COMPANY PUTS FOCUS ON TECHNOLOGY LEADERSHIP

COMPANY PUTS FOCUS ON TECHNOLOGY LEADERSHIP

RUSSIA’S BEST EXPORTER LUKOIL’S International Success Helps Company Win RAF Award

OUR PRODUCTS MAKE RUSSIA’S 100 BEST GOODS LIST INTESMO Greases Win All-Russian Contest

RECORD-BEATING RUN ACROSS ANTARCTIC LUKOIL Lubes and Greases Withstood Test on Ice Continent

SEVERSTAL AUDIT IS A SUCCESS! We Enhance Cooperation with Industrial Giant

A LUKOIL Lubricants Company PublicationJune 2019

The iCOlube®

Pioneering Technology

LUKOIL Marine Lubricants DMCC

Tel: +971 4 430 0769

[email protected]

www.lukoilmarine.com

Tailors the base number to the prevailing engine load and fuel sulfur content.

LUKOIL_Anz_A4_iCOlube_RZ_Layout 1 04.09.14 12:43 Seite 1

CO N T E N T S

RESULTS YEAR OF INNOVATIONS

NEWSRUSSIA’S BEST CAR COMPONENTS EXPORTER

SEVERSTAL AUDIT ENDORSES LUKOIL LUBES

INTESMO GREASES МАКЕ TOP-100 BEST RUSSIAN PRODUCTS LIST

PRO PROFILEIMPOSSIBLE IS DEFINITELY POSSIBLE

PRODUCTRUSSIA’S SNOWBIKE CHAMP IS FIRST TO TEST LUKOIL SNOW 2T

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17 OREGON-BRANDED OIL FOR SAW CHAIN INVENTOR

TESTINGNEW PROFESSIONAL COVERS 60,000 KILOMETERS

EXTREMENEW TRAILBLAZERS ON THE ICE CONTINENT

NEWSOUR ENGINE OILS AVAILABLE ON EBAY

DIGITAL TRANSFORMATION

INNOVATIONSBITUMEN INNOVATIONS FOR RUSSIAN ROADS AT RIF 2019

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LUKOIL LUBRICANTS, June 2019 LUKOIL LUBRICANTS is a LUKOIL Lubricants Company publication

Publisher: RPIAddress: LUKOIL Lubricants Company, 6 Malaya Yakimanka, Moscow 119180

Phone: +7 495 980 3912 e-mail: [email protected] run: 200

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YEAR OF INNOVATIONS

EARLY LAST YEAR, LUKOIL LUBRICANTS COMPANY PUT A FOCUS ON DEVELOPMENT OF ITS R&D POTENTIAL, CREATION OF HIGH TECH PRODUCTS AND DIGITAL TECHNOLOGY. SINCE THEN IT HAS ACHIEVED SIGNIFICANT SUCCESS IN THESE AREAS BOTH IN TERMS OF LUBRICANTS AND BITUMEN

COMPANY PUTS FOCUS ON TECHNOLOGY LEADERSHIP

RESULTS / LUKOIL LUBRICANTS / JUNE 2019

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PORTFOLIO

In 2018, the company developed over 60 new products including synthetic engine oils for cars pro-duced by Japanese and Korean man-ufacturers, a product line of premi-um synthetic fluids for advanced automatic gear boxes, industrial oils, metalworking fluids and special-ty products. It also managed to sig-nificantly renew the technical fluids product line. The company launched a full-scale cooperation program with the world’s leading car manufacturers and industrial equipment producers. Currently, more than 20 promising products are being developed un-der the program, and over a half of these projects are carried out in co-operation with the TOP-10 car pro-ducers. Notably, LUKOIL has com-pleted development of a series of new engine oils with 0W-12, 0W-16 and 0W-20 viscosity grades for a major car manufacturer, with deliv-eries planned all over the world.The new generation developments that hold a lot of promise include lu-bricants for hybrid cars and electric vehicles. LUKOIL has manufactured a fluid for the first fill of electric cars, which exceeds the specification re-quirements as per key performance indicators (such as electric and heat conveying properties, as well as ox-idation and tribological tests). The demand for these solutions could be high in 2020-2025 when the leading global OEMs produce new types of these vehicles. Today, the company owns an R&D center in Moscow and seven labo-ratories in Russia and abroad with over 70 employees. LUKOIL lubri-cants are currently being tested at independent labs in Europe and the United States. The company attaches the same importance to development of the R&D potential and the product portfolio in the bi-tuminous materials sector. At the end of last year, the new R&D cen-ter in Nizhny Novgorod began op-erations. It will be a testing ground for promising bituminous materials. Its lab is equipped with the latest equipment for bitumen testing, in-cluding the Superpave road design system. The center, which is the largest of its kind in Russia, em-ploys highly qualified experts who have developed over 40 items of bituminous materials, good quality

plain bitumen and polymer modi-fied binders.

SERVICE

Last year, besides innovative prod-ucts, the Company also began of-fering a number of high tech ser-vice solutions. These include, for instance, the online tank moni-toring services. Earlier, this type of service was available exclu-sively in Europe, and last year our Company broke ground by offering similar practice in Russia. One of the first customers was Palfinger, a key international manufacturer of lifting equipment, which began us-ing the service at its Russian plant.

The Volgograd-based center for ship-ping lubricants and bitumen is an-other breakthrough solution. The facility boasts an automatic custom-er authorization system and an elec-tronic queue. Besides that, customers are now also able to order a batch of oil products via the online portal. As an aftermath, the time required to serve the vehicles has been reduced. Moreover, LUKOIL’s customers can now order bitumen delivery in spe-cial LUKOIL-branded tank trucks.

The modern fleet of bitumen carriers is equipped with electronic sealing systems, GPS/GLONASS sensors and video cameras transmitting data to the control center, which works around the clock. The company has also been taking advantage of dig-ital technology capabilities in the sales development sector. In 2018, it opened Internet stores in Rus-sia, Kazakhstan, and Turkey. The Russia-based online store has a section for legal entities, which has be-come a convenient meeting place for representatives of small- and midsized businesses.Another important event was the Company’s appear-ance on one of the world’s largest international mar-ketplaces, Amazon. LUKOIL became Russia’s first lubri-cants manufacturer to sell products on this platform. Further plans include the launch of online resources for individual buyers and legal entities in other regions of LUKOIL’s presence, as well as entering new internation-al marketplaces.

EXPANSION

In 2018, LUKOIL Lubricants Company’s subsidiaries have also been very successful in their business operations. A new subsidiary, LUKOIL Lubricants Africa S.A.R.L., was set up. It will run the company’s business in West and North Africa.

WESTERN EUROPE

Competition is very high in the European lubricants market, which is dominated by the world’s biggest brands. In order to be successful in the region as a whole, market players need to factor in specific aspects of each country. In some of them (Austria, for instance), clients prefer to use the services of franchised workshops, which is where the bulk of lubri-cants is eventually delivered to. In other countries such as Italy, for ex-ample, the majority of sales are done via the dealership network. Having its own manufacturing plant “in the region’s heart”, as well as an opportunity to offer clients high quality products and services, have helped LUKOIL Lubricants Europe (LLE) to become a more conspicuous player in this complex market. An extra boost in terms of growing brand awareness has been provided by first-fill deliveries of LUKOIL lubricants to Europe-based plants of the world’s leading car manufacturers. Last year, the sales of LUKOIL lubricants in the Western European region grew by 5 percent. In Italy, they jumped by 47 percent, in the Scandina-vian countries by 22 percent. We should particularly stress the grow-ing popularity of the LUKOIL GENESIS SPECIAL product line, which has also been driven by first-fill deliveries. Consequently, LUKOIL GENESIS SPECIAL VN 5W-30 sales increased by 25 percent, and those of LUKOIL GENESIS SPECIAL C3 5W-30 by 21 percent.The Company is not stopping here, and continues to expand its prod-uct range. Last year, LLE launched 43 new products designed to suit the needs of different groups of clients. These products include LUKOIL GENESIS SPECIAL JLR 0W-20, LUKOIL AVANTGARDE PROFESSIONAL LE 10W-40, new oils for OEMs and others.The company has signed new major contracts. Particularly, LLE will de-liver LUKOIL products to a consortium, which includes Austria’s Porr Group, a participant in the construction of an 18-kilometer section of the world’s largest underground railway tunnel with a total depth of 64 kilo-meters, which will link Austria and Italy.In response to growing demand in Western Europe, LLE has increased production in 2018 by 10 percent over the previous year. The plans for 2019 include a further boost of manufacturing and sales, as well as the full-scale business digitization.

