History and vision of Lukoil The history of the company LUKOIL Today

History and vision of Lukoil
The history of the company LUKOIL

Today, the Russian oil company LUKOIL is in the top of the world in terms of oil reserves and production. The name of the modern concern comes from Langepas UrayKogalymneft. To make the name of the company more attractive, the first letters of the oil-producing cities were combined, and the word oil was replaced with the English equivalent oil.
LUKOIL is one of the largest publicly traded, vertically integrated oil and gas companies in the world accounting for more than 2% of the world’s oil production and around 1% of the proved hydrocarbon reserves.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

Each day they improve the quality of life for millions of consumers in over 100 countries around the globe through the supply of our products, power, and heat. They employ over 100,000 people who join their efforts and expertise to ensure the Company’s efficient development and secure its market leadership.
The company actively participates in the development of deposits not only in the territory of the Russian Federation, but also in other countries. At various times LUKOIL carried out projects in Kazakhstan, Iran, Ukraine, the USA, Azerbaijan, Azerbaijan, Gaza, Egypt, Colombia and some other states.

In addition to the extraction of hydrocarbons, the company also deals with their processing and transportation. The corporation owns a tanker fleet with a total carrying capacity of over a million tons. LUKOIL headquarters is in Moscow on Sretensky Boulevard and in East Meadow (a suburb of New York). The of boss Lukoil is Vagit Alekperov, who owns over 20% of the company’s shares. In its activities, the Company is guided by the principles of sustainable development and tries to achieve a balance between socio-economic and natural-environmental development. The concept of sustainable development of the Company includes:
1. Increased attention to the environmental consequences of the main activity, reducing negative impacts on the environment and climate.
2. Introduction of technological, managerial and scientific innovations in business processes.
3. Search for solutions and technological processes that contribute to the achievement of the task of energy and resource conservation.
4. Search for alternative types of energy.
5. Release of environmentally friendly products.

LUKOIL shares the principles of the UN Global Compact and the Social Charter of Russian Business, which is reflected in the Company’s activities to promote sustainable economic growth and increase social responsibility.

When drawing up and approving plans, budgets and investment programs, the Board of Directors considers the need to achieve the goals contained in the Environmental Safety Program of LUKOIL Group organizations, as well as in the Policy and Functional Strategy for Personnel Management and Charity and Sponsorship Programs. Control of solving strategic tasks is carried out at a strategic and operational level.

Stakeholder Engagement

Interaction with stakeholders is one of the components in the system of organization of business processes.
The main groups of stakeholders are defined in several the Company’s regulatory documents, including:
1. Code of Business Ethics of PJSC LUKOIL.
2. Social Code of PJSC LUKOIL.
3. The policy of PJSC “LUKOIL” in the field of industrial safety, labor protection and the environment in the 21st century.
4. Personnel Management Policy of PJSC LUKOIL.

The process of interaction with stakeholders is carried out at all levels of the Company’s management; a wide arsenal of mechanisms and forms of cooperation is used, corresponding to the nature of the issues and the scale of the tasks to be solved that are around mutual interests.

Lukoil SWOT analysis
Strengths
One of the world’s driving vertically integrated oil and gas companies. Representing a generous piece of worldwide yield of crude oil. Leader on Russian and global markets in its core business. Throughout the years Lukoil has put resources into building a solid brand portfolio. The SWOT investigation of Lukoil just underlines this reality. This brand portfolio can be valuable if the association needs to venture into new products.
The company operates in more than forty countries globally which allows for a very strong distribution and supplier network, meaning they suffer very little from supply bottleneck. network. It also has dedicated dealers that actively promote the product and draw in customers by explaining how they can extract the maximum benefit from the product.
Lukoil employs more than a hundred a fifty thousand people. These consist of a highly skilled workforce through effective training and learning programs. Lukoil is putting immense assets in the training and advancement of its employees bringing about a workforce that isn’t just exceptionally skilled but also additionally motivated to accomplish more.
Innovation and the utilization of new advances are among the fundamental qualities. They have quite a track record of developing and advancing new products and they are moderately successful at execution of new ventures and created great profits for capital use by building new income streams. One of their advancements was automation which allowed them to scale up and downsize dependent on the interest conditions in the market.

