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Pjsc Lukoil LSE:LKOH London Ordinary Share RU0009024277 ORD RUB0.025
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  0.00 0.0% 56.2184 0.00 0.00 0.00 0.00 0.00 0.00 01:00:00
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Oil & Gas Producers - - - - 0

PJSC LukOil Report on Payments to Govts

27/06/2019 11:27am

UK Regulatory (RNS & others)


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PJSC LukOil

27 June 2019

PJSC LUKOIL

LEI 549300LCJ1UJXHYBWI24

Report on Payments to Governments for the year 2018

Moscow

June 2019

Underlying Principles

   1.1   Regulation and Scope of the Report 

This consolidated report on payments to governments (hereinafter, the "Report") was prepared by PJSC LUKOIL pursuant to Cl. 4.3 of the Disclosure Guidance and Transparency Rules of the UK Financial Conduct Authority in relation to the minerals exploration, development and production activities (hereinafter, the "extractive activities"). This Report includes the payments made during the financial year ended at 31 December 2018 in favor of the governments only on behalf of the LUKOIL Group companies (hereinafter, "the Group") (see Section 1.5 hereof) that conduct extractive activities, and does not include the payments made by the LUKOIL Group companies that do not conduct such activities.

The Report contains the following:

) information on all the respective payments the Group is responsible for made by the Group companies to the governments;

b) information on all the respective payments to the governments, if a Group company participates in the project as the operator.

Should the respective payments be made by the third party operator, such payments are not included in the Report.

The Report is based on the provision that the extractive activities will be ceased as the resource (for instance, oil) is transported from the extraction point to the immediate sales point (or the place where it can be marketed for the first time). Thus, export or transportation of oil, gas or other minerals is not covered by the Report requirements.

   1.2   Currency of the Report 

The presentation currency of the Report, as well as that of PJSC LUKOIL's consolidated financial statements prepared in accordance with the International Financial Reporting Standards (hereinafter, "IFRS") is the Russian ruble. The financial values presented in the Russian rubles were rounded to the nearest million.

The payments in foreign currencies were translated into the Russian rubles at the annual average exchange rate.

   1.3   Terms: Government 

For the purposes of the Report the term "government" means any national, federal and local authorities, ministries and agencies authorized to collect taxes, budgetary and other payments pursuant to the applicable laws in effect as of the time a contribution or payment becomes due. In the context of this Report the governments also include organizations, commercial enterprises and other legal entities authorized to collect taxes, charges and other payments in favor of the governments.

   1.4   Terms: Payment 

The Report includes all direct, indirect and non-monetary (in kind) forms of payments made to the governments.

For the purposes of this Report "payment" includes:

a) Taxes levied on income, production or profit of the company (mineral extraction tax; profit tax, including the profit tax paid by PJSC LUKOIL for its production subsidiaries as part of the consolidated taxpayers' group; property tax; water tax; land tax; transport tax; social security taxes and contributions to governmental non-budgetary funds; regular subsoil use payments), except for those stated in point (i) below. Tax payments are reported net of refunds;

b) Royalties;

c) License fees and payments, rental fees, other considerations for licenses or concessions;

d) Signature, discovery and production bonuses;

e) Production entitlements of the government or its representative (mainly, host government's share of production in the reporting period derived from production sharing agreements);

f) Dividends (other than those specified in paragraph (k) below);

g) Payments for infrastructure improvement (except for social costs);

h) Other payments (state duties, pollution fees, payments under agreements with local authorities, etc.).

For the purposes of this Report the following payments are not considered payments to the governments:

i) Taxes on turnover (VAT, sales tax) or withholding taxes deducted from the source by an entity acting as a tax agent (personal income tax);

j) Fines and penalties on taxes paid to the budgets of different levels;

k) Dividends paid to the state shareholders (holders of shares) on the same terms as to the other shareholders;

l) Export duties or other payments related to minerals export and transportation;

m) The Group's expenses on field infrastructure development as part of service contracts reimbursable by the government.

No dividends (f) and infrastructure improvement (g) payments were made to the governments in 2018.

   1.5   Companies covered by the Report. 

For the purposes hereof the Group companies are its directly or indirectly controlled subsidiaries, as well as the shares under the production sharing agreements and the joint operations consolidated proportionally to the Group's share in the assets, liabilities, income and expenditures, where the party representing PJSC LUKOIL is an operator of such joint operations. Should such Group company not be the operator, but make payments to the governments on its behalf, it is included in the Report, and the respective payments are specified. The affiliates, joint ventures and joint operations consolidated using an equity method are not covered by the Report.

This Report is provided with a breakdown into:

a) Jurisdictions in which the Group conducts extractive activities;

b) Projects implemented as part of extractive activities.