EASTERN EUROPE

In 2018, demand for premium LUKOIL products in East-ern Europe grew substantially. At the same time, the number of old cars in the regional markets remains high. Accordingly, the share of products for use in these ve-hicles remains high in LUKOIL Lubricants East Europe (LLEE)’s portfolio. Last year was also marked by the sig-nificant growth of demand for LUKOIL GENESIS products. The strong growth was particularly driven by the switch from GENESIS PREMIUM to GENESIS SPECIAL in Roma-nia, Serbia, Bulgaria and Northern Macedonia, as well as the launch of the same product line in Croatia with the support of the local LUKOIL network and its dealer, NACIONAL.Regional demand was steady for AVANTGARDE engine oils and LUKOIL GEYSER hydraulic oils used in commer-cial vehicles. In the industrial lubricants sector we have also observed positive dynamics, largely influenced by the harmonization of the Romanian product portfolio with the Austrian one. Last year, LLEE continued cooper-ation with the state-owned CFR MARFA railway company. The company signed a contract with Romania’s DUCTIL STEEL Buzau metallurgical company, CE OLTENIA, the country’s largest energy company, OMV Petrom SA, the Eastern European leader in the oil and gas sector, as well as AUTOROM, the leading importer and dealer of spare parts for trucks.A number of major deals were signed in other East-ern European countries as well. In Greece, the compa-ny won a tender for supplying lubricants to the port of Thessaloniki. In Albania, LLEE managed to expand the partnership with SHEGA TRANS, the country’s largest transportation company. The plant’s fleet numbers more


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UKRAINE

According to official data, from Jan. 1 to Dec. 31, 2018, Ukraine imported 267 trade marks of lubricants, topping the 2017 figures by 35 units. The major share of the packaged lubri-cants market (which accounts for more than 75 percent of the market) is held by European companies. LUKOIL Lubricants Ukraine has held the number one spot for another year in the country’s packaged lubes mar-ket, controlling 9 percent.According to last year’s statis-tics, the sales of finished lu-bricants increased by 6 per-cent over 2017. During this period, the sales of the premi-um LUKOIL GENESIS products jumped by 37 percent. In 2018, the company launched three new products of this series in the Ukrainian market, including LUKOIL GENESIS ADVANCED 5W-40 and 10W-40, LUKOIL GENESIS ARMORTECH VN 5W-30 and LUKOIL GENESIS FE 0W-20. The plans for 2019 in-clude further expansion of this product line, which holds a lot of potential.In the commercial vehicles sec-tor, LUKOIL AVANTGARDE ULTRA

than 115 trucks, some of them are LUKOIL AVANTGARDE-branded. Significant success was achieved in the digitization sector. The company’s products went on sale on Roma-nia’s largest Internet-based sales platform, E-Mag. In 2019, the company plans to intro-duce new digital solutions, and develop the warehouse stock management system.

According to Financial Magazine, Romania’s engine oil market grew by 8.8 percent in 2018. The research reveals that over 50 percent of end users prefer to change oil at service centers. Key competitors hold rather firm positions thanks to five-year contracts with franchised workshops, which envisage supply of service equipment at the initial stage of cooperation. At the same time, motorists in Eastern Europe traditionally trust the advice of service centers’ staff more than that of trade reps at petrol stations. Another characteristic of this market is the large number of old cars. In a year’s time, the share of vehicles at least 10 years old increased and topped the 75-percent mark, after receiving a boost in the form of scrapped environmental tax in February 2017.

SAE 15W-40 oil was especially popular. Meanwhile, due to the introduction of the Euro 5 standard in 2016, and the growing EU-bound traffic flows, the numbers of trucks compliant with Euro 5 and Euro 6 standards have been rising in Ukraine’s car fleet. Taking into account that factor, in late 2018 the company introduced into the local market LUKOIL AVANTGARDE PROFESSIONAL LE 5W-30 and 10W-40 oil. This universal product complies with the requirements of both Euro 5 and Euro 6 standards, and is becoming more popular among customers.Other novelties in LUKOIL’s Ukrainian subsidiary’s product portfolio include LUKOIL ATF SYNTH ASIA and ATF SYNTH VI transmission oil, LUKOIL GARDEN 2T and 4Т gardening machinery oils. In 2018, the company was also intensively work-ing on expanding its greases portfolio, from 5 to 12 items, while the number of stock keeping units rose to 17.Thanks to LUKOIL Lubricants Ukraine marketing staff’s efforts to stimulate sales, the new products are already widely available in the retail sector. As all of them are oriented toward modern cars and have a large safety margin, sales dynamics in the near future are expected to be only positive. In 2019, the company plans to grow sales in the В2С sector by 8 percent, primar-ily due to sales of LUXE and GENESIS products. In order to meet this target, the company will hold a number of events, including enhancement of product aware-ness on Internet-based resources, conduct trade and marketing activities and in-troduce loyalty programs for retail salesmen, stimulate franchised workshops to buy GENESIS and AVANTGARDE PROFESSIONAL products, and further expand the GENESIS product range.In the В2В sector, intensive work is being conducted in order to introduce and market new products for Euro 5 and Euro 6 compliant vehicles, as well as work with car servicing companies. A full array of events is also planned for greases and specialty fluids, including the launch of products that have been permitted for use in the food industry.

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CENTRAL ASIA

According to 2018 results, the share of LUKOIL Lubricants Central Asia in Kazakhstan’s lubricants market totaled 13 per-cent. Following the upcoming launch of a lubricants plant with a 100,000-ton manufacturing capacity, the company plans to sig-nificantly boost its market share. By the end of 2018, the plant construction had reached the final stage. The Kazakhstan plant’s product range will encompass all types of LUKOIL lubricants. It will be the most advanced and in-novative lubricants plant on the entire CIS territory. The plant will feature a robotized warehouse for storing finished products and a modern quality control lab.Last year, the company signed contracts with a number of major Kazakh companies such as Aktobe rail and beam plant, KSP Steel, Kazakhaltyn mining and metallurgical company, Ust Kameno-gorsk titanium and magnesium works, Asia Auto, Lokomotiv 2030, Bogatyr komir, Ust Kamenogorsk energy distribution company, Kazakhstan’s Aluminum, Kazakhtelecom, Astana tazalyk, Almaty tazalyk, Sinooil, Kazfosfat.According to 2018 results, sales via the dealer network posted re-cord highs. The sales of premium lubricants in bulk grew by three to four times compared to 2013. In a year’s time, LUKOIL GENESIS sales increased by 91 percent. In 2019, the company intends to boost sales by 17 percent.Last year was marked by the launch of an Internet store for in-dividual buyers and businesses. Currently, LUKOIL products are available online to customers in Almaty. This year, the store will cover the entire territory of Kazakhstan and Central Asian coun-tries. This year, LUKOIL Lubricants Central Asia will be includ-

ed in the preferred manufacturers’ register of the Samruk Kazyna National Well-being Fund. This will facilitate the company’s par-ticipation in tenders held by large companies in Kazakhstan. Also in 2019, the company will fine-tune the operations of its dealer network in Mongolia.

TURKEY

Last year was the anniversary year for LUKOIL’s Turkish subsidiary, LUKOIL Lubricants Middle East. The company holds a firm position in Turkey’s lubricants market and exports products to more than 10 neighboring countries. Over a 10-year period, the Izmir plant’s manu-facturing capacity grew from 18,600 tons to 45,000 tons per year. A number of activities related to the plant’s further modernization is also planned for 2019-2021. These include digitization of all manufacturing processes, the launch of new blending and packaging lines, expansion of the tank fleet, and upgrades of laboratory equipment.In 2018, LUKOIL’s plant in Izmir produced more than 500 SKU, including those manufactured under the leading global carmakers’ brands. The company also plans to begin selling metalworking fluids and substantially expand the product range of specialty products. LUKOIL

GENESIS engine oils are gaining huge popularity. In the last three years, the volume of sales of these products has more than tripled.In 2018, the company opened its own Internet store in Turkey. The near-term plans include the launch of a section for legal entities, offering representa-tives of small- and midsized businesses an opportunity to order LUKOIL prod-ucts directly online, by-passing middle-men. Besides this, in an effort to sup-port sales, LUKOIL Lubricants Middle East has opened accounts in social net-works.


