LUKOIL FS IFRS 4Q2021 Eng

PJSC LUKOIL
CONSOLIDATED FINANCIAL STATEMENTS
31 December 2021
PJSC LUKOIL
Consolidated Statement of Financial Position
(Millions of Russian rubles)
Note 31 December 2021 31 December 2020
Assets
Current assets
Cash and cash equivalents 6 677,482 343,832
Accounts receivable, net 7 741,872 370,271
Other current financial assets 12,289 8,350
Inventories 8 467,960 426,536
Prepaid taxes 9 133,326 78,822
Other current assets 10 116,228 48,649
Total current assets 2,149,157 1,276,460
Property, plant and equipment 12 4,263,130 4,264,474
Investments in associates and joint ventures 11 281,532 281,637
Other non-current financial assets 13 61,738 68,692
Deferred income tax assets 28 22,842 16,298
Goodwill and other intangible assets 15 44,342 50,159
Other non-current assets 42,008 33,859
Total non-current assets 4,715,592 4,715,119
Total assets 6,864,749 5,991,579
Liabilities and equity
Current liabilities
Accounts payable 16 786,463 597,932
Short-term borrowings and current portion of long-term debt 17 80,251 82,636
Taxes payable 19 282,191 142,458
Provisions 21, 22 24,367 27,136
Other current liabilities 20 71,408 35,497
Total current liabilities 1,244,680 885,659
Long-term debt 18 677,699 577,075
Deferred income tax liabilities 28 303,435 268,956
Provisions 21, 22 113,420 126,665
Other non-current liabilities 2,331 2,458
Total non-current liabilities 1,096,885 975,154
Total liabilities 2,341,565 1,860,813
Equity 23
Share capital 938 938
Treasury shares (85,879) (71,920)
Additional paid-in capital 39,398 39,298
Other reserves 280,351 296,641
Retained earnings 4,280,226 3,858,057
Total equity attributable to PJSC LUKOIL shareholders 4,515,034 4,123,014
Non-controlling interests 8,150 7,752
Total equity 4,523,184 4,130,766
Total liabilities and equity 6,864,749 5,991,579
President of PJSC LUKOIL Chief accountant of PJSC LUKOIL

Alekperov V.Y. Verkhov V.A.
The accompanying notes are an integral part of these consolidated financial statements.
7
PJSC LUKOIL
Consolidated Statement of Profit or Loss and Other Comprehensive Income
(Millions of Russian rubles, unless otherwise noted)
Note 2021 2020
Revenues
Sales (including excise and export tariffs) 32 9,435,143 5,639,401
Costs and other deductions
Operating expenses (509,192) (439,973)
Cost of purchased crude oil, gas and products (5,484,824) (3,000,916)
Transportation expenses (291,135) (292,899)
Selling, general and administrative expenses (215,190) (199,027)
Depreciation, depletion and amortisation (425,466) (405,440)
Taxes other than income taxes (1,308,882) (569,078)
Excise and export tariffs (214,433) (444,300)
Exploration expenses (7,076) (6,114)
Profit from operating activities 978,945 281,654
Finance income 25 16,519 13,051
Finance costs 25 (37,568) (44,122)
Equity share in income of associates and joint ventures 11 29,980 11,474
Foreign exchange gain (loss) 2,731 (26,110)
Other expenses 26 (23,643) (137,160)
Profit before income taxes 966,964 98,787
Current income taxes (163,807) (61,362)
Deferred income taxes (27,644) (20,792)
Total income tax expense 28 (191,451) (82,154)
Profit for the year 775,513 16,633
Profit for the year attributable to:
PJSC LUKOIL shareholders 773,442 15,175
Other comprehensive income, net of income taxes

Items that may be reclassified to profit or loss:
Foreign currency translation differences for foreign operations (20,263) 268,707
Items that will never be reclassified to profit or loss:
Change in fair value of equity instruments at fair value through other comprehensive
income 2,572 (767)
Remeasurements of defined benefit liability / asset of pension plan 22, 28 1,403 (1,423)
Other comprehensive (loss) income (16,288) 266,517
Total comprehensive income for the year 759,225 283,150
Total comprehensive income for the year
attributable to:
PJSC LUKOIL shareholders 757,152 281,675
Earnings per share
Profit for the year attributable to PJSC LUKOIL shareholders per share of common
stock (in Russian rubles): 23
Basic 1,185.60 23.31
Diluted 1,129.17 22.46
8
PJSC LUKOIL
Consolidated Statement of Changes in Equity
Total equity
Additional attributable to Non-
Share Treasury paid-in Other Retained PJSC LUKOIL controlling Total
capital shares capital reserves earnings shareholders interests equity
31 December 2020 938 (71,920) 39,298 296,641 3,858,057 4,123,014 7,752 4,130,766
Profit for the year - - - - 773,442 773,442 2,071 775,513
Other comprehensive
(loss) income - - - (16,290) - (16,290) 2 (16,288)
Total comprehensive
(loss) income (16,290) 773,442 757,152 2,073 759,225
Dividends on common
stock - - - - (360,316) (360,316) - (360,316)
Stock purchased - (13,959) - - - (13,959) - (13,959)
Equity-settled share-
based compensation plan - - - - 9,043 9,043 - 9,043
Changes in non-
controlling interests - - 100 - - 100 (1,675) (1,575)
31 December 2021 938 (85,879) 39,398 280,351 4,280,226 4,515,034 8,150 4,523,184
31 December 2019 968 (308,160) 39,277 30,141 4,203,138 3,965,364 8,085 3,973,449
Profit for the year - - - - 15,175 15,175 1,458 16,633
Other comprehensive
income - - - 266,500 - 266,500 17 266,517
Total comprehensive
income 266,500 15,175 281,675 1,475 283,150
Dividends on common
stock - - - - (258,389) (258,389) - (258,389)
Stock purchased - (2,026) - - - (2,026) - (2,026)
Equity-settled share-
based compensation plan - - - - 15,381 15,381 - 15,381
Obligation to repurchase
common shares - 120,988 - - - 120,988 - 120,988
Share capital reduction (30) 117,278 - - (117,248) - - -
Changes in non-
controlling interests - - 21 - - 21 (1,808) (1,787)
31 December 2020 938 (71,920) 39,298 296,641 3,858,057 4,123,014 7,752 4,130,766
9
PJSC LUKOIL
Consolidated Statement of Cash Flows
Note 2021 2020

