LUKOIL sells the bulk of petroleum products in the retail market via its well-diversified distribution network of 5.3 thousand filling stations and 129 oil depots in 18 countries. To boost sales via filling stations, the Company runs a customer loyalty program with its fuel cards and retail loyalty cards provided via the LICARD corporate payment system.
|Retail network (end of year)||5867||5782||5556||5309||5258|
|Average fuel sales per filling station, t/day||9.2||9.5||9.5||9.9||10.1|
Europe, near-abroad countries and USA
LUKOIL actively promotes sales of branded fuels with improved efficiency and environmental performance under the ECTO brand. Sales of the premium ECTO 100 motor gasoline were launched in 2017. The Company's retail network of filling stations has fully replaced ECTO Sport (Euro-5 AI-98) with the new improved, higher performance ECTO fuel. The launch of ECTO 100 increased consumer demand.
ECTO branded fuels sales volumes, th. tons
|ECTO diesel fuel||2180||2395||2601||2667||2889|
|Outside of Russia||629||761||1000||1114||1219|
|ECTO diesel fuel||522||593||773||837||935|
Product mix optimization, continuous marketing efforts, development of value added services, implementation of best retail practices, focus on customer service excellence, and upgrades of filling stations help the Company boost its revenues from non-fuel sales:
prioritizing growth in sales of coffee and fast food products, the highest margin and most popular products sold at filling stations
establishing partnerships with suppliers, and negotiating better terms with suppliers of non-fuel goods
inventory optimization and reducing slow moving inventories of non-fuel goods
improving customer service quality at filling stations
development and rollout of loyalty programs.
The Group's strategic goal is to improve coverage of operating costs at filling stations by gross profits from non-fuel goods and services.
BUNKERING and AIRCRAFT REFUELING
LUKOIL is one of the largest suppliers of bunker fuels, with bunkering operations covering 18 ports in six Russian regions. LUKOIL carries out its overseas operations in Bulgarian and Romanian ports. LUKOIL's bunkering fleet in Russia consists of 18 tankers with a total dead weight of 48,000 tonnes and operates mainly in the ports on the Baltic Sea, the Barents Sea, and the Black Sea, and on inland waterways.
LUKOIL sells both own and purchased jet fuel, mostly into-plane fuel, at airports in Russia, Bulgaria, and Turkey, through its own sales network or third-party refueling companies.
LUKOIL's long-standing consumers of jet fuel include major Russian and international airlines, and civil aviation companies. The Group's aircraft refueling network covers 32 Russian airports. LUKOIL operates nine own refueling facilities, with another six operated by joint ventures.
|Bunkering fuel sales volume, th. t||2325||2501||2459||3347||4539|
|Aircraft fuel sales volume, th. t||3211||3407||2875||2747||3238|
|including retail sales volume (into-plane), th. t||1462||1543||1744||1765||1868|
PRODUCTION AND MARKETING OF LUBRICANTS
LUKOIL Group produces lubricants at seven own sites, two joint ventures, and 25 contracted plants. Russian assets comprise full cycle production facilities at Perm and Volgograd Refineries, a lubricant blending plant in Tyumen, and INTESMO joint venture producing lubricants in Volgograd. LUKOIL’s overseas production assets include own plants in Romania, Finland, Turkey, and Austria, as well as LLK-NAFTAN in Belarus, a joint venture producing additives.
Located at the site of Volgograd Refinery
Designed to produce up to 30,000 tons of lubricants per year
Product mix consists of lubricants for the key manufacturing sectors and transport companies as well as for retail consumers
The largest Russian lubricant producer INTESMO was launched in 2014. The plant houses an engineering center, unique in Russia, where lubricants are developed and tested. For three years of operation, the center adopted 200 testing methods of plastic lubricants and oils, developed and launched the production of 115 types of lubricants, many of which outperform foreign counterparts by operational characteristics.