For the purposes of this Report, the "project" means:

a) A legal entity engaged in extractive activities in the Russian Federation. This definition of the project as related to the activities in the Russian Federation is based on the existing taxation regime focused on a legal entity rather than on a separate field. Pursuant to the effective tax laws of the Russian Federation, only the mineral extraction tax may be determined for a separate field. All other taxes relate to a legal entity as a whole and cannot be broken down by separate fields.

b) Extractive activities as part of a particular project, contract, license, agreement or another legally binding agreement relating to the production outside the Russian Federation pursuant to which a Group company is obliged to make payments to foreign state authorities.

Thus, the payment information related to the Russian Group companies is given with a breakdown into legal entities, while that related to foreign companies - with a breakdown into projects and jurisdictions.

If a Russian Group company conducts different operations (including extractive activities), while a portion of the tax liabilities immediately related to the above operations cannot be singled out, then the whole aggregate tax payment is included in the Report.

   1.6   Materiality of the Amounts Included in the Report 

For the purposes of this Report the list of payments includes the payments which exceed, individually or in aggregate, 7.2 million of Russian rubles (around 86,000.00 GBP) within one financial year. If the total amount paid to a certain country does not exceed the above threshold, the payments made to such country are not included in the Report.

Table 1. Distribution of payments per jurisdiction and oil and gas project

 
                                                                                               Mln RUB 
====================================================================================================== 
   Taxes   Royalties   License payments      Government entitlement   Bonuses   Other payments   Total 
                                           to a portion of minerals 
                                                          extracted 
  ======  ==========  =================  ==========================  ========  ===============  ====== 
 
 
 Russia 
 OOO LUKOIL-AIK                     21,893        -      15           -     -       -    21,908 
                                  --------  -------  ------ 
 OOO LUKOIL-Western Siberia        435,225        -   1,022           -     -   2,514   438,761 
================================  --------  -------  ------  ==========  ====  ======  ======== 
 OOO LUKOIL-KMN                      6,785        -       -           -     -      68     6,853 
                                  --------  -------  ------ 
 OOO LUKOIL-Komi                   176,203        -     571           -     -     330   177,104 
================================  --------  -------  ------  ==========  ====  ======  ======== 
 LUKOIL-Nizhnevolzhskneft           52,044        -       -           -     -       -    52,044 
================================  --------  =======  ======                            ======== 
 OOO LUKOIL-PERM                   184,801        -     734           -     -     153   185,688 
                                  --------                   ==========  ====  ====== 
 OOO LUKOIL-Primoryeneftegaz            68        -       -           -     -       -        68 
================================  --------  =======  ======  ==========  ====  ======  ======== 
 OOO RITEK                          60,873        -     444           -     -     554    61,871 
================================  --------  =======  ======  ==========  ====  ======  ======== 
 OOO TURSUNT                           905        -       -           -     -       -       905 
                                  -------- 
 OOO UralOil                         6,896        -      38           -     -      30     6,964 
================================  --------  =======  ======  ==========  ====  ======  ======== 
 OOO Chumpassneftedobycha               47        -       -           -     -       -        47 
================================  ========  =======  ======  ==========  ====  ======  ======== 
 Uzbekistan 
 Khauzak-Kandym project                667    4,430       -    7,437(1)     -       -    12,534 
================================  ========  =======  ======  ==========  ====  ======  ======== 
 Gissar project                        285   12,890       -    5,113(2)     -       -    18,288 
================================  ========  =======  ======  ==========  ====  ======  ======== 
 Kazakhstan 
 Karachaganak project                7,254        -       -           -     -       -     7,254 
================================ 
 Egypt 
 WEEM project                            -        -       -    3,208(3)     -       -     3,208 
================================  ========  =======  ======  ==========  ====  ======  ======== 
 WEEM Extension project                  -        -       -      130(4)     -       -       130 
================================  ========  =======  ======  ==========  ====  ======  ======== 
 Iraq 
 West Qurna-2 project                1,199        -       -           -     -       -     1,199 
================================  ========  =======  ======  ==========  ====  ======  ======== 
 Mexico 
 Block 12 project                       26        -      35           -     -       -        61 
================================  ========  =======  ======  ==========  ====  ======  ======== 
 Block 28 project                        -        -       -           -   938      20       958 
================================  ========  =======  ======  ==========  ====  ======  ======== 
 Norway 
 LUKOIL Overseas North Shelf 
  AS (projects PL719 and PL858)      (766)        -       -           -     -       -     (766) 
================================  ========  =======  ======  ==========  ====  ======  ======== 
 TOTAL                             954,405   17,320   2,859   15,888(5)   938   3,669   995,079 
================================  ========  =======  ======  ==========  ====  ======  ======== 
 
 
 (1) Including the government's entitlement to a portion of minerals extracted in the amount equal to 
  the market price of 4,793 thousand barrels of oil equivalent; 
 (2) Including the government's entitlement to a portion of minerals extracted in the amount equal to 
  the market price of 3,821 thousand barrels of oil equivalent; 
 (3) Including the government's entitlement to a portion of minerals extracted in the amount equal to 
  the market price of 864 thousand barrels of oil equivalent; 
 (4) Including the government's entitlement to a portion of minerals extracted in the amount equal to 
  the market price of 35 thousand barrels of oil equivalent; 
 (5) The total amount includes the government's entitlement to a portion of minerals extracted in the 
  amount equal to the market price of 9,513 thousand barrels of oil equivalent. 
 