Cash flows from operating activities
Profit for the year attributable to PJSC LUKOIL shareholders 773,442 15,175
Adjustments for non-cash items:
Depreciation, depletion and amortisation 425,466 405,440
Equity share in income of associates and joint ventures (29,980) (11,474)
Dry hole write-offs 5,488 4,425
Loss on disposals and impairments of assets 19,055 125,535
Income tax expense 191,451 82,154
Non-cash foreign exchange (gain) loss (2,595) 26,037
Finance income (16,519) (13,051)
Finance costs 37,568 44,122
Allowance for expected credit losses 9,091 5,811
Equity-settled share-based compensation plan 31,366 31,366
All other items, net (9,563) 5,538
Changes in operating assets and liabilities:
Trade accounts receivable (363,337) 128,139
Inventories (44,657) 37,868
Accounts payable 185,047 (69,305)
Other taxes 83,061 10,200
Other current assets and liabilities (44,010) (15,154)
Income tax paid (161,698) (57,250)
Dividends received 25,168 9,448
Interests received 12,770 11,550
Net cash provided by operating activities 1,126,614 776,574
Cash flows from investing activities
Acquisition of licences (337) (235)
Capital expenditures (433,042) (495,443)
Proceeds from sale of property, plant and equipment 4,417 657
Purchases of financial assets (2,630) (8,232)
Proceeds from sale of financial assets 5,073 12,323
Sale of subsidiaries, net of cash disposed 193 17
Sale of associates 83 312
Acquisitions of interests in the projects and subsidiaries, net of cash acquired (10,911) (1,040)
Acquisitions of associates (901) (1,128)
Net cash used in investing activities (438,055) (492,769)
Cash flows from financing activities
Proceeds from issuance of short-term borrowings 1,019 1,971
Principal repayments of short-term borrowings (11,112) (815)
Proceeds from issuance of long-term debt 187,361 108,796
Principal repayments of long-term debt (125,382) (171,980)
Interest paid (30,823) (39,100)
Dividends paid on Company common shares (357,672) (407,309)
Dividends paid to non-controlling interest shareholders (3,930) (3,589)
Financing received from non-controlling interest shareholders 134 47
Purchase of Company’s stock (13,958) (2,026)
Purchases of non-controlling interest (14) -
Net cash used in financing activities (354,377) (514,005)
Effect of exchange rate changes on cash and cash equivalents (532) 58,000
Net increase (decrease) in cash and cash equivalents 333,650 (172,200)
Cash and cash equivalents at beginning of year 343,832 516,032
Cash and cash equivalents at end of year 6 677,482 343,832
10
PJSC LUKOIL
Notes to Consolidated Financial Statements
Note 1. Organisation and environment
The primary activities of PJSC LUKOIL (the “Company”) and its subsidiaries (together, the “Group”) are oil
exploration, production, refining, marketing and distribution. The Company is the ultimate parent entity of this
vertically integrated group of companies.
The Group was established in accordance with Presidential Decree No. 1403, issued on 17 November 1992.
Under this decree, on 5 April 1993, the Government of the Russian Federation transferred to the Company 51%
of the voting shares of fifteen enterprises. Under Government Resolution No. 861 issued on
1 September 1995, a further nine enterprises were transferred to the Group during 1995. Since 1995, the Group
has carried out a share exchange programme to increase its shareholding in each of the twenty-four founding
subsidiaries to 100%.
From formation, the Group has expanded substantially through consolidation of its interests, acquisition of new
companies and establishment of new businesses.
Business and economic environment
In July – September 2014, the United States (“US”), the European Union (“EU”) and several other countries
imposed a set of sanctions on Russia, including sectoral sanctions which affect several Russian oil and gas
companies. The US Department of the Treasury has placed the Company onto the Sectoral Sanctions
Identifications List subject to Directive 4 of the Office of foreign assets control (OFAC). Directive 4 prohibits
US companies and individuals from providing, exporting, or re-exporting directly or indirectly, goods, services
(except for financial services), or technology in support of exploration or production for deepwater, Arctic
offshore or shale projects that have the potential to produce oil in the Russian Federation, or in maritime area
spreading from the Russian territory and claimed by the Russian Federation.
From January 2018 (based on acts adopted in August – October 2017), the US expanded abovementioned
sanctions to include certain categories of international oil projects initiated on or after 29 January 2018 in any
part of the world, in which companies placed on the Sectoral Sanctions Identifications List subject to Directive 4
(including the Company) have an ownership interest of 33% or more, or ownership of a majority of the voting
interests. Management believes these sanctions do not have a material adverse effect on the current or planned
Group’s oil projects.
In recent days, due to the events in Ukraine, the US has imposed additional sanctions on the Russian government,
as well as Russian entities and individuals. This includes full blocking sanctions on certain Russian state-owned
financial institutions. There have been restrictions put in place on the opening and maintenance of, or transacting
with, certain correspondent and payable-through accounts at foreign financial institutions. Additionally, there
have been new debt and equity restrictions imposed on major state-owned and private entities and Russian
sovereign debt. Similarly, the UK and EU have announced additional sanctions in recent days. The UK has
imposed blocking and asset freezing sanctions on certain Russian banks, entities, and individuals operating in
financial and defense sectors. The EU has designated certain Russian government officials, entities (including
Russian banks), and other individuals, and imposed restrictions on capital markets, loans, and credit that target
Russian sovereign debt. Moreover, there is a risk that further sanctions may be introduced. This may have
significant adverse impact on Russia’s economy. These events have led to depreciation of the Russian ruble and
increased volatility and uncertainty in the Russian economy.
At the same time, it is a stated goal to minimise the impact of these sanctions on energy companies and
consumers. The US has specifically authorised certain transactions related to the energy sector, highlighting the
need for continued, legitimate energy-related trade.
The consolidated financial statements reflect management’s assessment of the impact of the business
environment on the operations and the financial position of the Group. The future business environment may
differ from management’s assessment. Management will continue monitoring the situation closely to ensure
prompt reaction to the rapidly changing environment.
11
PJSC LUKOIL
Note 2. Basis of preparation
Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards (“IFRS”).
These consolidated financial statements have been prepared on a historical cost basis, except certain assets and
liabilities measured at fair value.
The consolidated financial statements were authorised by the President of the Company on 2 March 2022.
Functional and presentation currency
The functional currency of each of the Group’s consolidated companies is the currency of the primary economic
environment in which the company operates. The management has analysed factors that influence the choice of
functional currency and has determined the functional currency for each Group company. For the majority of
them the functional currency is the local currency. The functional currency of the Company is the Russian ruble
(“RUB”).
The presentation currency of the Group is the RUB. All financial information presented in the RUB has been
rounded to the nearest million, except when otherwise indicated.
The results and financial position of Group companies whose functional currency is different from the
presentation currency of the Group are translated into presentation currency using the following procedures.
Assets and liabilities are translated at period-end exchange rates, income and expenses are translated at rates
which approximate actual rates at the date of the transaction. Resulting exchange differences are recognised in
other comprehensive income.
Note 3. Summary of significant accounting policies
Principles of consolidation
These consolidated financial statements include the financial position and results of operations of the Company
and controlled subsidiaries. A company controls an investee when it is exposed, or has rights, to variable returns
from its involvement with the investee and has the ability to affect those returns through its power over the
investee.
Investments in companies that the Group does not control, but where it has the ability to exercise significant
influence (Group’s interests are between 20% and 50%) over operating and financial policies, are accounted for
using the equity method. These investments include the Group’s interests in associates, joint ventures and
investments where the Company owns the majority of the voting interest but has no control. Associates are those
entities in which the Group has significant influence, but not control or joint control, over the financial and
operating policies. A joint venture is an arrangement in which the Group has joint control, whereby the Group
has rights to the net assets of the arrangement.
Interests in associates and joint ventures are accounted for using the equity method and are recognised initially
at cost. The cost of the investment includes transaction costs. The consolidated financial statements include the
Group’s share of the profit or loss and other comprehensive income of equity accounted investees, after
adjustments to align the accounting policies with those of the Group, from the date that significant influence or
joint control commences until the date that significant influence or joint control ceases. When the Group’s share
of losses exceeds its interest in an equity-accounted investee, the carrying amount of that interest including any
long-term investments, is reduced to zero, and the recognition of further losses is discontinued, except to the
extent that the Group has an obligation or has made payments on behalf of the investee.
12
PJSC LUKOIL
Note 3. Summary of significant accounting policies (continued)
Group’s share in jointly controlled operations is recognised in the consolidated financial statements based on its
share in assets, liabilities, income and expenses. Jointly controlled operations are arrangements in which parties
that have joint control over operating or financial policies have respective rights to use assets and responsibility
for liabilities in the arrangements.
Certain of Group’s unincorporated joint exploration and production activities are conducted through
arrangements that are not jointly controlled, either because unanimous consent is not required among all parties
involved, or no single group of parties has joint control over the activity. Such activities where control can be
achieved through agreement between more than one combination of involved parties are considered to be outside
the scope of IFRS 11 Joint Arrangements. In relation to its interests in these arrangements, the Group recognises
its share of any assets, liabilities, income and expenses.
Business combinations
For each business combination the Group measures goodwill at the acquisition date as:
 the fair value of the consideration transferred; plus

