded its range of products supplied to Kuzbassrazrezugol, and will eventually cover 100 percent of the industrial giant’s quarry machinery’s demand for premium products that meet the latest international specifi- cations. KUZBASSRAZREZUGOL Kuzbassrazrezugol has been one of LUKOIL’s key clients since SUBSTITUTES 100 PERCENT 2009. In 2012, LUKOIL had carried out a special service program for OF IMPORTED LUBES Kuzbassrazrezugol for the first time at Krasnobrodsky and Taldinsky sur- face coal mines. The program includ- n 2018, LUKOIL will sustain part- plier of oils and greases. Over the ed machinery maintenance services, nership with Kuzbassrazrezugol year, LUKOIL will deliver around and also provided for delivery of mo- Imanaging company as its key sup- 6,000 tons of lubricants to Russia’s bile oil-filling units.

LUKOIL’S NEW HYDRAULIC TRANSMISSION OIL MEETS CATERPILLAR STANDARD

aving studied the mining draulic systems, gearboxes, convert- le drives, hub drives, and axles of companies’ current demand ers, and wet brakes. The oil is compli- off-road trucks, caterpillar tractors Hfor hydraulic transmission ant with API MT‑1, Komatsu, Allison with track carrying wheels. This oils for use in foreign machinery, C‑4, ZF-TE-ML 07F, ZF-TE-ML 03C product is a perfect fit for the ma- LUKOIL developed in 2017 two pro- and Caterpillar TO‑4 requirements. chinery parts oiled by lubricants gressive products, LUKOIL GEYSER LUKOIL GEYSER ММ 60 miner- that are compliant with the Cat FD‑1 ММ 60 and LUKOIL GEYSER ММ al oil was developed for use in ax- specification. SYNTH 5W‑30 oils, which meet tough Caterpillar requirements, and are designed to replace imports. The Company will start delivering the new products this spring. Compared to the TO‑4 standard requirements, both products boast longer drain intervals and improved scuff resistance. LUKOIL GEYSER ММ SYNTH 5W‑30 synthetic oil is recommended for use in heavy-duty transmission components, which require the use of lubricants compliant with the TO‑4 standard: in axle and hub drives, differential gear trains, hy-

LUKOIL LUBRICANTS | March 2018 15 PRO PROFILE

THERE HAS NEVER BEEN A SHORTAGE OF OUTSTANDING PEOPLE IN OUR TRULY INTERNATIONAL COMPANY. IN THIS ISSUE, WE HAVE ASKED SINEM CINAR, OUR COLLEAGUE IN CHARGE OF MARKETING DEVELOPMENT AT LUKOIL LUBRICANTS MIDDLE EAST SINCE THE DAY OUR TURKISH SUBSIDIARY WAS ESTABLISHED, TO INTRODUCE HERSELF IN THE MAGAZINE’S TRADITIONAL “PRO PROFILE” SECTION. SINEM’S RICH 15-YEAR EXPERIENCE IN SALES AND MARKETING OF OIL PRODUCTS, COUPLED WITH A CHEMICAL ENGINEERING BACKGROUND, AN MBA DEGREE, AND ABUNDANT CREATIVE ENERGY HELP HER BUILD LUKOIL’S LUBRICANTS BUSINESS IN SOUTHWEST ASIA