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CHINA

LUKOIL Lubricants China was registered in 2017. In such a short period, the compa-ny was able to achieve significant success. By the end of last year, LUKOIL Lubricants China’s dealer network was operating in 50 cities across the country. The Chinese com-pany’s list of customers includes major indus-trial companies such as the Fuqing nuclear power plant, Anji Аutomative Logistics and Tiantian Express transportation company.LUKOIL Lubricants China’s plans for 2019 en-visage further expansion of the dealer net-work and development of partnerships with OEMs, including the launch of deliveries of first-fill oils to China-based plants of the world’s leading car manufacturers. As early as January 2019, LUKOIL Lubricants China be-gan to supply LUKOIL GEYSER hydraulic oil to XCMG. The key event for the company will be the opening of a new lubricants plant in Kazakhstan, which is going to account for a significant amount of products delivered to China.

During a company presentation in Russia’s embassy in Beijing at the end of 2018, LUKOIL Lubricants China signed agree-ments of intent with two Chinese industrial holdings, XCMG and ТВЕА, the manufacturers of construction and electrical machinery. More than 200 guests attended the event, including the representatives of Chinese authorities and associations of different branches of local industry, executives and experts of leading companies in the metallurgy, energy, transportation, machine-building, and mining sectors, as well as the leading original equipment manufacturers (ОЕМs).“In China, car industry, shipbuilding, transportation and agri-cultural machine-building, and many other high tech branches of industry are being extensively developed. I am sure that LUKOIL’s product range will be in demand here, and will capture a conspicuous spot in the Chinese lubricants market,” Russia’s Extraodinary and Plenipotentiary Ambassador to China Andrei Denisov said during the presentation.“Our long-term strategy is to switch from targeted local deliv-eries to global partnerships with OEMs. Many companies that we have cooperated with in Russia and Europe run massive op-erations in China. We are convinced that our R&D and unique technological solutions will contribute to development of long-term ties with large industrial companies in China,” added LUKOIL Lubricants Company general manager Kirill Vereta.

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MEXICO

LUKOIL is Russia’s only lubricants producer officially present in Mexico. The national lubes market features over 150 brands. LUKOIL LUBRICANTS MEXICO S. DE R.L. DE C.V. launched opera-tions in January 2018. The Mexican company has set up the blend-ing of LUKOIL products at two manufacturing plants owned by third parties. Currently, its portfolio includes around 70 products. The market is responding positively to the Russian company’s products. LUKOIL AVANTGARDE ULTRA PLUS 15W-40 engine oil for commercial vehicles is generating a special interest, match-ing the locally popular CI-4 PLUS specification. LUKOIL GEYSER ST 68 hydraulic oil has also won over local motorists with its 3,000 service hours between drain intervals instead of 2,000 ser-vice hours offered by key competitors.

In July 2018, LUKOIL’s Mexican subsidiary started sales of engine oils for passenger cars. Last fall, LUKOIL Lubricants Mexico signed a contract with Mexico’s major spare parts producer and B2B supplier DACOMSA S.A. on a single-brand distribution of LUKOIL GENESIS products in 26 Mexican states. The plans for 2019 include expansion of the product portfo-lio by adding metalworking fluids and plastic greases. This year, LUKOIL Lubricants Mexico set up an Internet store, and intends to launch a major marketing campaign. All these measures, cou-pled with the interest of local customers in the Russian brand will help LUKOIL strengthen its positions in the Mexican lubri-cants market. In addition to this, the company also plans to enter other regional markets in 2019.


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LUKOIL MARINE LUBRICANTS

In 2018, the share of LUKOIL Marine Lubricants (which runs LUKOIL’s global ma-rine business) in the maritime shipping products market topped 12 percent. The company delivered marine lubes to more than 950 countries.Last year, it won again prestigious industry awards for implementing innovations in the maritime shipping business. The jury of the annual contest Maritime Stan-dard Awards 2018 named LUKOIL Marine Lubricants the winner in the “Technical Innovations” nomination for developing and enhancing the iCOlube intelligent cyl-inder oil lubrication system. The company also won the Dubai Maritime Innovation Award at the Dubai Maritime Summit 2018 for its pioneering efforts to advance creativity and innovation in the U.A.E. maritime sector. The company’s customers also highly value cooperation with LUKOIL Marine Lubricants. Last year, at the annual Council Meeting of the Norwegian procure-ment organization Incentra in Oslo, LUKOIL Marine Lubricants was named the winner of the “Supplier of the Year” award. The company has been cooperating with Incentra for two years, delivering approximately 20-25 percent of lubricants consumed by Incentra members. Another testimony of a positive customer feed-back is the signing of new three-year contracts for the supply of marine lubes to such industry players as Kuwait Oil Tanker Company (KOTC), Kuwait’s largest ship-owner, and Oman Shipping Company (OSC), one of the leading fleet operators in the Middle East.

MOROCCO

At the end of 2018, LUKOIL registered a com-pany, LUKOIL Lubricants Africa S.A.R.L., in the Kingdom of Morocco, to run its business in West and North Africa. With the support of the trade representation office of the Russian Federation in the King-dom of Morocco, the subsidiary has already held a number of working meetings with the representatives of the regional business com-munity and the heads of Morocco’s relevant ministries and agencies. Currently, the compa-ny is finalizing the first partnership contracts with major customers and leading dealers. LUKOIL will supply finished products to Africa from its European plants and a third-party blending plant in Morocco.

“We are glad that a Russian company will represent our country here and offer high tech products. We hope that the beginning of LUKOIL’s operations will send a positive signal for expanding cooperation and attracting mutual investments of Russia and Morocco. On our end, we will make maximum efforts to facilitate that,” said head of Russia’s trade representation office in Morocco Artyom Tsinamdzgvrishvili.

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INTESMO

In 2018, INTESMO, a joint venture of LUKOIL and Russian Rail-ways, reached new record heights. The company’s share in the Russian market of premium greases grew from 14 percent to 18 percent. The sales of FLEX greases increased by 50 percent over 2017.Last year, INTESMO developed and launched production of a number of new products. The company acquired and assembled a unique pilot production unit for manufacturing new products, production of low-tonnage greases and fine-tuning technology for production of advanced greases.More than 230 testing methods have already been conducted at the state-of-the-art engineering center. Its testing lab has been successfully accredited as a competent body.In 2018, the number of research trials at the INTESMO labora-tory grew by 86 percent, reaching over 27,000 test samples. The company conducted more than 50 technical audits of lubricants. In a year, 18 testing programs were signed and carried out. The company regularly holds various events for partners and custom-ers. In 2018, it held more than 15 training presentations and we-binars, which contributed to promotion of LUKOIL products in the market. In addition to this, last fall the company organized a busi-ness forum entitled “Metallurgy and Modern Solutions in Imple-menting and Supporting Lubricants”, which gathered more than 20 leading Russian and foreign companies.Last year, the company signed contracts with a number of indus-trial companies including Polyus, RUK and Nordgold. INTESMO received more than 10 positive feedbacks from new customers. Its products won two gold (LUKOIL POLYFLEX ARCTIC HD and LUKOIL POLYFLEX EP LC series) and two silver diplomas (LUKOIL

POLYFLEX ЕР and LUKOIL POLYFLEX OG HD series) in the “100 Best Goods of Russia” contest, providing a top-level recognition of the high quality of INTESMO plastic greases. The plans for 2019 include further development of the prod-uct portfolio. The company has already begun to develop poly-urea-based greases. Work is also under way to launch a product line of car care products.

