Lukoil's name joins three Siberian oil towns to one English word
The letters L, U and K in Lukoil stand for Langepas, Uray and Kogalym, three oil towns in western Siberia whose state producers merged in 1991. The founders tacked on the English word oil. It was a fitting blend for a company whose whole strategy was to copy Western oil majors.
The driving force was Vagit Alekperov, a Soviet deputy oil minister. Under the Soviet system, exploring for oil, refining it and selling fuel were run as separate worlds. Alekperov concluded that Russian firms could only compete abroad by combining all three under one roof, as Western giants did. A government decree in November 1991 created the company from the three producers plus a processing plant and refineries, and in 1993 it became a private joint-stock company.
It kept being first. In 1994 it was the first company to list shares on Russia's new trading system, and in 1995 it filed to issue depositary receipts in the West, giving American investors their first chance to buy into a Russian company. In 2000 it bought the fuel distribution business of Getty Oil, gaining a network of US filling stations. ConocoPhillips later built up a 20 percent stake, before selling out by early 2011.
At its height it ranked among the world's largest crude producers, pumping about 1.639 million barrels a day in 2019, and was Russia's biggest non-state company by revenue. A flagship foreign project was Iraq's West Qurna-2 field, where it held 75 percent and produced about 480,000 barrels a day, around nine percent of Iraq's output. As of 2011 it counted 17.255 billion barrels of oil equivalent in proven reserves.
Its international reach has since shrunk sharply. Operations in more than 30 countries in 2021 fell to 14 by 2025. After Western sanctions hit Russian oil firms, a 22 billion dollar bid by the trader Gunvor for its foreign assets was abandoned when the US Treasury said it would block it, and Lukoil declared force majeure at West Qurna-2.
Source: Lukoil