STRIVING FOR EXCELLENCE IN WHAT I DO

was born in Istanbul, and I eventually completed my ternational development of its lubricants business, and Bachelor’s degree in Chemical Engineering here, at such a stance has been my ultimate driving force. Yıldız Technical University, one of the world’s old- Over many years in my marketing job at LUKOIL, est technical state universities dedicated to engineer- I have been working closely with our sales team on ing sciences. I had always had a special interest in the launching new products and promoting them in the mar- Ienergy sector, and that is why during my Bachelor’s de- ket. For me, the most thrilling experience was being able gree studies I worked on a research project on gener- to see the real results of our projects, and to receive the ation of energy by gasification of urban wastes. After customers’ positive feedback on our team’s solutions. graduating in 2004, I immediately started working at a A marketing specialist’s job demands that you think local fuel distribution company. A year later, the com- out of the box, and keep learning constantly. In an ef- pany’s owners decided to enter the lubricants business, fort to expand broadly my professional horizons, I en- and I was subsequently transferred to the Lubricants rolled in a Master of Business Administration (MBA) pro- Marketing Dept. The company was new in the business gram, which helped me a lot to reach my goal. The MBA and I was lucky to be able to observe and get involved in program, coupled with my engineering degree and accu- every process from the very start. This helped me build a mulated experience, gave me a better understanding of strong background both in marketing and technical side not only LUKOIL Lubricants Middle East operations, but of operations. LUKOIL’s global business as well. At the end of 2008, the company that included a During office hours, I always stay in close contact blending and packaging plant in Izmir, was acquired with the Production and Sales Dept. I participate in im- by LUKOIL. I was given an opportunity to work for this plementing the programs linked to lubricants sales in highly reputed, global, expanding oil company, which the local market, trade conferences, exhibitions, fairs was continuously striving for further growth. LUKOIL and product launches. I am also managing our compa- has always regarded Turkey as a strategic market for in- ny’s BTL activities and cooperating with our units, which

16 PRO PROFILE develop marketing and brand strat- lation in plants in Russia, Austria, lubricants are beneficial to our tar- egies. The support and valuable ex- Romania, the United Arab Emirates get customers. perience of our colleagues in the and Turkey. In 2018, we have started to work Moscow head office help me imple- The priority in our 2018 market- on the implementation of the loy- ment their best practices and inno- ing strategy is to introduce a new alty program, which aims to attract vative solutions in the Turkish mar- product portfolio in the most effi- new customers in the PVL sector ket. It is nice to know that here they achieve results on a par with those in Russia. The people who work in our of- IN 2017, OUR SYNTHETIC MOTOR OIL SALES INCREASED fice are dynamic, young and moti- CONSIDERABLY OWING TO THE PROMOTION OF GENESIS. vated. This gives me an opportunity IT PROVED TO BE THE PRODUCT THE MARKET WAS WAITING FOR to stay on top of things all the time and allows me to catch the current trends. Currently, the biggest excite- cient way that would boost the re- and strengthen relations with our ment among our staff in the Sales tail sales of our products for pas- existing clients. We intend to be- and Marketing Dept. is caused by the senger cars. We are going to unveil come the “recommended brand” by launch of our new LUKOIL GENESIS the new labels and the new exterior putting together a team of GENESIS product line in the Turkish market. of the GENESIS oil can at the meet- opinion leaders who will support It provides an opportunity to en- ings with our regional distributors, the product and encourage custom- hance brand awareness and secure and explain these novelties at length. ers to use it. the status of a key player in today’s Jointly with our dealers, we will con- I’m 35 now, and my daily routine motor oil market. vey the message why these high tech never stays the same, it is always In 2017, our synthetic motor oil very active, rather dynamic, though sales increased considerably ow- sometimes challenging, too. My ing to the promotion of GENESIS. It family’s harmony is a huge source proved to be the product the market of inspiration for me both in the of- was waiting for. The oils from the fice and at home. In my spare time, GENESIS product line have a wide I enjoy the company of my husband scope of approvals issued by lead- and our two-year-old son. I’m try- ing car manufacturers, and perform ing to share my broad experience better than the competitors’ prod- with my child, and help him expand ucts in a number of ways. The best his horizons, so he can once become R&D solutions of LUKOIL’s Science a man with solid goals and be able to Dept. and one of the world’s lead- adapt easily to the constantly changing additive producers were the ing world. That is one more reason foundation of GENESIS’ develop- why I want to keep constantly im- ment. This lubricant series is pro- proving myself, and set an example duced according to the same formu- for him!

