On February 16, 2018, Lukoil announced the results of the company’s oil and gas reserves assessment done as part of an independent audit. According to the SEC (U.S. Securities and Exchange Commission) standards, the company’s proved hydrocarbon reserves as of December 31, 2017 totaled 16.0 billion barrels of oil equivalent, 75 percent of which were oil reserves. The company’s proved reserves life is 19 years.

In 2017, Lukoil added 501 million barrels of oil equivalent to its proven reserves as a result of geological exploration and related discoveries, as well as development drilling. West Siberia, the company’s main producing region, accounted for the largest reserves increase, contributing a total of 198 million barrels of oil equivalent. The company’s further development of Russian offshore fields in the Caspian Sea paved the way another significant addition of 100 million barrels of oil equivalent, with 95 million barrels coming from the Vladimir Filanovsky field launched in 2016. As a result of gas projects development in Uzbekistan and at the Bolshekhetskaya depression in Russia, the share of proven developed gas reserves increased from 36 percent to 47 percent.

As the average crude oil price grew by more than 30 percent in 2017, the company’s international projects developed under production sharing agreements and service contracts showed a decline in reserves. For instance, Lukoil’s reserves at the West Qurna-2 field went down by 153 million barrels of oil equivalent.

Lukoil also completed a 3C contingent reserves assessment under PRMS (Petroleum Resources Management System) standards. As of December 31, 2017, the company’s contingent resources amounted to 13.7 billion barrels of oil equivalent. Contingent oil and gas resources can be reclassified into reserves as the macroeconomic conditions improve, as field commissioning dates approach, as new technologies are introduced, or following the completion of pilot operations.

The independent audit of the company’s proved reserves was performed by Miller and Lents U.S. consulting firm based on the commercial life-of-field approach.