LLK-NAFTAN

In 2018, LLK-NAFTAN’s production reached 33,000 tons, repre-senting an 18-percent increase over the previous year. This was the outcome of a planned upgrade of the plant’s technological facilities. The effort to modernize the plant included the instal-lation of a highly efficient centrifugal equipment for additives cleanup, the launch of a junction for drain and storage of carbon dioxide. Construction and erection work has begun to rebuild the block for compounding additives packages. “The current pace of modernization will make it possible to grow the plants manufacturing capacity to 40,000 tons in 2020. It will be a logical response to the market’s growing demand for our high tech

products,” stresses LLK-NAFTAN general director Andrei Zvontsov.As part of the modernization program, the company began de-velopment of the “Green Project” in 2018, which aims to provide the plant with in-house produced CO2. The continuing growth of LLK-NAFTAN’s production over many years has driven the need to boost deliveries of this important component, which is required in alkyl-phenolic and sulfonate additives. The inclusion of a high-ly purified CO2, produced in the plant’s own furnaces, will contrib-ute both to growth of efficiency and environmental friendliness of the manufacturing process.Today, LLK-NAFTAN’s key driver of product demand are export de-liveries to companies that are not part of LUKOIL Group. Last year, the company’s export grew by 23 percent. The number of import-ing countries reached 38, including first-time importers Lithuania, Slovenia and Algeria. The main bulk of consumption of additives produced by the Russian-Belarussian venture (over 45 percent) was traditionally accounted for by LUKOIL’s marine lubes business. Apart from that, about 20 percent of LLK-NAFTAN additives were used in manufacturing of engine oils at LUKOIL’s Russian plants. In 2018, LUKOIL and LLK-NAFTAN continued to jointly devel-op and test new formulations for Heavy Duty engine oils. The colleagues from INTESMO also took part in the collective R&D effort, aiming to study the opportunities for using LLK-NAFTAN components in production of greases.


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RUSSIA’S BEST CAR COMPONENTS EXPORTER

LUKOIL HAS WON THE AWARD IN THE “2018 BEST RUSSIAN EXPORTER” NOMINATION IN THE CONTEST HELD BY THE RUSSIAN AUTOMOTIVE FORUM (RAF). THE JURY RECOGNIZED THE COMPANY’S SUCCESS AS A SUPPLIER OF AUTOMOTIVE LUBES AND GREASES TO FOREIGN MARKETS. THE AWARD CEREMONY WAS HELD ON MARCH 19 DURING THE RAF 2019 CONFERENCE, WHICH WAS ORGANIZED BY ADAM SMITH CONFERENCES

OEMS’ SEAL OF EXCELLENCE

RAF is the key, major forum devoted to Russia’s car industry, which has been held annually over the past 22 years. The event gathers crème de la crème of the industry: top managers of leading Russian and foreign car manufacturers, heads of local and foreign car compo-nents and consumables suppliers, as well as representatives of government au-thorities dealing with industrial issues.“LUKOIL delivers automotive lubes to more than 40 countries worldwide, coop-erates with all foreign carmakers present in Russia, and is the country’s only sup-plier of lubricants to car manufacturing plants in Europe. Over the last year, the Russian producer has set up wide sales networks in Mexico and China, and also established a subsidiary in Morocco to run corporate operations in Africa. Mean-while, the company has retained its firm standing in the EU market, being one of the five European lubes suppliers to Ger-man car factories. LUKOIL’s performance in international markets truly deserves high praise,” the organizers said.As he was receiving the award, LUKOIL Lubricants Company general director Kirill Vereta thanked the forum partic-ipants for their high evaluation of the Company’s performance. “The recognition by the professional automotive commu-nity is very important for us. Cooperation with car manufacturers is the foundation

of our development. They are the ones shaping present-day and fu-ture lubricant standards. Based on these standards, we produce mod-ern oils, which are in demand today in many parts of the world, and we also create products intended for long-term use in the future,” said Kirill Vereta.LUKOIL was named the best ex-porter not only among lubricants companies, but among car compo-nents and consumables producers, too. This was not the first time that RAF recognized LUKOIL’s top per-formance – in 2017, the Company was named “Russia’s Best Supplier in 2016”.“We are not the only ones who are due credit for this award, so are our partners, international auto-makers. The Company has decided to enter new markets via opening expansion-oriented subsidiaries in Latin America, Africa and Asia Pa-cific. Our strategy in these regions includes first fill deliveries of lubri-cants to car manufacturing plants. We have been moving steadily from local deliveries of lubricants to international car producers op-erating in Russia toward develop-ment of global cooperation proj-ects,” noted LUKOIL Vice President for Petroleum Product Sales Maxim Donde.

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Each year, our plants are audited by major international OEMs such as Volkswagen, Ford, Renault, Daimler and others. At the end of 2018, a full-blown, integrated audit of LUKOIL’s manufacturing facilities in Volgograd was conducted by a large industrial com-pany, which had developed its own quality management system and audit rules. Eventually, LUKOIL Lubricants Company con-firmed its status of a quality supplier of lubricants to Severstal. Following a three-day system audit by Severstal’s mining and metallurgical divisions, the auditors highly valued the qual-ity control system and manufacturing operations at LUKOIL Lubricants Company and INTESMO plants in Volgograd, which produce advanced LUKOIL lubes and greases.“When it comes to evaluating product suppliers and service pro-viders, only several dozen industry companies in Russia use ISO 9001 standards, and have their own corporate regulations on au-dit. These are chiefly major players in energy, military industry, shipbuilding, construction and machine-building. Severstal, rep-resenting the mining and metallurgy industry, stands apart from these companies. It creates a single database for priority sup-pliers, regularly updating basic information, and facilitating the most efficient running of operations,” said project chief Andrei Yasnovsky. After completing the audit, LUKOIL Lubricants Company and Severstal experts discussed the issues of using special min-ing and steelmaking equipment. These consultations helped Severstal experts acquire necessary information on new products

SEVERSTAL AUDIT ENDORSES LUKOIL LUBES

Oksana Yevdokimova,senior manager

for Industrial Sales and Service Development

developed by LUKOIL, as well as their behav-ior during use. Their application in the future will increase the reliability and economic effi-ciency of metallurgical production. The repre-sentatives of the leading steel industry com-pany have carefully studied the possibilities of expanding the range of lubricant supplies, primarily by means of the advanced LUKOIL greases of the FLEX family. Thanks to the lat-est developments of the INTESMO Engineer-ing Center, Severstal has displayed interest in advanced products for the metals industry such as the STEELFLEX product line, which can be used in bearing blocks of the steelmaking equipment.

“LUKOIL and Severstal have been developing cooperation since 2006. Severstal is one of the largest consumers of hydraulic and specialty fluids, engine, circulating and energy oils under LUKOIL and Teboil brands. The in-dustry giant’s audit at our Volgograd manufacturing plant allowed partners to systematize and expand the cooperation program for the coming years,” said Oksana Yevdokimova, senior manager for Industrial Sales and Service Development, a participant in the audit on behalf of LUKOIL Lubricants Company.

NEWS / LUKOIL LUBRICANTS / JUNE 2019

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LUKOIL’s advanced plastic greases, produced by INTESMO, are becoming increasingly popular in the mining, metallurgical, wood processing, cement, oil and food industry. Physical, chemical and oper-ational properties of FLEX series of greases are on a par and often even outperform foreign-made counterparts.

FLEX greases have been widely recognized by the or-ganizers of the “100 Best Russian Products” national contest. Ultimately, INTESMO won two top awards.