LUKOIL LUBRICANTS | March 2018 17 PRODUCT

60,000 KILOMETERS

Some of the most memorable ACROSS ENTIRE RUSSIA moments during the trip occurred when the journalists met with LUKOIL Lubricants Company’s re- WITH “PROFESSIONAL” gional dealers along the route. The representatives of four dealer firms in Yekaterinburg, Novosibirsk and Irkutsk offered a warm welcome AVANTGARDE PROFESSIONAL LE 10W‑40, A NEW MOTOR to the travelers and wished them OIL FOR COMMERCIAL VEHICLES WAS TESTED DURING to complete their journey safe- ly. There were difficulties, too: re- A UNIQUE 60,000-KILOMETER TRUCK RUN THROUGHOUT cord-breaking snowfalls in Russia’s RUSSIA

ate last year, LUKOIL an- The total length of the run nounced the launch of pro- matches a designated oil drain in- duction of AVANTGARDE terval. The run started in February. PROFESSIONAL LE 10W‑40, the The first 10,000 kilometers of the latest generation motor oil for route ran across federal highways Lcommercial vehicles. The journalists from the Gulf of Finland to the Sea with Russia’s popular Pyatoe kole- of Japan, linking St. Petersburg and so (The Fifth Wheel) car magazine Vladivostok. The remaining parts were able to test the new product on of the route lie behind the Urals, the road. Carrying a maximum load, on the roads of different quali- DAF XF 105.460 truck tractor with a ty and the areas that lack any roads PACCAR MX engine was part of a 40- at all. On its way to the Far East, ton refrigerator road train, which the Pyatoe koleso team visited two was about to cover 60,000 kilome- cities, Perm and Tyumen, where ters across Russia with Pyatoe koleso LUKOIL’s lubricants plants are lo- reporters on board. cated.

18 PRODUCT Northwest and the central part of the country were followed by severe cold spells in Siberia, while in some locations the roads were almost non-existent, but the breathtaking beauty of Russia’s nature made the reporters forget about any kind of trouble. The tests in different regions of Russia characterized by varied road and climate conditions pose a gen- uine challenge to the vehicle and its motor oil. Along the entire route oil samples will be regularly taken for testing, and sent to a leading independent laboratory. Earlier, AVANTGARDE PROFESSIONAL LE 10W‑40 oil had performed well during laboratory testing. The product protected the engine from wear 40 percent better than required by the ACEA E9 standard, exceeded by 46 percent the ACEA A6 requirements on engine parts cleanliness, and demonstrated stable viscosity/temperature properties that were two times better than required by API СJ‑4. This oil will now be tested under real conditions on Russian roads. Video reports, photos and impres- sions from the trip, as well as results of the run will be posted online at 5koleso.ru website.

PRODUCT OF TOMORROW

AVANTGARDE PROFESSIONAL LE 10W‑40 is Russia’s first Euro 6 compliant lubricant for commercial vehicles. The product meets the requirements of all four basic European specifica- tions (ACEA E4, E7, E6 and E9) for commercial vehicles, as well as the CJ‑4 U.S. standard. Its versatile performance properties are based on a uniquely bal- anced Low Emissions technology, which offers an optimum mix of a high base number and a low ash content.

LUKOIL LUBRICANTS | March 2018 19 CORPORATE AFFAIRS

SEA OF OPPORTUNITIES

THE MARINE LUBRICANTS BUSINESS LINE IS ONE OF LUKOIL LUBRICANTS COMPANY’S MOST DYNAMICALLY DEVELOPING BUSINESSES. VIKTOR ZHURAVSKY, CEO OF LUKOIL MARINE LUBRICANTS (LML), THE COMPANY WHICH RUNS DEVELOPMENT OF THIS BUSINESS LINE, SPEAKS ABOUT ITS GOALS AND PROSPECTS IN 2018