 the recognised amount of any non-controlling interests in the acquiree; plus
 if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the
acquire; less
 the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities
assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss. The
consideration transferred does not include amounts related to the settlement of previous transactions. Such
amounts are generally recognised in profit or loss.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent
consideration is classified as equity, it is not remeasured and settlement is accounted for within equity.
Otherwise, subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.
Non-controlling interests
Non-controlling interests are measured at their proportionate share of the fair value of acquiree’s identifiable net
assets at the acquisition date.
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity
transactions.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group
transactions, are eliminated during the process of consolidation. Unrealised gains arising from transactions with
equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the
investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there
is no evidence of impairment.
13
PJSC LUKOIL
Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at
exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies
are translated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on
monetary items is the difference between amortised cost in the functional currency at the beginning of the period,
adjusted for effective interest and payments during the period, and the amortised cost in foreign currency
translated at the exchange rate at the end of the reporting period. Non-monetary assets and liabilities
denominated in foreign currencies that are measured at fair value are translated to the functional currency at the
exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are
measured based on historical cost are translated using the exchange rate at the date of the transaction. Foreign
currency differences arising in translation are recognised in profit or loss, except for differences arising on the
translation of financial assets measured at fair value through other comprehensive income which are recognised
in other comprehensive income.
Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
acquisition, are translated to the presentation currency at the exchange rates at the reporting date. The income
and expenses of foreign operations are translated to the presentation currency at exchange rates at the dates of
the transactions. Foreign currency differences are recognised in other comprehensive income, and presented in
the foreign currency translation reserve in equity. However, if the foreign operation is a non-wholly owned
subsidiary, then the relevant proportionate share of the translation difference is allocated to non-controlling
interests. When a foreign operation is disposed of in a way that control, significant influence or joint control is
lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or
loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary
that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is
reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate
or joint venture that includes a foreign operation while retaining significant influence or joint control, the
relevant proportion of the cumulative amount is reclassified to profit or loss. When the settlement of a monetary
item receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable
future, foreign exchange gains and losses arising from such item form part of a net investment in a foreign
operation and are recognised in other comprehensive income, and presented in the translation reserve in equity.
Revenues
Revenues are recognised when a customer obtains control of the goods or services which usually occurs when
the title is passed, provided that risks and rewards of ownership are assumed by the customer and the customer
obtains obligation to pay for the goods or services.
Revenues include excise on petroleum products’ sales and duties on export sales of crude oil and petroleum
products.
Revenue from the production of oil and natural gas in which the Group has an interest with other producers is
recognised based on the Group’s working interest and the terms of the relevant production sharing contracts.
Revenues from non-cash sales are recognised at the fair value of the crude oil and petroleum products sold.
If the fair value of the non-cash consideration cannot be reasonably estimated, the consideration shall be
measured indirectly by reference to the stand-alone selling price of the goods or services promised to the
customer in exchange for the consideration.
14
PJSC LUKOIL
Cash and cash equivalents
Cash and cash equivalents include all highly liquid investments with an original maturity of three months or
less.
Financial assets
The Group classifies non-derivative financial assets into the following categories, as appropriate: measured at
amortised cost, fair value through other comprehensive income and fair value through profit or loss.
A financial asset is measured at amortised cost if both of the following conditions are met:
 the financial asset is held within a business model whose objective is to hold financial assets in order to
collect contractual cash flows;
 the contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
A financial asset is measured at fair value through other comprehensive income if both of the following
conditions are met:
 the financial asset is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets;
 the contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
A financial asset is measured at fair value through profit or loss unless it is measured at amortised cost or at fair
value through other comprehensive income. However, the Company may make an irrevocable election at initial
recognition for particular instruments in equity instruments that would otherwise be measured at fair value
through profit or loss to present subsequent changes in fair value in other comprehensive income.
The Group initially recognises as financial assets loans and receivables on the date when they are originated and
debt securities on the date when they are acquired. All other financial assets are recognised initially on the trade
date at which the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or
it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which
substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in
transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.
Non-derivative financial liabilities
The Group classifies non-derivative financial liabilities into the other financial liabilities category. Such
financial liabilities are recognised initially at fair value less any directly attributable transaction costs.
Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective
interest method. Other financial liabilities comprise loans and borrowings, bank overdrafts, and trade and other
payables.
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or
expire.
15
PJSC LUKOIL
Derivative instruments
The Group uses various derivative financial instruments to hedge its commodity price risks. Such derivative
financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
into and subsequently re-measured at fair value. Resulting realised and unrealised gains or losses are presented
in profit or loss on a net basis. The Group does not use hedge accounting.
Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories includes
expenditure incurred in acquiring the inventories, production or conversion costs and other delivery costs. In the
case of manufactured inventories, cost includes an appropriate share of production overheads based on normal
operating capacity. Net realisable value is the estimated selling price in the ordinary course of business, less the
estimated costs of completion and selling expenses.
The disposal of finished goods is accounted for using the first-in first-out principle, the disposal of other
inventories by using the “average cost” method.
Property, plant and equipment
Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated
impairment losses. The cost of property, plant and equipment of major subsidiaries at 1 January 2014, the
Group’s date of transition to IFRSs, was determined by reference to its fair value at that date.
The Group recognises exploration and evaluation costs using the successful efforts method. Under this method,
all costs related to exploration and evaluation are capitalised and accounted for as construction in progress in
the amount incurred less impairment (if any) until the discovery (or absence) of economically feasible oil and
gas reserves has been established. When the technical feasibility and commercial viability of reserves extraction
is confirmed, exploration and evaluation assets should be reclassified into property, plant and equipment. Prior
to reclassification these assets should be reviewed for impairment and impairment loss (if any) expensed to the
financial results. If the exploration and evaluation activity is evaluated as unsuccessful, the costs incurred should
be expensed.
Depreciation, depletion and amortisation of capitalised costs of oil and gas properties is calculated using the
unit-of-production method based upon proved reserves for the cost of property acquisitions and proved
developed reserves for exploration and development costs.
Depreciation, depletion and amortisation of the capitalised costs of oil and gas properties related to risk service
contract is calculated using a depletion factor calculated as the ratio of value of the applicable crude oil
production for the period to the total capitalised costs to be recovered.
Depreciation of assets not directly associated with production is calculated on a straight-line basis over the
economic lives of such assets, estimated to be in the following ranges:
Buildings and constructions 5 – 40 years

Machinery and equipment 3 – 20 years
Depreciation methods and useful lives are reviewed at each reporting date and adjusted if appropriate.
Production and related overhead costs are expensed as incurred.
In addition to production assets, certain Group companies also maintain and construct social assets for the use
of local communities. Such assets are capitalised only to the extent that they are expected to result in future
economic benefits to the Group. If capitalised, they are depreciated over their estimated economic lives.
16
PJSC LUKOIL
Impairment of non-current non-financial assets
The carrying amounts of the Group’s non-current non-financial assets, other than inventories and deferred tax
assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any
such indication exists, then the asset’s recoverable amount is estimated. For goodwill and intangible assets that
have indefinite lives or that are not yet available for use, the recoverable amount is estimated each year at the
same time. For the purpose of impairment testing, assets that cannot be tested individually are grouped together
into the smallest group of assets that generates cash inflows from continuing use that are largely independent of
the cash inflows of other assets or related cash-generating unit (“CGU”).
Subject to an operating segment ceiling test, for the purposes of goodwill impairment testing, CGUs to which
goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects
the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill acquired in a business
combination is allocated to group of CGUs that are expected to benefit from the synergies of the combination.
The Group’s corporate assets do not generate separate cash inflows and are utilised by more than one CGU.
Corporate assets are allocated to CGUs on a reasonable and consistent basis and tested for impairment as part
of the testing of the CGU to which the corporate asset is allocated. The recoverable amount of an asset or CGU
is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset or CGU.
An impairment loss is recognised if the carrying amount of an asset or its related CGU exceeds its estimated
recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect
of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (group of
CGUs), and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata
basis.
Significant unproved properties are assessed for impairment individually on a regular basis and any estimated
impairment is charged to expense.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses
recognised in prior periods are assessed at each reporting date. An impairment loss is reversed if there has been
a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined,
net of depreciation or amortisation, if no impairment loss had been recognised.
Asset retirement obligations
The Group records the present value of the estimated future costs to settle its legal obligations to abandon,
dismantle or otherwise retire tangible non-current non-financial assets in the period in which the liability is
incurred. A corresponding increase in the carrying amount of the related non-current non-financial assets is also
recorded. Subsequently, the liability is accreted for the passage of time and the related asset is depreciated using
the same method as asset to be abandoned, dismantled or otherwise retired. Changes in the estimates of asset
retirement obligations (“ARO”) occur as a result of changes in cost and timing of liquidation or change of
discount rates and are accounted as part of cost of property, plant and equipment in the current period.
Lease
A single, on-balance sheet lease accounting model is used by lessees. A contract is, or contains, a lease if it
conveys a right to control the use of an identified asset for a period of time in exchange for consideration. A
lessee recognises a right-of-use asset representing its right to use the underlying asset and a lease liability
representing its obligation to make lease payments. The Group has elected not to apply provided exemptions for
short-term leases and leases for which the underlying asset is of low value. Lessors classify leases as finance or
operating leases.
17
PJSC LUKOIL
The Group recognises a depreciation charge for right-of-use assets and interest expense on lease liabilities.
Assets classified as held for sale
Assets classified as held for sale are separately presented in the consolidated statement of financial position and
reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The
assets and liabilities classified as held for sale are presented in current assets and liabilities of the consolidated
statement of financial position.
Income taxes
Deferred income tax assets and liabilities are recognised in respect of the future tax consequences attributable
to temporary differences between the carrying amounts of existing assets and liabilities for the purposes of the
consolidated statement of financial position and their respective tax bases. But as opposed to deferred tax
liabilities, deferred tax assets are recognised only to the extent that it is probable that taxable profit will be
available against which the deductible temporary difference can be utilised. Similarly a deferred tax asset shall
be recognised for the carryforward of unused tax losses to the extent that it is probable that future taxable profit
will be available. At the end of each reporting period realisability of deferred tax assets (both recognised and
unrecornised) should be reassessed. In case of existence of previously unrecognised deferred tax assets, they can
be recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset
to be recovered.
Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to reverse and the assets be recovered
and liabilities settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognised
in profit or loss in the reporting period which includes the enactment date.
Employee benefits
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Group’s
net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the
amount of future benefit that employees have earned in return for their service in the current and prior periods.
That benefit is discounted to determine its present value and the fair value of any plan assets are deducted. The
discount rate is the yield at the reporting date on government bonds that have maturity dates approximating the
terms of the Group’s obligations and that are denominated in the same currency in which the benefits are
expected to be paid.
The calculation is performed annually by a qualified actuary. When the calculation results in a potential asset
for the Group, the recognised asset is limited to the present value of economic benefits available in the form of
any future refunds from the plan or reductions in future contributions to the plan. In order to calculate the present
value of economic benefits, consideration is given to any minimum funding requirements that apply to any plan
in the Group. An economic benefit is available to the Group if it is realisable during the life of the plan, or on
settlement of the plan liabilities.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on
plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised
immediately in other comprehensive income. The Group determines the net interest expense (income) on the net
defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit
obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into
account any changes in the net defined benefit liability (asset) during the period as a result of contributions and
benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in
profit or loss.
18
PJSC LUKOIL
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates
to past service or the gain or loss on curtailment is recognised immediately in profit or loss. The Group recognises
gains and losses on the settlement of a defined benefit plan when the settlement occurs.
Treasury shares
Purchases by Group companies of the Company’s outstanding shares are recorded at cost and classified as
treasury shares within equity. Shares shown as Authorised and Issued include treasury shares. Shares shown as
Outstanding do not include treasury shares.
Earnings per share
Basic earnings per share is computed by dividing profit available for distribution to common shareholders of the
Company by the weighted-average number of common shares outstanding during the reporting period. Diluted
earnings per share is determined by adjusting profit available for distribution to common shareholders of the
Company and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential
ordinary shares, which comprise convertible notes and share options granted to employees.
Provisions and contingencies
Certain conditions may exist as of the consolidated financial statements date, which may result in losses to the
Group but the impact of which will only be resolved when one or more future events occur or fail to occur.
Liabilities of the Group with high level of probability of loss are recognised in the consolidated financial
statements as provisions. Liabilities of the Group with the level of probability that do not meet the conditions in
order to be recognised as provisions are considered to be contingent liabilities. Contingent liabilities are not
recognised in the consolidated financial statements but are disclosed in the notes to the consolidated financial
statements if probability of disposal of certain resources aimed to settle this liability is not remote. If probability
of disposal of certain resources is remote the information about such contingencies is not disclosed.
Environmental expenditures
Estimated losses from environmental remediation obligations are generally recognised no later than completion
of remedial feasibility studies. Group companies accrue for losses associated with environmental remediation
obligations when such losses are probable and reasonably estimable. Such accruals are adjusted as further
information becomes available or circumstances change.
Share-based payments
The Group accounts for cash-settled share-based payment awards to employees at fair value on the grant date
and as of each reporting date. Expenses are recognised over the vesting period. Equity-settled share-based
payment awards to employees are valued at fair value on the grant date and expensed over the vesting period.
Changes in accounting policies and disclosures
The accounting policies adopted are consistent with those of the previous financial year except for the adoption
of the amendments to the existing standards effective as of 1 January 2021. These amendments related to interest
rate benchmark reform and did not have a significant impact on the consolidated financial statements:
 amendments to IFRS 9 Financial Instruments;