INTESMO GREASESМАКЕ TOP-100 BEST RUSSIAN PRODUCTS LIST

Russia’s largest greases manufacturer was awarded a laureate’s diplomas with a golden logo “100 Best Products of Russia” for developing a line of in-novative greases LUKOIL POLYFLEX EP LC and LUKOIL POLYFLEX ARCTIC HD, capable of operating under extreme temperatures and working con-ditions. The company also won “silver diplomas” for developing a LUKOIL CARBOFLEX OG HD series of special-purpose industrial greases for open gears and LUKOIL POLYFLEX EP multi-purpose lubricants. The companies with products that won the “Laureate” or “Diploma Recipient” awards at the federal stage of the competition are entitled to use the logo over the next two years. After that period, the products can be nominated again to partici-pate in the competition.The event organizers – Russia’s Federal Agency for Technical Regulation and Metrology, the Interregional non-profit organization Quality Problems Academy and Standards and Quality magazine – also handed the awards to a number of representatives of companies that won the contest at fed-eral level. In addition, Lyudmila Petrova, INTESMO’s deputy general direc-tor for manufacturing and technology, received the “Outstanding Quality” award for her high professionalism, exemplary execution of work duties and significant contribution to the company’s development.“The main criteria for evaluation of competing products are consumer prop-erties, quality, safety, the use of environmentally friendly and energy-saving manufacturing technologies. The ‘100 Best Products’ mark is a wholesome

guarantee that the product can be trusted,” comment-ed Sergey Sarychev, director of the State Regional Center for Standardization, Metrology and Testing in the Volgograd Region. Despite the fact that INTESMO is a relatively new company, it has already managed to earn a reputation of a producer of high quality plastic greases, recog-nized by leading Russian and foreign companies in a number of industries. LUKOIL greases meet the OEMs’ highest requirements and have been included in lu-brication charts of leading producers of metallurgical equipment and mining machinery. “The basis for INTESMO’s development is prod-uct quality, product technical support and a team of professionals at the Engineering Center, which is transforming into an international center of excel-lence in the area of plastic greases. Our entire team deserves credit for the company’s successful perfor-mance, which has been validated by the awards we won in the ‘100 Best Products of Russia’ contest,” said INTESMO general director Dmitry Anokhin.

14

IMPOSSIBLE IS DEFINITELY

POSSIBLE

TWELVE YEARS AGO, SHE WAS LOOKING FOR NEW CHALLENGES AND A NEW DRIVE IN HER CAREER. AT ABOUT THE SAME TIME, LUKOIL

LUBRICANTS COMPANY WAS SEEKING ENERGETIC EMPLOYEES WHO WOULD DEVELOP SALES IN THE DEALER NETWORK THAT WAS BEING

SET UP. THAT’S HOW NATALIA PETROVA OPENED HER FIRST PAGE IN THE COMPANY’S HISTORY. TODAY, SHE RUNS THE TECHNICAL

FLUIDS DIVISION, WHICH IS ONE OF LUKOIL LUBRICANTS COMPANY’S MOST SUCCESSFUL BUSINESS LINES. THE NEW HEROINE OF OUR “PRO PROFILE” SECTION SPEAKS AT LENGTH ABOUT HOW IT

ALL BEGAN, WHY “IMPOSSIBLE BECAME POSSIBLE”, AND WHERE TO LOOK FOR FURTHER DEVELOPMENT

OF THE CAR CARE PRODUCTS BUSINESS

well, and the sales were gradually growing. In three years’ time, I was appointed head of sales who was in charge of Volga limousines and Gazelle cargo vans. However, at one point my scope of duties was slowly turning my job into a mo-notonous rut, and I was looking for something new to drive me.In 2007, LUKOIL Lubricants Com-pany advertised a vacancy in a newspaper. I saw it and I decided to check whether my capabilities were in demand in the labor mar-ket. It was a risk, but the Compa-ny turned out to be the very place where things got really interesting for me. I am very thankful for that to my first mentors here, especially Marina Kondrina, who was running the development of the dealership network. She was a true fount of knowledge, a professional, and a very goal-oriented person.In 2013, LUKOIL set a goal for us to increase the company’s presence in the car care products market seg-ment, where it held only about 2-3 percent of Russia’s market at the time. I was offered the job of the project manager. We had grandi-ose plans, and I was expected to immediately deliver top results. The management played the very subtle “Can you do it?” mind game with me. I was eager to prove that I could, and I accepted the challenge.It is well known that experience is the best teacher. Fortunately, my experience in the car care business was positive, and I didn’t have to learn from my own mistakes. More-over, I was able to delve deeply into the subject matter thanks to our expert and process engineer Marina Tsaplina who possesses en-

I’ve been with the Company since its very early days. In 2007, I became part of the team that was developing our dealer network for lubricant sales, and in 2013, I took up re-sponsibility for technical fluids business, which I still run. It is a relatively new line of

business in our commercial division. Lubricants were a totally new area of expertise for me. That is why working for LUKOIL Lubricants Company was a genuine challenge for

me. I accepted it with gusto and never had any regrets. Originally, I had neither experi-ence nor education in the oil and chemicals industry. When I was choosing a university, I decided to follow in my mother’s footsteps, and enrolled eventually at the Economics

Dept. of the All-Russian Distance Institute of Finance and Economics, which today is part of the Russian Government’s Finance University.

It was a precious experience, but I wasn’t meant to be a finance expert. My sociable na-ture was driving me to try myself in the commerce business, and I began at the lowest

rung of the professional ladder as a merchandiser and trade rep.In the first two years of my career, I was working mostly on promoting product brands,

but then one day totally by accident I radically changed my line of work. It all happened when I was advising a customer in the store once, and he turned out to be a top-ranked

official at a automotive company. He was looking for proactive salespeople, and he of-fered me to try myself at selling cars.

That is how in 2003 I became a sales manager at Danian, a Moscow-based dealership of the GAZ car factory. I fully immersed myself in learning about the vehicles I was selling,

and coming to terms with the specifics of working with car buyers. Everything was going

Natalia Petrova,Senior manager,

responsible for technical fluids

PRO PROFILE / LUKOIL LUBRICANTS / JUNE 2019

15

cyclopedic knowledge in the area of petrochemicals.My colleagues and I were actively finding niches where LUKOIL hadn’t been represented yet. We were ex-panding the product range of our deliveries to stores, petrol stations, industrial and transportation com-panies, as well as franchised work-shops. LUKOIL Lubricants Company started to supply first fill products to car manufacturers, along with the engine oil deliveries. The “oil brand”, of course, was the driver of energetic promotion of car care products. Our oil earned factory of-ficials’ positive reviews, and its suc-cess opened many “doors” for us. Moreover, the test of our clients’ vehicles confirmed that our prod-ucts’ quality matched even that of premium German counterparts. In 2013-2018, the sales of LUKOIL car care products rose by more than 11 times, jumping from 2,000 tons to 23,000 tons. It was a pleasure to know you had contributed to the overall success of our team.Past achievements, however, are his-tory now, and we need to identify new potential for growth. In the car care products segment LUKOIL had previously followed the same pat-tern as in the engine oil sales, pro-moting itself as a “people’s brand” in the medium price segment of the mass market. Today, our prod-ucts take into account the require-ments of vehicles and equipment of any generation. Our product range includes more than 100 items – an-tifreezes, brake fluids, AdBlue, wind-shield washer fluids and others. To-day, the Company puts a stress on two key criteria of the brand – quali-ty and high technology.

The fact testifying to a complete-ly new quality level of LUKOIL products is that LUKOIL Lubricants Company is currently holding talks with foreign car manufacturers re-garding development of lubricants and antifreezes for future genera-tions of electric cars!Today, a wide pool of consumers firmly associates LUKOIL with top quality. Our work is focused on cre-ating lubricants and car care prod-ucts, which will be perceived by our customers as premium brands. The formulations used today to produce antifreezes, windshield washer flu-ids, and other technical fluids, pro-vide quality, which substantially ex-ceeds mass market standards. Unfortunately, the market is cur-rently flooded with numerous cheap products of doubtful quality, and this creates problems for pre-mium brands. Most Russian motor-ists rarely think about the quality of components of cooling fluids or windshield washer fluids. Mean-while, their composition can have a major impact on a vehicle’s condi-tion or a driver’s health security. In this situation, the Company has begun to work on creating less ex-pensive formulations. The task is twice as more complex since man-ufacturing lower quality products is impermissible for LUKOIL. Our col-leagues in the Science Dept. found the solution: search for new com-ponents used in related branches of the chemicals industry.Our experts have determined that many compounds, which are not used in lubricants production can be used as rather successful re-placements for a number of classi-cal components in antifreezes and