UKOIL LUBRICANTS | How satis- Since the launch of our opera- fied are you with LUKOIL Marine tions back in 2007, we have already Lubricants’ performance results captured 12 percent of the global ma- VIKTOR ZHURAVSKY, in 2017? rine lubricants market. Last year, the CEO OF LUKOIL MARINE L Company posted a 23-percent sales LUBRICANTS Viktor Zhuravsky | To be absolute- growth over 2016. ly satisfied with the results you In 2017, we signed major contracts achieved means to be self-compla- with new clients such as Seaspan, We need to admit, though, that cent, ready to quit pursuing new high which has its own fleet and manages further growth is becoming diffi- goals. I am convinced that there is al- ships of a number of other important cult. For some years now, our market ways room for improvement, and you players such as СOSCO, Yang Ming, segment has been under consider- can perform even better than you Hapag-Lloyd, K-Line, MOL, Maersk able pressure due to a decline in in- have. and MSC. ternational maritime shipping. This

20 CORPORATE AFFAIRS is the aftermath of the latest global economic crisis. Besides this, the im- pending changes of environmental rules substantially change the portfolio of in-demand products. Under these conditions, we have been able to remain successful thanks to our out-of-the-box solutions and unique R&D innovations.

LUKOIL LUBRICANTS | The iCOlube technology is a LUKOIL know-how in the market. What kind of impact does it make on the Company’s performance today?

V.Z. | It affects our business in the most profound way. iCOlube is a breakthrough not only for us as producers and suppliers, but for shipowners and, in the first place, THE USE OF LUKOIL’S ICOLUBE INTELLIGENT CYLINDER OIL LUBRICATION SYSTEM for engineering officers who oper- HELPS SHIPOWNERS REDUCE SPENDING ON LUBRICANTS, AS WELL AS SAVE ate ship engines. iCOlube funda- ON SPARE PARTS PURCHASES AND REPAIR COSTS mentally changes the seller-buy- er relationship, erasing the border between manufacturing and appli- old vessels with significant engine that lubricant producers will need to cation. Standard engine oil is sub- wear. In my opinion, as environmen- secure the approvals of ship engine ject to additional “fine-tuning” tal rules get tougher globally, demand manufacturers for the new lubri- right on a ship depending on oper- for these companies’ lubricants will cants that would be adapted to these ational conditions in real time. It is keep falling. demands. joint work toward a common goal, In order to be competitive over which — when reached — transforms the long term in this market, one LUKOIL LUBRICANTS | How is into long-term partnership ties and needs to be technologically compe- LUKOIL going to respond to the provides competitive advantages to tent. The total professional experi- challenges arising from new de- our company. ence of our staff tops 1,000 years, mands on marine lubes? The track record of more than and LML is part of a major, powerful two years of operation of first iCOl- company. We feel confident and re- V.Z. | Our first response was the ube units has demonstratively prov- spect our competitors. This is a com- well-known alkaline LUKOIL en the actual cost savings on repair plex, global business, and weak play- NAVIGO 100 MCL oil produced as and spare parts in addition to fuel ers can’t survive in it. far back as 2012. Last year, we ob- and oil economy.

LUKOIL LUBRICANTS | The competition in the marine lubricants market THE FUTURE BELONGS TO PREDICTABLE, RELIABLE, grows, and is spurred — among other LONG-TERM TIES BETWEEN MARINE COMPANIES things — by the appearance of new AND LUBRICANT SUPPLIERS players. How does LML feel in this kind of environment?

V.Z. | Indeed, in recent years some In 2020, new restrictions on sul- tained the key engine manufactur- new players have emerged in the fur content in marine fuel will go ers’ approvals for use of the new line market, including those without pre- into effect. These changes pave the of LUKOIL NAVIGO MCL EXTRA and vious experience in the lubricants way for a substantial remake of ma- ULTRA cylinder oils in engines that business. These players didn’t in- rine fuel and lubricants product run on low and ultra-low sulfur fu- vest in product testing, and prod- portfolios, so they can meet new de- els. However, iCOlube and our cyl- uct approvals. Their main targets are mands in the market. This means inder oils are compatible with any