 amendments to IFRS 39 Financial Instruments: Recognition and Measurement;
 amendments to IFRS 16 Leases;
 amendments to IFRS 4 Insurance Contracts.
19
PJSC LUKOIL
Note 4. Use of estimates and judgments
Preparation of the consolidated financial statements in accordance with IFRS requires management to make
judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts
of assets, liabilities, income and expenses. Actual results may differ from those estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimates are revised and in any future periods affected.
Critical judgments in applying accounting policies that have the most significant effect on the amounts
recognised in the condensed interim consolidated financial statements are the following:
 estimation of oil and gas reserves;

 estimation of useful lives of property, plant and equipment;
 impairment of non-current assets;
 assessment and recognition of provisions and contingent liabilities;
 definition of leases.
Oil and gas reserves estimates that are used for the reporting purposes are made in accordance with the
requirements adopted by U.S. Securities and Exchange Commission. Estimates are reassessed on an annual
basis.
Note 5. New standards and interpretations not yet adopted
The following amendments to the standards are effective for annual periods beginning 1 January 2022 and after,
available for early adoption:
 Onerous contracts – Cost of Fulfilling a Contract (Amendments to IAS 37 Provisions, Contingent

Liabilities and Contingent Assets);
 Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16 Property, Plant
and Equipment);
 Reference to Conceptual Framework (Amendments to IFRS 3 Business Combinations);
 Classification of Liabilities as Current or Non-current (Amendments to IAS 1 Presentation of Financial
Statements);
 Disclosure of Accounting Policies (Amendments to IAS 1 Presentation of Financial Statements and
IFRS Practice Statement 2 Making Materiality Judgements);
 Definition of Accounting Estimate (Amendments to IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors);
 Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction (Amendments to
IAS 12 Income Taxes).
However, the Group did not make an early adoption of the amended standards in the preparation of these
consolidated financial statements, which are not expected to have a significant impact on the Group's
consolidated financial statements.
Note 6. Cash and cash equivalents
31 December 2021 31 December 2020

Cash held in RUB 70,508 16,537
Cash held in US dollars 526,807 256,841
Cash held in EUR 66,268 59,009
Cash held in other currencies 13,899 11,445
Total cash and cash equivalents 677,482 343,832
20
PJSC LUKOIL
Note 7. Accounts receivable, net

Trade accounts receivable (net of allowances of 36,028 million RUB and 32,762 million RUB
at 31 December 2021 and 2020, respectively) 727,934 357,159
Other current accounts receivable (net of allowances of 4,485 million RUB and
4,930 million RUB at 31 December 2021 and 2020, respectively) 13,938 13,112
Total accounts receivable, net 741,872 370,271
Note 8. Inventories

Crude oil and petroleum products 415,612 373,290
Materials for extraction and drilling 25,260 25,582
Materials and supplies for refining 4,008 4,681
Other goods, materials and supplies 23,080 22,983
Total inventories 467,960 426,536
Note 9. Prepaid taxes

Income tax 16,810 17,983
VAT recoverable 14,735 12,940
Excise tax recoverable 35,804 8,350
Export duties 13,512 8,009
VAT 46,240 26,407
Total prepaid taxes 133,326 78,822
Note 10. Other current assets

Advance payments 57,124 15,904
Prepaid expenses 24,162 21,622
Other assets 34,942 11,123
Total other current assets 116,228 48,649
Note 11. Investments in associates and joint ventures
Carrying value of investments in associates and joint ventures:
Ownership
Name of the company Country 31 December 2021 31 December 2020 31 December 2021 31 December 2020
Joint ventures:
Tengizchevroil (TCO) Kazakhstan 5.0% 5.0% 153,918 146,611
Caspian Pipeline Consortium
(CPC) Kazakhstan 12.5% 12.5% 53,183 56,027
South Caucasus Pipeline
Company (SCPC) Azerbaijan 10.0% 10.0% 33,697 34,663
Associates:
Associates 40,734 44,336
Total 281,532 281,637
TCO is engaged in development of hydrocarbon resources in Kazakhstan. The Group has classified its interest
in TCO as a joint venture as it has rights to the net assets of the arrangement.
21
PJSC LUKOIL
Note 11. Investments in associates and joint ventures (continued)
31 December 2021 TCO CPC SCPC Others Associates Total

Current assets 253,674 53,194 34,317 - 46,285 387,470
Non-current assets 3,634,400 417,325 351,172 - 214,144 4,617,041
Current liabilities 263,141 41,799 29,454 - 30,815 365,209
Non-current liabilities 1,228,935 3,256 19,061 - 129,247 1,380,499
Net assets (100%) 2,395,998 425,464 336,974 - 100,367 3,258,803
Share in net assets 153,918 53,183 33,697 - 40,734 281,532
31 December 2020 TCO CPC SCPC Others Associates Total

Current assets 185,179 49,950 17,923 - 37,049 290,101
Non-current assets 3,398,159 449,020 363,283 - 222,001 4,432,463
Current liabilities 153,329 39,529 17,584 - 22,011 232,453
Non-current liabilities 1,228,347 11,224 16,995 - 127,928 1,384,494
Net assets (100%) 2,201,662 448,217 346,627 - 109,111 3,105,617
Share in net assets 146,611 56,027 34,663 - 44,336 281,637
2021 TCO CPC SCPC Others Associates Total

Revenues 1,171,624 159,904 80,204 - 144,753 1,556,485
Net income, 100% 356,088 64,411 44,835 - 6,982 472,316
Share in net income 15,216 8,051 4,484 - 2,229 29,980
2020 TCO CPC SCPC Others Associates Total

