ABOUT CORPORATE CLIMATE SAFETY ENVIRONMENTAL OUR SOCIETY THE COMPANY GOVERNANCE CHANGE PROTECTION EMPLOYEES ENVIRONMENTAL SAFETY PROGRAM According to LUKOIL’s Health, Safety In addition, the Company continued and Environment Policy, environmental to enhance data preparation methods protection is one of the Company’s in line with the GRI Standards, priorities. The integrated management and disclosures are being expanded THE ENVIRONMENTAL system and the actions taken to better inform stakeholders. SAFETY PROGRAM in 2019 to improve the environment 1 are described in detail in the Safety For the first time, this Report includes FOR 2019–2021 section (see page 72). disclosures on the environmental impacts CONSISTS OF of the refinery in Italy (ISAB S.r.l.) and oil To enhance our environmental product supply entities abroad (IOOO protection management system, LUKOIL Belorussia and LUKOIL-BULGARIA 10 SUBPROGRAMS LUKOIL systematized biodiversity EOOD). As before, the disclosures AND INCLUDES OVER conservation initiatives in 2019 as part on the refineries LUKOIL Neftochim Burgas of the expansion of our activities AD (Bulgaria) and PETROTEL-LUKOIL S.A in this area. Criteria and approaches (Romania), as well as the Uzbek 900 were developed to make our activities production project LUKOIL Uzbekistan EVENTS, more systematic and to obtain more Operating Company LLC, data on which 2 measurable results. are disclosed from 2018, are included. 45 RUSSIAN AND FOREIGN ENTITIES OF LUKOIL GROUP PARTICIPATE IN THE PROGRAM. In 2019 PJSC LUKOIL was rated in the top five in the environmental transparency rating of Eurasian oil and gas companies. The rated companies’ potential impact on the environment and their information transparency were assessed by the World Wildlife Fund (WWF) Most of the budget of the 2019 Russia and CREON Group. In total, the rating included 20 companies Environmental Safety Program from Russia (producing more than 1.5 million tonnes of oil and gas (RUB 35.9 billion) was spent on measures condensate), 14 companies from Kazakhstan and 2 from Azerbaijan. to increase the sustainable use of associated petroleum gas (around 40% of the costs of the Program) and the reliability of pipeline transport. 1 Planning of activities under the target program is synchronized with corporate medium-term planning procedures. The program is developed for three years and is annually reviewed. During the previous reporting period, the target program for 2018–2020 was in effect. 2 The Environmental Safety Program for 2018–2020 involved 53 LUKOIL Group entities. As a result of some organizational changes (consolidation of a number of entities in the Russian Oil Product Supply business sector and transfer of responsibility for the Transportation business sector to LUKOIL-Trans), the number of entities participating in the Program decreased, but the number of production facilities did not change as compared to 2018. 103 WWW.LUKOIL.COM Non-standard payments1 in the reporting fine of RUB 68.9 million was paid for the Komi Republic against LUKOIL- year accounted for 4% of total penalties under a lawsuit filed by the Department Komi for environmental damages. based on negative environmental of the Federal Service for Supervision impacts. In 2019, a significant of Natural Resources Management LLC LUKOIL-Komi’s operating In 2016, a plan of organizational due to the lack of in situ treatment division Yareganeft is developing and technical measures technology . A proposal from Tomsk the Yaregskoye field, one of the oldest for rehabilitation of the disturbed State University on how to solve sources of high-viscosity oil in Russia. territories and water bodies was this issue was received in 2019 In April 2016, the Yarega River drafted, and the Company started and is currently being considered. and the Maly Voyvozh stream near to implement it immediately, before Depending on the results, a decision the Yarega settlement, Ukhta District, the