LUKOIL LUBRICANTS | March 2018 21 type of marine fuel. This solution V.Z. | These engines have good pros- LUKOIL LUBRICANTS | What do will cover 100 percent of the ship- pects, their number is constantly ris- you expect in 2018? What goals owners’ needs after the new envi- ing in LNG carrier and tanker sectors, did LUKOIL set for LML in coming ronmental standards are introduced as well as in the power generation years? in 2020. sector. We are already delivering lu- We were among the first compa- bricants to such vessels in the most V.Z. | We prefer not to wait, and in- nies to adapt to new requirements different regions of the globe. tend to help the market move to- through development of in-demand The LUKOIL EFFORSE low-ash ward more economical, environ- products. This helps us, among other motor oil for dual fuel engines has mentally friendly, efficient ways of things, win tenders for maintenance proven to be very efficient in this vessel operation. This needs to be of newly-built ships. segment. LUKOIL delivers the same done so that we can stay compet- type of product to small power plants itive. The future belongs to pre- LUKOIL LUBRICANTS | What do you using gas reciprocating and diesel dictable, reliable, long-term ties think about potential use of dual fuel generators. Among LML clients there between marine companies and lu- engines that are able to run on both is a considerable number of compa- bricant suppliers. Our goal is to gas and diesel fuel? Does LUKOIL nies using LUKOIL EFFORSE oil in share this vision with a maximum have the products for this sector? onshore and floating power stations. number of shipowners.

LML MANAGING DIRECTOR NAMED WOMAN OF THE YEAR IN MARITIME SHIPPING INDUSTRY

Our colleague, LUKOIL Marine Lubricants managing director June Manoharan won ‘The Maritime Standard Woman in Shipping Award’ at the fourth annual Maritime Standard Awards. The awards ceremo- ny was held on Oct. 23, 2017, in Dubai in the presence of over 700 executives in the shipping industry from almost 70 different countries. “Twenty-six years ago, when I first joined the industry, I had no idea where this voyage would take me. To be honest, I certainly didn’t expect to be standing here to receive this recognition and I am deeply grateful to LUKOIL for trusting in me and making this possible. Yes, the journey has been long, unusual and often challenging. But I must admit, to a large extent I have enjoyed it, too. I have realized one important thing — there is nothing more powerful in life than self-belief and a can-do attitude. When we have these, the rest will integrate automati- cally,” said June Manoharan in her acceptance speech. She wrapped up her address with a message to other women in the industry, saying: “Believe in yourself, negotiate for yourself and own your success. If you don’t do it, nobody else will do it for you.”

22 CORPORATE AFFAIRS MARKETING

LUKOIL LUXE synthetic motor oils at a spare parts store, a petrol station or in LUKOIL’s online store at lukoil-shop.ru, is entitled to a cashback transfer to his or her cellphone, and is also granted an automatic entry in- to a multiple-prize lottery. The prizes include a sports tour with Denis Glushakov, Sportmaster store shopping-gift certificates, a free trip to Russia’s Formula 1 Grand Prix race, and a master class given by LUKOIL RACING TEAM pilot Alexei Dudukalo, Russia’s oval track racing ace. It is symbolic that LUKOIL’s current synthetic motor oil product line features a product — LUKOIL GENESIS VN 5W‑30 oil — used in LUKOIL RACING TEAM’s race car (Seat Leon TCR). Over the entire year, LUKOIL will be setting up GENESIS brand zones for fans at sports events and exhi- TURNING ON bitions, and stage different sorts of competitions there. Meanwhile, Spartak’s leading players will at- tend a series of LUKOIL promotional “SPORTS events, including an autograph-signing session during the Moscow International Automobile Salon held MODE” Aug. 29-Sept. 9.