Revenues 657,608 151,648 50,221 4,627 74,160 938,264
Net income (loss), 100% 113,342 57,684 24,251 1,402 (6,194) 190,485
Share in net income (loss) 3,407 7,210 2,425 701 (2,269) 11,474
Note 12. Property, plant and equipment
Exploration Refining, marketing

and production assets and distribution assets Other assets Total
Cost
31 December 2020 5,433,264 1,756,650 77,006 7,266,920
Additions 328,139 130,202 3,059 461,400
Acquisitions 1,909 - - 1,909
Disposals (39,402) (35,387) (1,669) (76,458)
Foreign currency translation differences 10,568 (42,898) (68) (32,398)
Other (31,720) 2,078 (2,091) (31,733)
31 December 2021 5,702,758 1,810,645 76,237 7,589,640
Depreciation and impairment
31 December 2020 (2,193,734) (802,877) (22,368) (3,018,979)
Depreciation for the period (304,135) (115,827) (3,512) (423,474)
Impairment loss (1,002) (24,491) (1,571) (27,064)
Impairment reversal 11,273 15,361 19 26,653
Disposals 19,819 32,433 1,111 53,363
Foreign currency translation differences (6,524) 22,939 88 16,503
Other 21,655 1,266 628 23,549
31 December 2021 (2,452,648) (871,196) (25,605) (3,349,449)
Advance payments for property, plant
and equipment
31 December 2020 10,218 5,757 558 16,533
31 December 2021 17,812 4,854 273 22,939
Carrying amounts
31 December 2020 3,249,748 959,530 55,196 4,264,474
31 December 2021 3,267,922 944,303 50,905 4,263,130
22
PJSC LUKOIL
Note 12. Property, plant and equipment (continued)

Cost
31 December 2019 4,795,674 1,510,515 76,246 6,382,435
Additions 424,751 144,941 4,864 574,556
Acquisitions 1,209 - - 1,209
Disposals (37,156) (42,014) (6,592) (85,762)
Foreign currency translation differences 272,259 143,409 2,704 418,372
Other (23,473) (201) (216) (23,890)
31 December 2020 5,433,264 1,756,650 77,006 7,266,920
Depreciation and impairment
31 December 2019 (1,766,575) (589,636) (21,153) (2,377,364)
Depreciation for the period (278,237) (135,596) (3,705) (417,538)
Impairment loss (48,740) (58,129) - (106,869)
Disposals 18,358 38,776 3,477 60,611
Foreign currency translation differences (144,090) (60,206) (1,032) (205,328)
Other 25,550 1,914 45 27,509
31 December 2020 (2,193,734) (802,877) (22,368) (3,018,979)
Advance payments for property, plant
and equipment
31 December 2019 6,791 13,314 831 20,936
31 December 2020 10,218 5,757 558 16,533
Carrying amounts
31 December 2019 3,035,890 934,193 55,924 4,026,007
31 December 2020 3,249,748 959,530 55,196 4,264,474
The cost of assets under construction included in property, plant and equipment was 362,623 million RUB and
458,265 million RUB at 31 December 2021 and 2020, respectively.
Exploration and evaluation assets
2021 2020
1 January 163,251 129,951
Capitalised expenditures 32,597 36,881
Acquisitions through business combinations 283 362
Reclassified to development assets (13,388) (5,238)
Charged to expenses (5,176) (3,542)
Foreign currency translation differences 380 6,244
Other movements 61 (1,407)
31 December 178,008 163,251
The Company performs a regular annual impairment test of its assets. The test is based on geological models
and development programmes, which are revised on a regular basis, at least annually.
In the fourth quarter of 2021, the Group recognised an impairment loss in relation to property, plant and
equipment in the total amount of 27.1 billion RUB, of which 18.5 billion RUR related to international refineries
and resulted from a decline in the forecasted refining margins that followed the tightening of the EU
decarbonisation policy. A loss of 6.0 billion RUB related to refining, marketing and distribution assets in Russia,
a loss of 1.0 billion RUB related to exploration and production assets in Russia and a loss of 1.6 billion related
to other assets in Russia. Also, as a result of improvement of economic parameters, the Group recognised an
impairment reversal for its exploration and production assets in Russia in the amount of 10.0 billion RUB, for
its international exploration and production assets in the amount of 1.3 billion RUB and for its refining,
marketing and distribution assets in Russia in the amount of 15.4 billion RUB.
23
PJSC LUKOIL
The recoverable amounts of CGUs subject to impairment and impairment reversal in the fourth quarter of 2021
in the amount of 41 billion RUB and 216 billion RUB, respectively, were determined as value in use equal to
the present value of the expected cash flows. Value in use was estimated using the following discount rates: for
exploration and production assets and other assets in Russia – 9.0%, for international exploration and production
assets – 10.0%, for refining, marketing and distribution assets in Russia – from 12.0% to 13.6%, for international
refining, marketing and distribution assets – from 6.6% to 10.3%.
For impairment test purposes at 31 December 2021 the following Brent Blend price assumptions have been
used: $75 per barrel in 2022, $70 per barrel in 2023 and $66 per barrel from 2024.
Due to a significant deterioration in the macroeconomic environment in the first quarter of 2020, the Company
revised the scenario conditions used in the impairment test at the end of 2019 and performed an impairment test
for assets at 31 March 2020.
As a result, in the first quarter of 2020, the Group recognised an impairment loss for its exploration and
production assets in Russia in the amount of 5.2 billion RUB, for its international exploration and production
assets in the amount of 2.2 billion RUB and for its international refining, marketing and distribution assets in
the amount of 28.8 billion RUB.
The recoverable amounts of CGUs in the amount of 139 billion RUB, which relate to assets impaired in the first
quarter of 2020, were determined as value in use equal to the present value of the expected cash flows. Value in
use was estimated using 9.0% discount rate for exploration and production assets in Russia, 8.2% discount rate
for international exploration and production assets and 7.5% discount rate for international refining, marketing
and distribution assets.
For impairment test purposes at 31 March 2020 the following Brent Blend price assumptions have been used:
$40 per barrel in 2020–2021, $45 per barrel in 2022, $50 per barrel in 2023, $55 per barrel in 2024 and $60 per
barrel from 2025.
Also, in the second quarter of 2020, the Group recognised an impairment loss for its international exploration
and production assets in the amount of 38.2 billion RUB. Of this amount, 35.9 billion RUB relates to gas projects
in the Republic of Uzbekistan and are determined based on the revised business model, which takes into account
conservative approaches to assessing the structure of gas supplies and pricing.
The recoverable amounts of CGUs in the amount of 106 billion RUB, which relate to assets impaired in the
second quarter of 2020, were determined as value in use equal to the present value of the expected cash flows.
Value in use was estimated using 11.2% discount rate.
In the fourth quarter of 2020, the Group recognised an impairment loss for its exploration and production assets
in Russia in the amount of 3.0 billion RUB, for its international exploration and production assets in the amount
of 0.1 billion RUB, for its refining, marketing and distribution assets in Russia in the amount of 7.7 billion RUB
and for its international refining, marketing and distribution assets in the amount of 21.6 billion RUB.
The recoverable amounts of CGUs in the amount of 52 billion RUB, which relate to assets impairment in the
fourth quarter of 2020, were determined as value in use equal to the present value of the expected cash flows.
Value in use was estimated using the following discount rates: for exploration and production assets in Russia
– 8.0%, for refining, marketing and distribution assets in Russia – from 9.7% to 12.8% and for international
refining, marketing and distribution assets – 6.4%.
For impairment test purposes at 31 December 2020 the following Brent Blend price assumptions have been
used: $50 per barrel in 2021, $54 per barrel in 2022, $57 per barrel in 2023, $58 per barrel in 2024 and $60 per
barrel from 2025.
24
PJSC LUKOIL
Impairment reversal and impairment loss are included in “Other income (expenses)” in the consolidated
statement of profit or loss and other comprehensive income.
The measurement of recoverable amounts of property, plant and equipment is most sensitive to the volatility of
oil and gas prices. However, price reductions would also result in changes in other factors used when estimating
recoverable amounts. Quantitative assessment of suchlike impacts is very complicated, as it demands detailed
technical, geological and economical evaluations based on hypothetical scenarios rather than existing business
or development plans.
Note 13. Other non-current financial assets