final decision on the case was will be taken on the feasibility were heavily polluted with oil products, made. In 2016–2019, LUKOIL-Komi of this technology. following an oil spill from old wells. carried out cleaning and remediation The Department of the Federal of the nearshore zone of the Yarega The measures taken by LUKOIL-Komi Service for Supervision of Natural River and streams flowing into to mitigate the impacts of Yareganeft’s Resources Management for the Komi it, with a total area of 20 km. Sediment activities on water bodies include Republic brought a lawsuit against was cleaned in the area of the crossing construction of new treatment LLC LUKOIL-Komi for damage caused of the stream at the “Yareganeft” facilities. Construction started to the environment. After litigation production site, from the crossing in 2016 and was completed in 2019. lasting over two years, the Arbitration to the mouth of the Maly Voyvozh In 2019, the facilities also underwent Court of the Republic of Komi ruled stream, and at the section of the Yarega pre-commissioning and essential on 8 April 2019 to satisfy the claimant’s River to the inflow into the Izhma River. retrofitting. Commissioning claims, ordering LUKOIL-Komi The cost of the work performed was is scheduled for 2020. to pay RUB 68.9 million in damages taken into account when determining to the Department of the Federal the amount of damage in the litigation. Service for Supervision of Natural Resources Management of the Komi At the same time, the cleaning Republic. of bottom sediments was complicated 1 Non-standard payments, inter alia, may arise due to delays in obtaining permit documents. 104 ABOUT CORPORATE CLIMATE SAFETY ENVIRONMENTAL OUR SOCIETY THE COMPANY GOVERNANCE CHANGE PROTECTION EMPLOYEES Indicators of LUKOIL Group’s Environmental Safety Program 2018 2019 GOALS FOR 2021 UTILIZATION LEVEL OF ASSOCIATED PETROLEUM GAS, % 0.2 pp A further rise 97.4 97.6 in the indicator’s value Across LUKOIL Group POLLUTANT EMISSIONS INTO THE ATMOSPHERE, THOUSAND TONNES A 5% decline 451.3 Across LUKOIL Group 428.7 at Russian entities 7.2% compared to 2018 Across Russian 433.3 entities 402.3 WASTEWATER DISCHARGED INTO SURFACE WATER OBJECTS, MILLION CUBIC METERS 1 Across Russian 0.9 entities 10.7 A further reduction 10.1 is the share of in the indicator’s value LUKOIL-Ukhtaneftepererabotka, an 8% drop at oil and gas production entities and a 9% drop at transportation entities WATER CONSUMPTION FOR OWN NEEDS, MLN CUBIC METERS 1% A reduction in the indicator’s value Across Russian 354.9 entities 358.0 DISPOSAL OF WASTE ACCUMULATED DURING THE PRE-PRIVATIZATION PERIOD, THOUSAND TONNES To reduce waste by 250 thousand 107.0 Across LUKOIL Group 69.0 tonnes across Across Russian the entire Group 50.0 entities 51.0 in 2019–2021 REHABILITATION OF CONTAMINATED LAND, HECTARES About 40 hectares Across Russian per annum 50.3 entities 56.6 MINIMIZING THE IMPACTS OF OPERATIONS OF LUKOIL GROUP ENTITIES Confirmation based ON THE BIODIVERSITY OF VULNERABLE TERRITORIES, INCLUDING on in-production THE RUSSIAN ARCTIC ZONE environmental controls and monitoring Providing in-production Across Providing in-production of environmental environmental controls LUKOIL Group environmental controls and monitoring and monitoring components to check of environmental of environmental components that the Company’s components activities have no Identifying indicative animal impact on biodiversity; species for the Biodiversity improvement Conservation Program of management mechanisms Note. Data for LUKOIL Group for 2018 1 The indicator growth for LUKOIL Group is solely due to the classification of LUKOIL- are presented in accordance with 2018 reporting Ukhtaneftepererabotka wastewater in 2019 as insufficiently treated as the discharge rates had boundaries, and for 2019 – in accordance with 2019 been aligned with the concentration levels for top-class fishery water bodies. reporting boundaries. 105.