IN THE YEAR WHEN RUSSIA HOSTS FIFA WORLD CUP SPORT HAS BECOME THE KEY TOPIC OF LUKOIL’S PROMOTIONAL LUBRICANTS SALES IN THE RETAIL SECTOR

partak football club captain, and Russian national team play- RUSSIA’S 11-TIME RACING Ser Denis Glushakov was picked CHAMPION ALEXEI DUDUKALO as the campaign’s ambassador. The WILL GIVE A MASTER CLASS charismatic leader of the “people’s ON THE SOCHI AUTODROM RACING club” took part in the shooting of CIRCUIT FOR ONE OF THE WINNERS promotional video clips and an ad- OF THE “TURN ON THE SPORTS vertising photo-shoot. His image MODE!” CAMPAIGN will grace the stickers slapped onto a special series of oil cans offered to buyers in retail outlets as part of the promotional campaign. In April-June, anyone who buys “football oil cans” filled with LUKOIL GENESIS and

LUKOIL LUBRICANTS | March 2018 FORUM AVANTGARDE SOLUTIONS FOR AGRICULTURAL ach year, the Company holds around 20 technical confer- COMPANIES Eences and seminars for car manufacturing and industrial customers, as well as lubricants dealers. In 2018, the opening event in that series was the 3rd All-Russian Agricultural Industry Conference held on Feb. 6–7 in Volgograd. The forum gath- ered executives and leading engi- neers representing 34 agricultural companies from different parts of Russia, including those operating throughout Russia such as Prodimex Group, Dominant, Cherkizovo Group, Agrosila Group and Gelio-Pax-Agro. The event’s organizer, LUKOIL Lubricants Company’s Dealer Network Sales Dept., gave a presenta- tion showcasing the opportunities for application of the latest LUKOIL lubricants in agricultural machinery. In keeping with the tradition, the event once again was a platform for con- structive dialogue between the rep- Pavel Kolomiets, head of a lengthy run life secures uninter- resentatives of agricultural firms and LUKOIL Lubricants Company’s rupted operation of combine har- the Company’s technical issues ex- Agricultural Lubricants Dept., said vesters at the peak of the harvesting perts. that the new semi-synthetic LUKOIL season, and helps maintain the high The delegates shared their expe- AVANTGARDE ULTRA M3 15W‑40 quality of harvested crop. Besides riences and discussed the problems motor oil for agricultural machin- motor oils the Company also demon- that agricultural companies are fac- ery generated a lot of interest the strated other lubricants for agricul- ing today. They also spoke about the visitors. The new product has a tural machinery such as the LUKOIL ways and means LUKOIL offers to 700–750-hour drain interval, which VERSO oil for tractors, LUKOIL solve those problems. The confer- was confirmed by a series of tests on GEYSER hydraulic oil and FLEX plas- ence participants were also briefed foreign machinery. The oil with such tic greases. on the advantages of different options of LUKOIL’s service program, which is extended to the agricultural sector as well. These options include “Insurance Liability”, “Fuel for Partners”, “Cooperation Expansion” and “Lubricants for Agricultural Machinery under Warranty”. The fin- ishing touch was the delegates’ visit to LUKOIL’s local lubricants plant and Russia’s largest greases-manufacturing site, INTESMO, a joint venture of LUKOIL and Russian Railways. It is the home to Russia’s only engineering center for development and testing of oils and greases for different branch- es of industry.

24 FORUM LUKOIL_Anz_A4_iCOlube_RZ_Layout 1 04.09.14 12:43 Seite 1

The iCOlube® Pioneering Technology

Tailors the base number to the prevailing engine load and fuel sulfur content.

LUKOIL Marine Lubricants DMCC Tel: +971 4 430 0769

LUKOIL@Lubricants | July 2017 [email protected] 25 www.lukoilmarine.com Approvals/ Meets requirements of:

• MB-Approval 228.5 • MAN M3277 • Volvo VDS-3 • Scania LDF-3 • Caterpillar ECF-2 • Cummins CES 20077/72 • Renault RLD-2, RXD • Ford WSS-M2C212-A1 • Deutz DQC IV-10, III-10 • MTU Category 3 • DAF Extended Drain • MACK EO-N, EO-M PLUS

API: CI-4, СF ACEA: E4/E7 SAE: 5W-30, 10W-40

SYNTHETIC MOTOR OIL LUKOIL AVANTGARDE PROFESSIONAL

Extended oil change interval

* Compared to ACEA E4 requirements ** Compared to ACEA E7 requirements *** Compared to ACEA E7 requirements