Financial assets measured at fair value through other comprehensive income
Equity instruments 5,929 2,491
Financial assets measured at amortised cost
Long-term loans 20,223 31,075
Non-current accounts and notes receivable 1,624 1,916
Other financial assets 230 15
Financial assets measured at fair value through profit or loss
Long-term loans 33,732 33,195
Total other non-current financial assets 61,738 68,692
Note 14. Acquisition of interests in the projects and joint ventures
In December 2021, a Group company concluded a sale and purchase agreement with PJSC Gazprom Neft for
50% equity share of Meretoyakhaneftegaz LLC, a Gazprom Neft wholly owned subsidiary, for 52 billion RUB,
including cession of claim of Gazprom Neft’s loans worth 35 billion RUB. The contract was signed as part of
creating a joint venture to develop oil and gas cluster in the Nadym-Pur-Tazovsky area of the Yamal-Nenets
Autonomous District. The companies also agreed upon the programme of additional exploration of the blocks
of Meretoyakhaneftegaz LLC where 8.9 billion RUB of expenditures will be financed by LUKOIL. The
transaction is planned to be completed in 2022 after fulfilment of a number of conditions precedent, including
all necessary corporate approvals, as well as the consent of the Federal Antimonopoly Service. After acquisition,
this investment is going to be accounted by the Group using the equity method.
In October 2021, a Group company signed an agreement to purchase a 15.5% interest in the Shah Deniz natural
gas project in Azerbaijan sector of the Caspian sea from PETRONAS for $2.25 billion. In December 2021, the
terms of the agreement were amended as a result of negotiations with the Shah Deniz project partners on
implementation of pre-emptive rights. In accordance with the new arrangement, the share acquired by the Group
was reduced to 9.99% with proportional decrease in consideration to $1.45 billion. In the fourth quarter of 2021,
the Group company made an advance payment under this agreement in the amount of $92.5 million (6.7 billion
RUB). The transaction was closed on 17 February 2022 after all customary conditions, including approval by
SOCAR, the State Oil Company of the Azerbaijan Republic, were fulfilled. Following the completion of the
deal, the Group increased its share in the project from 10% to 19.99%.
In July 2021, a Group company entered into a contract to purchase the 50% operator interest in the Area 4 project
in Mexico by acquiring the operator’s holding company for approximately $435 million plus expenditures
incurred in 2021 and 2022 as of the transaction completion date. In the second half of 2021, the Group company
made an advance payment under this contract in the amount of $43.5 million (3.2 billion RUB). The transaction
was closed on 24 February 2022 after all customary conditions, including approval by the Mexican authorities,
were fulfilled.
25
PJSC LUKOIL
Note 15. Goodwill and other intangible assets
Other internally
Internally generated Acquired
generated software intangible assets intangible assets Goodwill Total
Cost
31 December 2020 21,821 6,573 50,995 38,576 117,965
Additions as result of internal
developments 3,948 924 - - 4,872
Acquisitions - - 116 - 116
Additions - separately acquired - - 5,946 - 5,946
Disposals (137) (37) (1,900) - (2,074)
Foreign currency translation
differences (83) - (2,298) (1,876) (4,257)
Other 655 (456) 68 - 267
31 December 2021 26,204 7,004 52,927 36,700 122,835
Amortisation and impairment
31 December 2020 (15,755) (1,612) (37,490) (12,949) (67,806)
Amortisation for the period (982) (310) (4,451) - (5,743)
Impairment loss - - (186) (9,397) (9,583)
Impairment reversal - 1 33 - 34
Disposals 134 34 1,889 - 2,057
differences 78 - 1,873 906 2,857
Other (222) 25 (112) - (309)
31 December 2021 (16,747) (1,862) (38,444) (21,440) (78,493)
Carrying amounts
31 December 2020 6,066 4,961 13,505 25,627 50,159
31 December 2021 9,457 5,142 14,483 15,260 44,342
Cost
31 December 2019 19,532 4,975 52,782 32,337 109,626
Additions as result of internal
developments 1,914 1,859 - - 3,773
Additions - separately acquired - - 5,597 - 5,597
Disposals (190) (23) (11,088) - (11,301)
differences 281 4 3,617 6,239 10,141
Other 284 (242) 87 - 129
31 December 2020 21,821 6,573 50,995 38,576 117,965
Amortisation and impairment
31 December 2019 (14,797) (1,306) (40,491) (9,924) (66,518)
Amortisation for the period (917) (299) (4,881) - (6,097)
Impairment loss - (1) (18) - (19)
Disposals 164 - 10,950 - 11,114
differences (260) (4) (2,851) (3,025) (6,140)
Other 55 (2) (199) - (146)
31 December 2020 (15,755) (1,612) (37,490) (12,949) (67,806)
Carrying amounts
31 December 2019 4,735 3,669 12,291 22,413 43,108
31 December 2020 6,066 4,961 13,505 25,627 50,159
In the fourth quarter of 2021, the Group recognised an impairment loss in the amount of 9.4 billion RUB for
goodwill incurred on acquisition of one of international refineries due to a decline in the forecasted refining
margins that followed the tightening of the EU decarbonisation policy.
26
PJSC LUKOIL
Note 16. Accounts payable

Trade accounts payable 701,864 533,598
Other accounts payable 84,599 64,334
Total accounts payable 786,463 597,932
Note 17. Short-term borrowings and current portion of long-term debt

Short-term borrowings from third parties 7,993 18,736
Short-term borrowings from related parties 899 2,522
Current portion of long-term debt 71,359 61,378
Total short-term borrowings and current portion of long-term debt 80,251 82,636
Short-term borrowings from third parties include amounts repayable in US dollars of 6,914 million RUB and
17,510 million RUB and amounts repayable in other currencies of 1,079 million RUB and 1,226 million RUB
at 31 December 2021 and 2020, respectively. The weighted-average interest rate on short-term borrowings from
third parties was 3.20% and 2.63% per annum at 31 December 2021 and 2020, respectively. Short-term
borrowings from third parties are unsecured at 31 December 2021.
Note 18. Long-term debt

Long term loans and borrowings from third parties 58,728 112,660
6.656% non-convertible US dollar bonds, maturing 2022 37,131 36,901
2.80% non-convertible US dollar bonds, maturing 2027 85,299 -
3.60% non-convertible US dollar bonds, maturing 2031 85,297 -
Lease obligations 185,843 193,872
Total long-term debt 749,058 638,453
Current portion of long-term debt (71,359) (61,378)
Total non-current portion of long-term debt 677,699 577,075
Long-term loans and borrowings
Long-term loans and borrowings from third parties include amounts repayable in US dollars of
56,678 million RUB and 101,376 million RUB, amounts repayable in euros of 122 million RUB and
11,284 million RUB at 31 December 2021 and 2020, respectively, and amounts repayable in Russian rubles and
other currencies of 1,928 million RUB at 31 December 2021. This debt has maturity dates from 2022 through
2028. The weighted-average interest rate on long-term loans and borrowings from third parties was 2.03% and
2.54% per annum at 31 December 2021 and 2020, respectively. A number of long-term loan agreements contain
certain financial covenants which are being met by the Group. Long-term loans and borrowings from third
parties are unsecured at 31 December 2021.
27
PJSC LUKOIL
Note 18. Long-term debt (continued)
Non-convertible bonds
On 26 October 2021, a Group company issued two tranches of non-convertible bonds totaling $2.3 billion
(170.9 billion RUB). The first tranche of $1.15 billion (85.45 billion RUB) was placed with a maturity of
5.5 years and a coupon yield of 2.80% per annum, the second tranche of $1.15 billion (85.45 billion RUB) was
placed with a maturity of 10 years and a coupon yield of 3.60% per annum. All bonds were placed at face value
and have a half year coupon period.
On 6 May 2020, a Group company issued non-convertible bonds totaling $1.5 billion (111.45 billion RUB). The
bonds were placed with a maturity of 10 years and a coupon yield of 3.875% per annum. All bonds were placed
at face value and have a half year coupon period.
In November 2016, a Group company issued non-convertible bonds totaling $1 billion (74.3 billion RUB).
The bonds were placed with a maturity of 10 years and a coupon yield of 4.750% per annum. All bonds were
placed at face value and have a half year coupon period.
In April 2013, a Group company issued two tranches of non-convertible bonds totaling $3 billion
(222.9 billion RUB). The first tranche totaling $1.5 billion (111.45 billion RUB) was placed with a maturity of
5 years and a coupon yield of 3.416% per annum. The second tranche totaling $1.5 billion (111.45 billion RUB)
was placed with a maturity of 10 years and a coupon yield of 4.563% per annum. All bonds were placed at face
value and have a half year coupon period. In April 2018, a Group company redeemed all issued bonds of the
first tranche in accordance with the conditions of the bond issue.
In November 2010, a Group company issued two tranches of non-convertible bonds totaling $1 billion
(74.3 billion RUB) with a maturity of 10 years and a coupon yield of 6.125%. The first tranche totaling
$800 million (59.4 billion RUB) was placed at a price of 99.081% of the bond’s face value with a resulting yield
to maturity of 6.250%. The second tranche totaling $200 million (14.9 billion RUB) was placed at a price of
102.44% of the bond’s face value with a resulting yield to maturity of 5.80%. All bonds have a half year coupon
period. In November 2020, a Group company redeemed all issued bonds in accordance with the conditions of
the bond issue.
In June 2007, a Group company issued two tranches of non-convertible bonds totaling $1 billion (74.3 billion
RUB). $500 million (37.15 billion RUB) were placed with a maturity of 10 years and a coupon yield of 6.356%
per annum. Another $500 million (37.15 billion RUB) were placed with a maturity of 15 years and a coupon
yield of 6.656% per annum. All bonds were placed at face value and have a half year coupon period. In June
2017, a Group company redeemed all issued bonds of the first tranche in accordance with the conditions of the
bond issue.
28
PJSC LUKOIL
Note 18. Long-term debt (continued)
Reconciliation of liabilities arising from financing activities
Loans and Lease Other

