Waste Subprogram

G4-EN23 GC8 CPI 2.8

Management approaches DMA

Most production waste is generated during well drilling and operations. The main waste types are drilling wastewater, drilling cuttings, used muds and oily sludges.

The key measures to minimize the negative impact of waste include:

Reducing waste generation
by ensuring a more efficient consumption of the raw resources and materials
Using waste
to produce energy or in other industries (e.g. construction)
Waste neutralization
using the Company’s own resources and expanding the scope of waste neutralization operations
Taking waste
to custom-built landfills
Disposing Hereafter, in the “Waste” section, the term “disposal” is used in the sense of “utilization, neutralization, transfer to dedicated agencies for processing or disposal”. waste
of previously accumulated waste (pre-privatization)
Waste types and waste handling in Russia at year-end 2016 GRI G4 OG7
Activities Waste types Waste generation assessment, % Hazard class Waste handling technique
Crude and natural gas sales Drilling waste 70 IV and V Previously, waste was buried inside sludge pits. It is currently processed by dedicated contractors.When sludge pits are decommissioned, technical and biological reclamation of the lands on which they were placed is carried out
Rocky material produced during underground mining 20 V LUKOIL is the only company in Russia to develop its oil fields using mining methods (in the Komi Republic). Rock brought to the surface is piled up in waste heaps and is not subject to disposal or neutralization
Oil-contaminated waste 5–7 III Oil-contaminated waste – oil-contaminated soil and sludges from tank and pipeline purging operations. LUKOIL uses tried and tested disposal (microbiological destruction) and neutralization (thermal treatment) techniques
Oil and gas processing Oil-contaminated waste About 30 III Oil-contaminated waste – sludges from tank and pipeline purging operations, oil/petroleum products entrapped in process water, etc. Disposal methods: slop oil is fed back into the process, and sludges are neutralized at dedicated processing facilities
Silts from biological treatment facilities About 20 IV Water used for production and residential purposes is treated to remove organic compounds. Excessive biosilt is regularly removed from treatment facilities, dried up, and may be used in other operations (as a fertilizer)
Production and distribution of electric power, gas, and water Sludges produced during the chemical treatment of water 80 V Landfilling

To reduce the adverse exposure to drilling waste, in its operations, the Company relies on environmentally safe mud components. On susceptible natural territories or in locations where the integrity of sludge reservoirs may be disrupted, it uses sumpless drilling (with purification and recurrent use of the liquid waste phase).

In 2016, Russian LUKOIL Group entities exceeded their performance targets, i.e. waste that was used, neutralized, transferred for disposal/neutralization to dedicated contractors, or buried (including drilling waste accumulating in Western Siberia over 2014–2015) exceeded the waste that was generated.

The Company continues to dispose of waste accumulated in the pre-privatization period. In 2015 –2016, the Company succeeded in reducing its total waste by almost 122,000 tons, with OOO LUKOIL-Volgogradneftepererabotka being the main contributor to this trend. As of January 1, 2017, 346,000 tons of pre-privatization oil-contaminated waste is still being held at the Group’s facilities in Russia.

Generation of 1st–5th hazard class waste and handling of waste in Russia, Volumes of accumulated and recovered wastes, as well as volumes of wastes in place as of the end of the year, do not include data on waste for Arkhangelskgeoldobycha thousand tons
G4-EN23 GC8 CPI 2.8
Indicator 2014 2015 2016
(a) Waste generation 1,437.0 1,015.7 1,032.9
(b) Quantities of waste that was used, neutralized, and submitted for disposal/neutralization to dedicated agencies, or buried 1,456.0 956.5 1,115.1
Ratio of (b) and (a) 1.01 0.94 1.08
Waste at year-end 845.8 911.9 765.1

Remediation of land

The 2016 progress in the remediation of land disturbed as a result of construction of oil and field facilities was considerably ahead of the timeframe set out in the Environmental Safety Program. In 2015–2016, a total of 11,937,000 hectares of disturbed land was subjected to remediation with resoiling, and turned over to its owners. A great deal of land was remediated in KMAA-Yugra (AO RITEK being the user of such land). The increase in the scope of work is related to expected changes in regional legislation (more stringent regulations on land reclamation and recovery).

At the same time, a downsizing of drilling operations lead to a curtailment of sludge pit decommissioning plans.

Remediation of disturbed and oil-contaminated land in Russia
Indicator 2014 2015 2016
Area of remediated land, ha 3,026 3,528 The indicator includes remediation of disturbed and contaminated lands across Oil and Gas Production in Russia (3,478 hectares) and 50 hectares of contaminated land subject to remediation works requested by the Kam-barskaya Bulk Plant (OOO LUKOIL-Trans). 8,409
including oil-contaminated land, ha 151 166 97
Decommissioning of sludge pits by own efforts, pits 136 195 200
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