Table 2. Distribution of payments in jurisdictions per government

 
                                                                                               Mln RUB 
====================================================================================================== 
   Taxes   Royalties   License payments      Government entitlement   Bonuses   Other payments   Total 
                                           to a portion of minerals 
                                                          extracted 
  ======  ==========  =================  ==========================  ========  ===============  ====== 
 
 
 Russia 
 Federal Tax Service of the 
  Russian Federation                       945,100        -       -           -     -       -   945,100 
 Pension Fund of the Russian 
  Federation                                   337        -       -           -     -       -       337 
========================================  ========  =======  ======  ==========  ====  ======  ======== 
 Local land and property administration 
  authorities                                    -        -     784           -     -      21       805 
========================================  ========  =======  ======  ==========  ====  ======  ======== 
 Municipalities                                  -        -     562           -     -   1,996     2,558 
========================================  ========  =======  ======  ==========  ====  ======  ======== 
 Rosprirodnadzor (Federal 
  Service for Supervision of 
  Natural Resource Usage)                        -        -       -           -     -      88        88 
========================================  ========  =======  ======  ==========  ====  ======  ======== 
 Social Insurance Fund of 
  the Russian Federation                       303        -       -           -     -       8       311 
========================================  ========  =======  ======  ==========  ====  ======  ======== 
 Rosnedra (Federal Agency 
  for Subsoil Management)                        -        -     866           -     -     259     1,125 
========================================  ========  =======  ======  ==========  ====  ======  ======== 
 Ministry of Natural Resource 
  and Environmental Protection 
  of Komi Republic                               -        -     474           -     -       -       474 
========================================  ========  =======  ======  ==========  ====  ======  ======== 
 Federal autonomous institution 
  Main Department of State 
  Expertise                                      -        -       -           -     -     184       184 
========================================  ========  =======  ======  ==========  ====  ======  ======== 
 Other recipients                                -        -     138           -     -   1,093     1,231 
 Uzbekistan 
 Government of the Republic 
  of Uzbekistan                                  -        -       -   11,293(1)     -       -    11,293 
========================================  ========  =======  ======  ==========  ====  ======  ======== 
 State Tax Committee of the 
  Republic of Uzbekistan                       952   17,320       -           -     -       -    18,272 
========================================  ========  =======  ======  ==========  ====  ======  ======== 
 NHC Uzbekneftegaz                               -        -       -    1,257(2)     -       -     1,257 
 Kazakhstan                                                                                           - 
 State budget of the Republic 
  of Kazakhstan                              7,254        -       -           -     -       -     7,254 
 Egypt 
 To the government through 
  The Egyptian General Petroleum 
  Corporation (EGPC)                             -        -       -    3,208(3)     -       -     3,208 
========================================  ========  =======  ======  ==========  ====  ======  ======== 
 To the government through 
  Ganoub El Wadi Petroleum 
  Holding Co (GANOPE)                            -        -       -      130(4)     -       -       130 
========================================  ========  =======  ======  ==========  ====  ======  ======== 
 Iraq 
 General Commission of Tax                   1,199        -       -           -     -       -     1,199 
 Mexico                                                                             - 
 Comision Nacional de Hidrocarburos              -        -       -           -     -      20        20 
 Fondo Mexicano del Petróleo 
  para la Estabilización 
  y el Desarrollo                               26        -       -           -   938       -       964 
========================================  ========  =======  ======  ==========  ====  ======  ======== 
 Servicio de Administración 
  Tributaria                                     -        -      35           -             -        35 
 Norway 
 Norwegian Tax Administration                (766)        -       -           -     -       -     (766) 
 TOTAL                                     954,405   17,320   2,859   15,888(5)   938   3,669   995,079 
 
 
 (1) Including the government's entitlement to a portion of minerals extracted in the amount equal to 
  the market price of 7,864 thousand barrels of oil equivalent; 
 (2) Including the government's entitlement to a portion of minerals extracted in the amount equal to 
  the market price of 750 thousand barrels of oil equivalent; 
 (3) Including the government's entitlement to a portion of minerals extracted in the amount equal to 
  the market price of 864 thousand barrels of oil equivalent; 
 (4) Including the government's entitlement to a portion of minerals extracted in the amount equal to 
  the market price of 35 thousand barrels of oil equivalent; 
 (5) The total amount includes the government's entitlement to a portion of minerals extracted in the 
  amount equal to the market price of 9,513 thousand barrels of oil equivalent. 
 

PJSC LUKOIL Report on Payments to Governments for the year 2018 has been submitted to the National Storage Mechanism and will shortly be available for inspection at http://www.morningstar.co.uk/uk/NSM.

This Report can be also viewed at the Company's website at www.lukoil.com.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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