borrowings Bonds obligations liabilities Total
31 December 2020 133,918 331,921 193,872 3,265 662,976
Changes from financing cash flows:
Proceeds from issuance of short-term
borrowings 1,019 - - - 1,019
Principal repayments of short-term borrowings (11,112) - - - (11,112)
Proceeds from issuance of long-term debt 26,319 161,042 - - 187,361
Principal repayments of long-term debt (80,158) - (45,224) - (125,382)
Interest paid - - (9,892) (20,931) (30,823)
Dividends paid on Company common stock - - - (357,672) (357,672)
Total changes from financing cash flows (63,932) 161,042 (55,116) (378,603) (336,609)
Other changes:
Interest accrued 741 102 9,893 22,361 33,097
Dividends declared on Company common stock - - - 360,316 360,316
Changes arising from obtaining or losing control
over subsidiaries (1,449) - - (5) (1,454)
The effect of changes in foreign exchange rates (1,659) 11,422 (3,245) (16) 6,502
Non-cash additions to lease obligations - - 36,739 - 36,739
Other changes 1 - 3,700 21,965 25,666
Total other changes (2,366) 11,524 47,087 404,621 460,866
31 December 2021 67,620 504,487 185,843 29,283 787,233
31 December 2019 134,026 247,326 171,880 135,920 689,152
Changes from financing cash flows:
Proceeds from issuance of short-term
borrowings 1,971 - - - 1,971
Principal repayments of short-term borrowings (815) - - - (815)
Proceeds from issuance of long-term debt - 108,796 - - 108,796
Principal repayments of long-term debt (30,686) (78,456) (62,838) - (171,980)
Interest paid - - (10,501) (28,599) (39,100)
Dividends paid on Company common stock - - - (407,309) (407,309)
Total changes from financing cash flows (29,530) 30,340 (73,339) (435,908) (508,437)
Other changes:
Interest accrued 1,853 128 10,501 26,810 39,292
Dividends declared on Company common stock - - - 258,389 258,389
The effect of changes in foreign exchange rates 27,010 54,125 29,688 1,082 111,905
Non-cash additions to lease obligations - - 50,009 - 50,009
Other changes 559 2 5,133 16,972 22,666
Total other changes 29,422 54,255 95,331 303,253 482,261
31 December 2020 133,918 331,921 193,872 3,265 662,976
29
PJSC LUKOIL
Note 19. Taxes payable

Income tax 16,920 16,614
Mineral extraction tax 101,767 49,332
Tax on additional income from hydrocarbon production 43,165 2,881
VAT 77,109 35,650
Excise tax 25,284 22,733
Property tax 5,409 5,675
Total taxes payable 282,191 142,458
Note 20. Other current liabilities

Advances received 41,643 31,142
Dividends payable 25,701 1,610
Other 4,064 2,745
Total other current liabilities 71,408 35,497
Note 21. Provisions
Asset Provision for Provision for Provision for

retirement employee environmental Pension unused Other
obligations compensations liabilities liabilities vacations provisions Total
31 December 2021 100,926 2,272 4,185 12,105 6,850 11,449 137,787
Incl.: Non-current 100,590 121 1,141 9,878 252 1,438 113,420
Current 336 2,151 3,044 2,227 6,598 10,011 24,367
31 December 2020 111,614 10,939 4,204 13,794 6,326 6,924 153,801
Incl.: Non-current 110,916 175 1,329 11,678 322 2,245 126,665
Current 698 10,764 2,875 2,116 6,004 4,679 27,136
Asset retirement obligations changed as follows:

2021 2020
1 January 111,614 63,387
Provisions made during the period 3,600 39,826
Reversal of provisions (812) (154)
Provisions used during the period (204) (325)
Accretion expense 3,651 3,882
Change in discount rate (19,188) 8,921
Changes in estimates 1,477 (9,395)
Foreign currency translation differences 94 5,450
Other 694 22
31 December 100,926 111,614
Note 22. Pension liabilities
The Group sponsors a postretirement defined benefit pension plan that covers the majority of the Group’s
employees. One type of pension plan is based on years of service, final remuneration levels as of the end of 2003
and employee gratitude, received during the period of work. The other type of pension plan is based on salary.
These plans are solely financed by Group companies. Simultaneously employees have the right to receive
pension benefits with a partial payment by the Group (up to 4% of the annual salary of the employee).
30
PJSC LUKOIL
Note 22. Pension liabilities (continued)
Plan assets and pensions payments are managed by a non-state pension fund, JSC “NPF Otkritie” (former “NPF
LUKOIL-GARANT”). The Group also provides several long-term social benefits, including lump-sum death-
in-service benefit, in case of disability and upon retirement payments. Also certain payments are received by
retired employees upon reaching a certain old age or invalidity.
The Company uses 31 December as the measurement date for its pension obligation. An independent actuary
has assessed the benefit obligations at 31 December 2021 and 2020.
The following table sets out movement in the pension liabilities before taxation during 2021 and 2020.
2021 2020
1 January 13,794 12,544
Components of defined benefit costs recorded in profit or loss 2,312 1,771
Components of defined benefit costs recorded in other comprehensive (loss) income (1,601) 1,680
Contributions from employer (1,621) (1,566)
Benefits paid (700) (693)
Opening balance adjustment (80) 49
Liability assumed in business combination 1 9
31 December 12,105 13,794
Note 23. Equity
Common shares
(thousands of (thousands of
shares) shares)
Issued common shares, par value of 0.025 RUB each 692,866 692,866
Treasury shares (42,522) (40,367)
Outstanding common shares 650,344 652,499
The Company has the right to issue additional 85 million common shares.
On 3 December 2019, at the extraordinary general shareholders’ meeting a decision was made to reduce the
share capital of the Company by purchase of a portion of issued shares in order to reduce the total number
thereof. Share capital reduction to 693 million common shares by purchase and cancellation of 22 million
common shares was executed on 10 February 2020. Most of the common shares were purchased from a Group
company.
Dividends
At the extraordinary general shareholders’ meeting on 2 December 2021, interim dividends for 2021 were
approved in the amount of 340 RUB per common share.
At the annual general shareholders’ meeting on 24 June 2021, dividends for 2020 were approved in the amount
of 213 RUB per common share. At the extraordinary shareholders’ meeting on 3 December 2020, interim
dividends for 2020 were approved in the amount of 46 RUB per common share. Total dividends for 2020 were
approved in the amount of 259 RUB per common share.
Dividends on the Company’s shares payable of 25,644 million RUB and 699 million RUB are included in “Other
current liabilities” in the consolidated statement of financial position at 31 December 2021 and 2020,
respectively.
31
PJSC LUKOIL
Note 23. Equity (continued)
Earnings per share
The calculation of basic and diluted earnings per share was as follows:
2021 2020
Profit for the year attributable to PJSC LUKOIL shareholders 773,442 15,175
Weighted average number of common shares (thousands of shares) 652,365 650,965
Dilutive effect of equity-settled share-based compensation plan (thousands of shares) 32,603 24,827
Weighted average number of common shares, assuming dilution (thousands of shares) 684,968 675,792
Profit per share of common stock attributable to PJSC LUKOIL shareholders (in Russian
rubles):
Basic 1,185.60 23.31
Diluted 1,129.17 22.46
Note 24. Personnel expenses
Personnel expenses were as follows:

2021 2020
Payroll costs 166,844 156,597
Statutory insurance contributions and social taxes 37,309 35,063
Share-based compensation 31,366 31,366
Total personnel expenses 235,519 223,026
Note 25. Finance income and costs
Finance income was as follows:

2021 2020
Interest income from deposits 9,874 6,244
Interest income from loans 4,383 4,245
Other finance income 2,262 2,562
Total finance income 16,519 13,051
Finance costs were as follows:

2021 2020
Interest expenses 31,609 37,333
Accretion expenses 4,197 4,505
Other finance costs 1,762 2,284
Total finance costs 37,568 44,122
Note 26. Other income and expenses
Other income was as follows:

2021 2020
Gain on disposal of assets 5,260 2,618
Reversal of impairment of assets 26,687 7,267
Other income 12,219 8,085
Total other income 44,166 17,970
32
PJSC LUKOIL
Note 26. Other income and expenses (continued)
Other expenses were as follows:

2021 2020
Loss on disposal of assets 14,355 20,755
Impairment loss 36,647 114,665
Charity expenses 6,651 8,423
Other expenses 10,156 11,287
Total other expenses 67,809 155,130
Note 27. Lease
Primarily the Group leases such assets as transport (vessels, tank cars), land, storage facilities, drilling rigs and
other equipment. The lease typically runs for a period of 3–5 years. Some leases include an option to renew the
lease for additional period after the end of the non-cancellable period. The Group has applied judgement to
determine the lease term for some lease contracts in which it is a lessee that includes renewal option. Moreover,
in determining the lease term the Group also took into account economic factors, which influence asset usage
duration in its activity.