windshield washer fluids. Moreover, the execution of LUKOIL’s plans to develop oil refining and petro-chemistry, will provide opportunities to access new types of own raw materials. By the way, potential for growth in the car care products market exists in the foreseeable future, too. New antifreezes in-tended for use on a wider range of equipment are already being tested at our experimental laborato-ry in Perm and our partners’ facilities. New develop-ments with the use of our own raw materials will provide an extra competitive advantage for us.When you devote a lot of time to a project, you start treating it as your “child”. Probably, that’s why I keep an eye all the time on the latest glob-al trends in our sector, and think about what oth-er improvements could be made. For example, I compare our product range with similar products abroad, and keep monitoring them even when I’m on vacation. By the way, travelling is one of my fa-vorite hobbies. I try to spend every holiday in a new country, and always study what the local car care markets have to offer, ask the salespeople about their customers’ preferences both at stores and petrol stations.My other beloved pastime and “mental switch” is sports. When I was young, I practiced rhythmic gym-nastics at a pretty competitive level. I was a tireless, hyperactive kid, and my parents decided to stream-line all that energy into sports.This wasn’t the elite level sports, to which you devote all the time you have, risking your health because of the heaviest strains in practice. It was more of a fa-vorite pastime, which helped me achieve well-bal-anced growth. Most people think that rhythmic gym-nastics is all about grace, flexibility and stamina. As a matter of fact, it is also an excellent tool for training one’s memory. When you integrate a large number of combinations in a well-coordinated manner and in sync with the rhythm of music, you simultaneous-ly train your memory, quickness of reaction, and pa-tience, too. Today, I often find myself thinking that I remem-ber everything, even the smallest detail. That’s why I’m not afraid of multitasking. Sports and LUKOIL Lubricants Company have taught me that everything is possible!

16

RUSSIA’S SNOWBIKE CHAMP IS FIRST TO TEST LUKOIL SNOW 2TDeveloping a product line of oils for small-sized vehicles, the Company created a new product for vehicles operating in ex-treme winter conditions. LUKOIL SNOW 2T synthetic oil for snow-mobiles, snowbikes, ATVs and all-terrain vehicles with two-stroke engines is a true record breaker among competitors in terms of low-temperature properties. Its pour point of oil is -54 °C! A special formulation of this oil provides for an ultra-low pour point, an easy start of the engine at subzero temperatures, and wear protection at the ignition stage. The optimum combination of Group III+ base oil, esters and a modern additives package provides both excellent wear protection, and impeccable engine cleanliness. Besides, the product composition includes polyisobu-tylene, which contributes to the formation of a steady mix of fuel and oil, and reduces emissions from its combustion.The first person to pour LUKOIL SNOW 2T into her “winter bike” was Maria Makhach, editor-in-chief of Fisht, a magazine devot-ed to riders, as well as Russia’s reigning champion in snowbike cross-country and enduro on snowbikes, and runner-up in the European snowbike cross-country championship. Together with her fellow lovers of extreme sports Maria Makhach launched a magazine devoted to snowmobiles and extreme sports as a whole. Maria’s job obligated her to keep an eye on novelties in the market that pose interest to riders, such as their gear, gadgets, vehicles, and special fluids used in their mainte-nance. Owing to her wide circle of contacts, Maria was one of the first people who learned about the upcoming launch of the new oil. We offered her to be our test pilot, and try out the new high tech product.This spring, Maria and the team of her fellow bikers wrapped up their snow season by making powerful runs on the majestic slopes of Arkhyz Mountain. We asked Maria to tell us how LUKOIL SNOW 2T performed “in the heart” of her snowmobile. “This oil works – it’s a fact. There were no complains regarding performance of the engine, which had just been broken in. The running engine load at an altitude of 2,500-3,000 meters above sea level at 6,500-8,200 rotations per minute is enormous. But the snowmobile behaved confidently and steadily despite oxy-

gen deficiency and traction loads. According to our observations, fuel consumption eventually decreased. To our surprise and joy, the oil is less viscous at subzero temperatures than most imported oils we had tried before. In four days, we covered 100 kilometers, spent 40 liters of fuel, and less than two liters of oil. At the same time, we almost never noticed any smoke during the exhaust. At any rate, this is very positive both for the environ-ment and the riders’ own convenience!” Maria Makhach shared her impressions.

COMPARISON OF POUR POINTS OF OILS

–54

–39

–49

–49

–45

-10 °С0 °С -20 °С -30 °С -40 °С -50 °С -60 °С

Аnalogue

Аnalogue

Аnalogue

LUKOIL SNOW 2TАnalogue

PRODUCT / LUKOIL LUBRICANTS / JUNE 2019

OREGON-BRANDED OILFOR SAW CHAIN INVENTOR

LUKOIL Lubricants Company has become a technology partner of U.S.-based Blount company, the world’s leading manufacturer of machinery and consum-ables for the forestry, parks and gardens sector. LUKOIL’s lubricant plants in Russia will launch production of a wide line of OREGON-branded oils for the Russian market. The product range of renewed Oregon will include all types of oil for two- and four-stroke engines of small-sized machinery, chain oil for petrol- and electric-driven chainsaws, as well as products for lubricating chains and guide bars of harvesters. “The project with Blount is a new, interesting challenge for us. The Oregon brand commands respect in the logging industry. It’s a pioneer in manufac-turing of modern-day saw chains. It is truly an honor to enter a partnership with such a company. Together with Blount we managed to find a new solu-tion to enhance efficiency of servicing special-purpose machinery. Our devel-opers have increased the share of synthetic base stock in OREGON products. Consequently, this improved the oil’s resistance to extremely low temperatures, enhanced wear and rust protection, and significantly reduced smoke during fuel combustion,” said Bogdan Sakhnevich, LUKOIL Lubricants Company senior manager, responsible for the project.

Denis Lunyov,Blount LLC sales director

“Localization of the OREGON brand in Russia is a well thought-out step, driven by special environmental conditions for logging in Russia and aiming to improve low temperature and wear-resistant properties of lubricants. It was preceded by a series of successful lab and field tests. The properties of LUKOIL base oils helped us further improve high quality OREGON products. I want to note that this localization effort will be thoroughly analyzed by Blount Group’s representation offices in other regions of the company’s operations,” said Blount LLC sales director Denis Lunyov.

The truck began its long journey in February, and the crew of The Fifth Wheel magazine filed reports as it rode along covering the 10,000-ki-lometer stretch between St. Petersburg and Khabarovsk. The trip was used to test the new product in Russia’s lubricants market – LUKOIL AVANTGARDE PROFESSIONAL LE engine oil, 10W-40 viscosity grade, which complies with the leading global quality standards (API CJ-4, ACEA E4/E6/E7/E9 and JASO DH-2), as well as specifications of reputed producers of heavy duty commercial vehicles (MAN, Mack, Renault, VOLVO, MB, Scania and others).“Today, no one is surprised when a truck covers 200,000 kilometers in a single year, and some truck drivers manage to drive even more than 300,000 kilometers per year. Complex condi-tions of vehicles’ operation in Russia suggest that a truck may require five or six oil changes during a year, the difference not only being the

DAF XF 105.460 TRACTOR TRUCK RUNNING ON LUKOIL ENGINE OIL WAS ROAMING RUSSIAN ROADS FOR NEARLY A MONTH, EVENTUALLY COVERING 60,000 KILOMETERS IN THE JOINT PROJECT

OF THE FIFTH WHEEL (PYATOE KOLESO) MAGAZINE AND LUKOIL LUBRICANTS COMPANY. THE TIME HAS COME TO EVALUATE THE QUALITY OF OIL, WHICH IS WHAT