Weaknesses
Substantial reliance upon Transneft’s pipeline system.
Lukoil cannot export gas which it produces, since Gazprom has an imposing monopoly on gas trades and claims the gas transport system.
Interest in Research and Development is underneath the quickest developing players in the business. Even though Lukoil is spending over the business normal on Research and Development, it has not been able to contend with the main players in the industry as far as innovation. It has appeared to be a mature firm anticipating bringing forward products depending on tested features in the market.
Compared to other companies, Lukoil has to spend quite a bit more on the training of their workers as they have a high attrition rate.

Opportunities for Lukoil
New clients from online channel – Over the previous couple of years the organization has put huge aggregate of cash into the online platform allowing for new opportunities. In the following couple of years, the organization can use this opportunity by realizing its client better, serving their necessities and gather data for later use.

New patterns in the buyer conduct can open new market for the Lukoil. It gives an incredible chance to the association to manufacture new income streams and differentiate into new item classes as well.
Stable income provides opportunities to put resources into adjoining item sections. With more cash in bank the organization can put resources into new innovations and in new items categories.
New environmental policies – Lukoil can use this opportunity as they already have an advantage in innovation and they can use this to gain significant shares in the new product markets. They already have a partnership to develop clean energy sources and are developing a gas power plant.

Association’s center capabilities can be an advantage in comparative different items field. For example – GE healthcare research helped it in developing netter Oil drilling machines.

Threats
The American economy is being driven more and more towards isolationism, other governments could follow suit, and this could affect international sales. As an international oil company, Lukoil must abide by the various liability laws and product standards in the different countries, but they may still be subject to liability claims and lawsuits due to change in policies.
Low income market’s preference of imitation, lower quality product, fluctuations in crude oil and gas prices and the intense competition as well as the increased number of players in the industry puts pressure on the company. As a result, it has affect not only the profitability but also overall sales.
An oil company faces significant environmental risks and stringent prerequisites on Carbon Dioxide emissions. Industrial accidents could have a significant negative impact on financial indicators.
Demand for products like gas is seasonal and dependent on weather conditions and any misjudgment during peak season could greatly affect profit.
Strategies to get to goals
In today`s high technology world, all spheres of humans being are highly integrated with using the oil and gas. The demand for these fossil sources is increasing day by day due to the fact that each industry from cars to aeroplanes using it. Developing countries are relying even more because the electricity production is not advanced forcing them to use gas. It is predicted that oil industry will expand and be the most important source in the economics. There are so many companies whose earnings reach billions of dollars. This shows that the oil is the main locomotive of the world`s economy. The number of oil companies is increasing dramatically. However, there are the ones which are in this field more than a decade. One of them is Lukoil company which is in Russia. However, being in this business more than ten years does not mean that they can stop developing.
Lukoil mainly set themselves a goal to put financial stability and balance future long term investments and current shareholders incomes. What it means is to give back what they promised to current investors and find new ones along the way. This will increase profits of the company and will help them develop in new aspects. They more prone to long term objectives with consideration of expected profits, risks and opportunities.
One of the strategies to get to the goals which Lukoil set they keep adjusting to new technologies. Increasing efficiency of oil mining which is more profitable, especially for hard-to-recover reserves. Apart from that adjusting old mining spots are also one of the ways to get more profit out.
Another strategy would be finding new resource bases of their operational area. Since a company deals mainly with a raw resource which is mined out of earth it is not a secret that finding new spots will increase amount of oil produced. Even thou Lukoil mainly operates in Russia they still work in other countries to find new resource base. Right now, focus is on Norway, Iraq and Mexico. This gives an opportunity to create new contracts with companies which use oil to produce goods. Creating new projects such as new gas proceeding complexes stimulates growth of the company as well which helps them put themselves in more stable position in their field of activity.