Wednesday

26th Sep 2018

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Global innovation for efficiency and quality in oil production

  • In an increasingly globalised marketplace, market leaders must constantly adapt to increase capacity (Photo: EUobserver)

European Commission Vice President Maros Šefčovič recently spoke of the need to support research and innovation in energy. 'Efficiency first' is the motto of the new Energy Union, but what forms will this new efficiency take and what measures will have to be taken to achieve this increased efficiency?

Global energy company LUKOIL, a privately owned, publicly-traded company with operations in over 40 countries on five continents, has been at the fore in the past two decades in the drive for increased efficiency in terms of production, processing and transport of oil and petrochemicals.

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In a global oil market that is highly developed and highly liberalised, LUKOIL's success to date is built on its track record of developing and adopting new technologies for oil extraction, and increasingly in recent years, renewable technology.

The company has focused on best global practice in all elements of the business, from human resources and safety management of workers in extreme environments, to its ongoing efforts to fully remediate the aftermath of environmental damage and reduce greenhouse gas emissions.

Encouraging the development of new generation energy production technologies has given the company an edge on the global market and the employment of gold standard production and employment standards has reaped rewards in terms of the company performance and international business reputation.

Sales up

Recently released financial results for 2014 show sales up by 1.9%, stable operating expenses, low debt levels and an increase of an impressive 5.1% in total hydrocarbon production available for sale, bringing the volume up to $2.3 billion barrels of oil equivalent (BOE) per day.

In 2012 alone, the company spent €157 million on research and development, with the focus centred on improvement of oil recovery rates, the development of nanotechnologies for the oil and gas industries and techniques for refining associated petroleum gas (APG) into liquid hydrocarbons.

Incremental improvements have been made in assessment methods for hydrocarbon reserves and technology to optimise the recovery of oil in new deposits. In the past two decades, the company has invested heavily in its refinery business, with 40% of the investments spent on its European assets.

LUKOIL has also developed a dedicated science and technology unit for the production of lubricants and additives and that is expected to result in significant advances in the global lubricant market. Between 2011 and 2012 the company and subsidiaries developed 39 new products, including marine oils. In fact, LUKOIL's marine oils are now produced in 17 countries and supply vessels in 521 ports in 54 countries.

European standards

An improvement in motor fuel quality is also a priority for LUKOIL. By 1 January 2016 all of the motor fuel produced by LUKOIL will comply with the highest European standards, once again the outcome of significant investment.

The benefits of this will not only be felt by the company's 100,000 shareholders: users of LUKOIL products across the globe will have health benefits from the reduced sulphur content.

Increasing efficiencies across all facets of this global enterprise is at the centre of what LUKOIL is and does. The company motto 'Always moving forward' is embedded in each sector of production, processing, refining and transport.

LUKOIL operates almost 6,000 filling stations across the northern hemisphere and it is currently expanding both its filling station business and upstream elements such as refineries and petrochemicals businesses in Africa, Latin America and the Middle East.

In an increasingly globalised marketplace, market leaders must constantly adapt to increase capacity, enhance production percentages and volumes, while at the same time protecting workers, promoting their welfare, working with local communities and ensuring that best environmental standards are achieved and maintained.

Disclaimer: This article is sponsored by a third party. All opinions in this article reflect the views of the author and not of EUobserver.

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