MIC GSM INDEPENDENT LABORATORY EXPERTS HAVE SET OUT TO DO

NEW PROFESSIONAL COVERS60,000 KILOMETERS

TESTING / LUKOIL LUBRICANTS / JUNE 2019

extra 40 liters of oil, but also additional ser-vicing expenses. The amount of money saved on maintenance could be substantial for both the ordinary truck owner and the major carrier whose fleet numbers dozens of trucks. That is why our readers find the topic of testing advanced engine oils with an extended drain interval interesting,” says The Fifth Wheel editor Mikhail Ozherelyev who participated in the first stage of the run, and kept the “trip diary”. The 60,000-kilometer interval wasn’t picked at random. When its trucks are driven in Europe-an countries boasting high fuel quality, DAF recommends that oil be changed after 90,000 kilometers, whereas in Russia due to more difficult conditions of use (unstable oil quality with a high sulfur cut, low temperatures, etc), the truck manufacturer recommends that oil be changed after 50,000-60,000 kilometers, while some DAF dealers even go as far as to suggest that it be reduced to 40,000 kilometers.A more detailed analysis of oil properties re-quired taking samples at four points along the route – at 23,300, 45,398, 52,595 and 59,792 kilometers – as well as taking fresh oil samples from a can. The tests, conducted by the MIC GSM laboratory, provided very detailed informa-tion on the engine oil’s physical and chemical properties, its operational properties and the presence of wear debris. By the way, wear indicators in all samples never exceeded the norm, including the samples that were running with 20-percent longer drain intervals (60,000 kilometers instead of 50,000 kilometers). During the entire run the oil was demonstrating stable viscosity and temperature properties: kinematic viscosity indicators at 100 °С stayed within the original 10W-40 viscosity grade (ranging from 12.5 to 16.3 square millimeters per second) and practically remained unchanged whereas insignificant growth was caused by the penetration of soot (up to 0.4 percent).According to Yevgeny Satymov, LUKOIL Lubricants Company’s Customer Support Dept. senior manager, the presence of unburnt fuel and soot indicates violations in the combus-tion process – these signs (provided there are no signs of increased wear of the cylinder-pis-ton group and pollution by dust) suggest that over a 45,000-kilometer distance the vehicle was running on fuel, which wasn’t of “the highest quality”. After the 45,000 kilometers mark, the low-sulfur fuel was used, which is confirmed by the lack of growth of quantity of soot and fuel in the oil.The low quality of fuel also made an impact on the base number. While the oil’s original base number was 11 mg KOH/g, after the tests (59,792 kilometers later) this indicator decreased to 4.9 mg KOH/g, which makes 44 percent of the original base number. It is recommended that oil be changed when reaching less than 40 percent of the fresh oil’s total base number.It should be noted that the base number would be higher if using fuel of better quality. It is another reason why you shouldn’t save on

quality fuel – the better the quality, the slower the process of oil deterioration.On the other hand, the acid number was growing insignificantly during the entire 59,792-kilometer run, signifying an abundant reserve of neutralizing, detergent and dispersant properties, as well as the oil’s high resistance to oxidation. A short resume: oil solved the task successfully! Its high-performing lubricating properties efficiently protect the engine from wear even when fuel isn’t completely burnt, and the functional elements of the additives package help achieve high stability and resistance to oxidation. Despite the negative influence of the high-sulfur fuel, the oil’s detergent and dispersant properties remained at an acceptable level. These indicators, as well as the low burning oil consumption provide an opportunity to carriers to safely extend drain intervals up to 60,000 kilometers, helping them reduce downtime and maintenance costs.

DYNAMICS OF ACCUMULATION OF WEAR-INDICATING METALS

23 300

1725 28 29

5 4 54 1 30 023 3 1

45 398 52 595 59 792

Cont

ent,

mg/

kg

Oil run, km

The low content of metals in the oil signifies reliable engine protection from increased wear. The lower it is, the better oil performance indicators.0

140

120

100

80

60

40

20

Fe (upper limit 140)Al (upper limit 25)Cu (upper limit 60)Pb (upper limit 60)

DYNAMICS OF CHANGE OF BASE (TBN, ASTM D4739) AND ACID (TAN) NUMBERS

23 300

6,91

4,84 4,98

FRES

H O

IL

4,92

45 398 52 595 59 792

mg

КОН

/g o

f oil

Oil run, km

The increase of the base number testifies to efficient neutralization of acid products of fuel combustion, while retaining sufficient reserve to prevent the increase of the acid number (TAN).

0

12

10

8

6

4

2

TBN (ASTM D4739)TAN

10,99

1,632,37 2,35 2,50 2,47

20

N E W T R A I L B LA Z E R S O N T H E I C E C O N T I N E N T

THREE POLES IN 34 DAYS

In the run-up to the 200th anni-versary of the around-the-globe expedition of Lazarev and Belling-shauzen, Russian explorers who were the first to discover the “Icy Mainland”, RD Studiya motion pic-ture company shot unique footage this winter as part of its effort to produce a documentary entitled “The Antarctic. Two Hundred Years of Discoveries”. The seven-member expedition headed by Valdis Pelsh, the famous television present-er, musician and extreme sports enthusiast, riding in two all-terrain vehicles managed to cross three poles at once – the South Pole, the Pole of Cold, and the Pole of Inac-cessibility. No man has ever before accomplished such a feat. “Our team adheres to a principle that we never give up on. You can’t shoot a movie about Mount Everest out of Moscow, you can’t make an authentic picture about the big white shark shooting in an oceanarium. The same thing here – you also can’t shoot a movie about the Antarctic without crossing the continent yourself. You need to understand it, feel the aura of local

Valdis Pelsh, television presenter, musician and extreme sports enthusiast

Our team adheres to a principle that we never give up on. You can’t shoot a movie about Mount Everest out of Moscow, you can’t make an authentic picture about the big white shark shooting in an oceanarium. The same thing here – you also can’t shoot a movie about the Antarctic without crossing the continent yourself. You need to understand it, feel the aura of local places and the atmosphere of events taking place around you. That way you’re going to be honest both with yourself, and your audience.

places and the atmosphere of events taking place around you. That way you’re going to be honest both with yourself, and your audience,” says Valdis.In order to formally cross the Antarctic, you need to cover the distance of slightly over 1,400 kilometers. The expedition made that task a bit more complicated by choosing the maximum length of the trip, and visiting virtually all polar stations, both operating and closed. In an effort to film valuable video footage, the expedition covered 5,519 kilometers in 34 days driving Yemelya all-terrain vehicles. These are special amphibian 6x6 wheelers fitted with

LUKOIL lubricants and greases helped complete the first-ever autonomous motor vehicle run across the Antarctic

a turbocharged Toyota 3СТ engine. The cars were manually assembled by constructor and traveler Vasily Yelagin, who was also one of the expedition members.The reliability of vehicles’ operation under harsh conditions depended to a great extent on the quality of fuel and lubricants. The choice of LUKOIL as supplier of fuel, engine oil, greases, and car care products having unique low-temperature and protection properties, was com-pletely justified. The engine, the gear box, the cooling system, wheel and bearing – these and other systems that used LUKOIL and Teboil products helped the vehicles impeccably cover the distance.

ENDURANCE TEST

“Experienced polar explorers kept warning us ‘You will get nowhere. Don’t get upset. The earlier your cars break down, the earlier we’ll come and get you out of there. The further you climb the ice dome, the more difficult it will be to reach you. And we will definitely have to

come and get you’. As we learned later, the ‘bets’ against us were 20:1. As the trip date was approaching closer, we were doubting ourselves more and more. However, we were able eventually to overcome all the difficulties. On the third day of the expedition we were stuck against this slope that we couldn’t clear right off the bat. The vehicles, carrying twice the nominal load, simply weren’t able to pull it off. Aboard, we had everything you could imagine: the stock of clean clothes, food, spare parts, shooting gear, communications equipment, and at that moment four tons of fuels in drums inside the trailers! We resolved the issue immediately: batch by batch, we drove everything to the top, fully reloaded the vehicles, and continued our trip. Yes, we did have minor failures later. For instance, the trailer hitch was getting torn, due to cold and heavy loads the metal was becoming brittle; drive axle boots were break-ing. But Vasily Yelagin and our two driver mechanics Alexei

22

Makarov and Vladimir Obikhod were constantly monitoring the vehicles to prevent defects,” recall Valdis Pelsh and RD Studio director Kristina Kozlova, the only female participant in the expedition.The vehicles’ speed was ranging from 5 to 20 kilometers per hour, and they were moving all but smoothly. The local climate is not only the coldest, but also the windiest on the planet. Strong currents of air create snow ridges and thick crests on hard-ened banks of snow. Seen from a hovering quad-copter, the typical relief in an Antarctic valley might resemble to spectators a whimsical pattern of frost on a window. The travelers, though, had associations with an icy “washboard” as they drove over such a

surface. It was a genuine trial for both the people and the vehicles. The cars moved at the slowest speed in coastal areas where the risk of encountering snowdrift-cov-ered crevasses was the biggest. The depth of such cracks could have reached several dozen or even hundred meters. In order to secure vehicles from falling into crevasses, one of the expedition members (tied to a car’s bumper with a life-line rope used by mountain climb-ers) was carefully advancing on

foot in front of the vehicle, poking the snow with a pole. The pressure of the all-terrain vehicle’s massive tire on the snow surface is approx-imately equal to the pressure of a man’s foot. Where the man walks safely, the car will also ride safely.Around 70 percent of the route was passing through untouched ice areas, aside from the trails beaten by tractor-and-sled trains. As the expedition progressed, the elevation changes ranged from 100 meters above the sea level at

the Novolazarevskaya polar station on the north of the continent to 3,500 meters at the Vostok station, located near the South Geomag-netic Pole.The abnormally low pressure and the low level of oxygen in the air at high altitudes makes an impact on both the man and the vehicles. Hu-mans can experience bouts of suf-focation, headaches, nosebleeding. The cars lose power, and consume more fuel and oil. During the day,

Vasily Yelagin, the creator

of the Emelya all-terrain vehicle

(right), and mechanic Vladimir Obikhod

constantly monitored the vehicle’s condition

As the crew kept progressing during the trip,

it released 17 thrilling reports that went on air

23

the travelers could only count on the heat of the radiator. During the night, the engines were shut down as fuel saving was simply a must

on such a long autonomous trip. The round-the-clock Antarctic sunshine was warming up the cars’ interior through the windows, but the temperature inside the cars would drop to -10 °С by the next morning, while outside it was -40 °С. Expedition members solved this problem by wearing warm clothes and using sleeping bags. “Waking up” the cars in the morning was something else as DT-A-K5 Arctic fuel and LUKOIL lubricants helped start the engines.The crew was shooting and directing on a daily basis. As the trip was progressing, the crew released 17 exciting shows for Channel One. However, the bulk of recorded footage eventually had to be edited in a warm Moscow studio. Inter-

views with polar explorers; the footage of abandoned and operational stations, the scientists’ research activi-ties; footage of landscapes and wildlife of breathtaking beauty... Over sixty hours of shooting, supplemented by numerous reports from historical archives, should evolve later this year into a documentary entitled “The Antarctic. Two Hundred Years of Discoveries”.The unique run, undertaken in order to shoot the movie, is the longest trip by car across the “sixth continent”. This means that LUKOIL’s fuel, lubes and greases are also world record holders!

The Vostok polar station was opened in 1957. Its building, dating back to 1970, is currently covered by three-meter-tall snow banks. A 40-meter-long, manually dug tunnel leads to the main entrance. The station is famous for its unique giant subglacial lake, which lies at a depth of 3,800 meters. As they drill through the ice floe, scientists collect data on natural changes on the planet, which occurred over the last million years. Vostok is the harshest place on Earth for life and work. It is located at 3,000 meters above the sea level. The temperatures of -70 °C aren’t surprising here. Reaching the station by air is not possible in 10 out of 12 months in a year. During the filming, the RD Studio crew disrupted the station’s nearly total isolation from the outside world.

Going to Extremes with LUKOIL

Over the course of the entire trip with LUKOIL’s GENESIS POLARTECH 0W-40 en-gine oil (which was renamed GENESIS ARMORTECH 0W-40 in March 2019), the engines of the all-terrain vehicles were running flawlessly. Taking into account the mileage run during preliminary two-month preparations in the Middle Urals mountains, the overall distance covered by Yemelya with the GENESIS engine oil totaled around 10,000 kilometers. The key elements for producing this oil for northern latitudes are the polyalphaolefin basic component and Group III+ base oil. The major advantages of the “polar GENESIS” is the record pour point, -52 °C, and pumpability, which by two times surpasses the requirements of the SAE international standard. The product ensures an easy start of the engine at extremely low temperatures. Considering that the vehicles’ engines were being shut down overnight to save fuel, these oil qualities were invaluable.Teboil Hypoid SAE 75W-90 T/M 4/5 synthetic transmission oil classified as API GL-4/5 is intended for lubrication of gearboxes of passenger cars and commercial vehicles. The demands of a mechanical five-speed gearbox and axle gear of all-terrain vehicles were comfortably met by the product, securing a reliable gearbox operation in a wide temperature and load range.The choice of anti-freeze for radiators working at ultra-low temperatures is a major challenge. It is important that the liquid reliably protects the cooling system from potential damage. Teboil Glycold XL, a premium class anti-freeze concentrate, developed on the basis of monoethylene glycol, lived up to expectations. LUKOIL SYNTHOFLEX 2-100 grease was used for lubricating hub bearings. This is a synthetic plastic grease, used in a wide temperature range, as well as at high speeds, for example, in bearings of electric motors, and generators demanding a low friction factor, zero wear and a lengthy service time “without additional greasing”. It possesses highly protective properties, dynamic flexibility, and is able to operate in a wide temperature range, from -50 °C to +180 °C. This unique product, made on the basis of synthetic base oil, lithium complex thickener and an advanced additives package is LUKOIL’s latest development.

O U R E N G I N E O I L S AVA I LA B L E O N E B AY

LUKOIL Lubricants Company has become Russia’s first lubricants producer to offer engine oils on eBay, one of the world’s leading online marketplaces.The trading platform’s European website ebay.de features GENESIS, LUXE and AVANTGARDE ULTRA product lines of LUKOIL engine oils for passenger cars and trucks. Today, these products are available online to buyers in Austria and Germany. In a year’s time, LUKOIL lubricants will be available to motorists throughout the entire European Union.“LUKOIL has been vigorously promoting online sales of its lubricants. This year, the company has launched sales on eBay, and opened its own Internet stores in Europe and Mexico, located at lukoil-shop.eu and lukoil-shop.mx. Our products are already available online to buy-ers in more than 30 countries around the globe. All this is part of the strategy to expand our business internationally and implement digital transformation of the Company. We strive to enter all key markets and all efficient sales channels,” noted LUKOIL Lubricants Company general director Kirill Vereta.

LUKOIL’s lubricants and bitumen businesses have adopted the Robotic Process Automation (RPA) system. “Virtual robots” will increase the speed and improve the quality of services pro-vided to corporate clients – the new technol-ogy will help the company accelerate multiple times the completion of standard trading op-erations on a 24/7 basis. The system will also help relieve workers of repetitive mundane tasks and switch them to intellectual work.The company successfully carried out a pilot project to use an RPA programmed robot to process lubricant orders, prepare and send journal vouchers to retail chains and fran-chised workshops in Russia. Having summed up the project’s results, in 2019 LUKOIL Lubricants Company is beginning a phased implementation of the RPA technology in all divisions. The use of robotized automation will be-come a part of digital transformation of LUKOIL’s business operations, in addition to Internet-based product-ordering services, automated product-shipping systems, online tank monitoring, and equipment monitoring at partners’ facilities, as well as other advanced solutions.

DIGITAL TRANSFORMATION

NEWS / LUKOIL LUBRICANTS / JUNE 2019

BITUMEN INNOVATIONS FOR RUSSIAN ROADS AT RIF 2019

During the Russian Investment Forum in Sochi (Feb. 14-15), LUKOIL unveiled a pro-gram for innovative development of the bitumen materials business ran by LUKOIL Lubricants Company. In the near future, the Company plans to significantly expand the bitumen product range, and continue development of advanced, extended service life materials, which are used in road construction.The Company introduced a new generation of bitumen products at the event, and presented Russia’s largest R&D center for development and testing of road construc-tion materials. LUKOIL also signed agreements on R&D cooperation with Avtodor and RosdorNII.“The Company’s developments take into account the specifics of road traffic and the climates of all Russian regions, as well as the different climates in foreign countries. Due to increased durability of these materials over the long term, their use will be more economically beneficial. Together with leading industry players such as Avtodor we will be able to efficiently implement innovations and improve quality of traffic arteries,” said LUKOIL Lubricants Company general director Kirill Vereta.“The creation of new bituminous materials for road construction will be of great im-portance for Russia’s socio-economic development. We intend to maximize the bene-fits of advanced construction technologies and innovative materials. Our partnership with LUKOIL on R&D and technical issues will aim to increase the lifespan of Russian roads,” said Avtodor board chairman Vyacheslav Petushenko.

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COMPANY PUTS FOCUS ON TECHNOLOGY LEADERSHIP