Carrying amounts
Property, plant and equipment owned 3,233,821 812,161 45,976 4,091,958
Right-of-use assets 34,101 132,142 4,929 171,172
31 December 2021 3,267,922 944,303 50,905 4,263,130
Property, plant and equipment owned 3,214,181 820,657 49,574 4,084,412
Right-of-use assets 35,567 138,873 5,622 180,062
31 December 2020 3,249,748 959,530 55,196 4,264,474
Right-of-use assets:
1 January 2021 35,567 138,873 5,622 180,062
Additions 5,449 31,275 14 36,738
Depreciation for the period (9,245) (37,587) (853) (47,685)
Other movements 2,330 (419) 146 2,057
31 December 2021 34,101 132,142 4,929 171,172
1 January 2020 39,946 131,829 4,406 176,181
Additions 2,589 45,573 1,868 50,030
Depreciation for the period (10,322) (54,497) (754) (65,573)
Other movements 3,354 15,968 102 19,424
31 December 2020 35,567 138,873 5,622 180,062
Lease liabilities:
31 December 2021 185,843

Incl.: Non-current 156,502
Current 29,341
31 December 2020 193,872
Incl.: Non-current 159,340
Current 34,532
33
PJSC LUKOIL
Note 27. Lease (continued)
Within the consolidated statement of profit or loss and other comprehensive income the following expenses were
recognised: interest on lease liabilities in the amount of 9,140 million RUB and 9,435 million RUB and variable
lease payments not included in the measurement of lease liabilities in the amount of 9,336 million RUB and
10,853 million RUB during 2021 and 2020, respectively. Income from sub-leasing right-of-use assets was not
material.
Within the consolidated statement of cash flows the total cash outflow under leases, including variable lease
payments attributable to capital expenditure, amounted to 123,355 million RUB and 170,990 million RUB
during 2021 and 2020, respectively.
Note 28. Income tax
Operations in the Russian Federation are subject to a 20% income tax rate. For the period from 2017 till 2024
(inclusive) the Federal income tax rate is set as 3.0% and the regional income tax rate is set as 17.0%. Regional
income tax rate may be reduced for certain categories of taxpayers by the laws of constituent entities of the
Russian Federation, however certain restrictions apply on the application of the reduced regional rates.
The Group’s foreign operations are subject to taxes at the tax rates applicable to the jurisdictions in which they
operate.
A number of Group companies in Russia are paying income tax as a consolidated taxpayers’ group (“CTG”).
This allows taxpayers to offset taxable losses generated by certain participants of a CTG against taxable profits
of other participants of the CTG.
Income tax was as follows:

2021 2020
Current income tax expense for the year 162,872 63,458
Adjustment for prior periods 935 (2,096)
Current income taxes 163,807 61,362
Deferred income tax 27,644 20,792
Total income tax expense 191,451 82,154
The following table is a reconciliation of the amount of income tax expense that would result from applying the
Russian combined statutory income tax rate of 20% applicable to the Company to profit before income taxes to
total income taxes.
2021 2020
Profit before income taxes 966,964 98,787
Notional income tax at the Russian statutory rate 193,393 19,757
Increase (reduction) in income tax due to:
Non-deductible items, net 17,438 9,483
Domestic and foreign rate differences (12,315) 7,907
Adjustment for prior periods 935 (2,096)
Change in recognised deductible temporary differences (8,000) 47,103
Total income tax expense 191,451 82,154
The following table sets out the tax effects of each type of temporary differences which give rise to deferred
income tax assets and liabilities.
34
PJSC LUKOIL
Note 28. Income tax (continued)

Property, plant and equipment 11,154 9,221
Investments 13 53
Inventories 10,948 6,658
Accounts receivable 2,497 1,586
Accounts payable and provisions 9,089 9,691
Tax loss carry forward 24,948 22,614
Other 639 522
Total deferred income tax assets 59,288 50,345
Set off of tax (36,446) (34,047)
Deferred income tax assets 22,842 16,298
Property, plant and equipment (320,308) (290,641)
Investments (1,316) (1,863)
Inventories (5,902) (3,149)
Accounts receivable (10,166) (4,662)
Accounts payable and provisions (1,078) (652)
Other (1,111) (2,036)
Total deferred income tax liabilities (339,881) (303,003)
Set off of tax 36,446 34,047
Deferred income tax liabilities (303,435) (268,956)
Net deferred income tax liabilities (280,593) (252,658)
Foreign currency
translation
Recognition in Acquisitions differences and
31 December 2020 profit or loss and disposal other 31 December 2021
Property, plant and equipment (281,420) (27,800) (14) 80 (309,154)
Investments (1,810) 498 - 9 (1,303)
Inventories 3,509 1,581 (18) (26) 5,046
Accounts and notes receivable (3,076) (4,587) - (6) (7,669)
Accounts payable and provisions 9,039 (722) - (306) 8,011
Tax loss carry forward 22,614 2,357 - (23) 24,948
Other (1,514) 1,029 - 13 (472)
Net deferred income tax liabilities (252,658) (27,644) (32) (259) (280,593)
Foreign currency
translation
Recognition in Acquisitions differences and
31 December 2019 profit or loss and disposal other 31 December 2020
Property, plant and equipment (270,843) (9,859) 244 (962) (281,420)
Investments (1,457) (306) - (47) (1,810)
Inventories 211 3,110 (9) 197 3,509
Accounts and notes receivable (6,968) 4,385 (13) (480) (3,076)
Accounts payable and provisions 9,534 (1,406) (17) 928 9,039
Tax loss carry forward 35,344 (16,687) (75) 4,032 22,614
Other (1,307) (29) - (178) (1,514)
Net deferred income tax liabilities (235,486) (20,792) 130 3,490 (252,658)
35
PJSC LUKOIL
Note 28. Income tax (continued)
Deferred tax assets have not been recognised in respect of the temporary differences related to the following
items:

Property, plant and equipment 15,980 15,136
Tax loss carry forward 35,297 39,126
Other 655 5,670
Total unrecognised deferred tax assets 51,932 59,932
Management believes that it is not probable that taxable profit will be available against which these deductible
temporary differences can be utilised.
Amounts recognised in other comprehensive income during 2021:
Before tax Tax Net of tax

Foreign currency translation differences for foreign operations (20,263) - (20,263)
Change in fair value of financial assets at fair value through other
comprehensive income 2,572 - 2,572
Remeasurements of defined benefit liability / asset of pension plan 1,601 (198) 1,403
Total (16,090) (198) (16,288)
Amounts recognised in other comprehensive income during 2020:
Before tax Tax Net of tax

Foreign currency translation differences for foreign operations 268,707 - 268,707
Change in fair value of financial assets at fair value through other
comprehensive income (767) - (767)
Remeasurements of defined benefit liability / asset of pension plan (1,680) 257 (1,423)
Total 266,260 257 266,517
Retained earnings of foreign subsidiaries for which deferred taxation has not been provided included
1,013,402 million RUB and 1,361,368 million RUB at 31 December 2021 and 2020, respectively. This liability
was not recognised because the Group considers such amounts to be indefinitely invested, i.e. management
believes that they will not be returned in the foreseeable future. Moreover the Group controls the dividend policy
of its subsidiaries and is able to veto the payment of dividends.
The consequences of taxation in Russia of certain profits of controlled foreign corporations in accordance with
applicable tax legislation are accounted for within current and deferred tax liabilities.
Note 29. Commitments and contingencies
Capital commitments
Capital commitments of the Group relating to construction and acquisition of property, plant and equipment
amount to 552,506 million RUB and 501,550 million RUB at 31 December 2021 and 2020, respectively.
Insurance
To provide insurance protection, the Group uses the services of Russian and international insurance companies
with high ratings. The Group's most significant risks are reinsured at the first-class foreign markets. In respect
of liability to third parties for damages to property and the environment resulting from accidents related to the
Group's property or activities, the Group has insurance coverage that is generally higher than the limits set by
law. Management believes that the Group has sufficient insurance coverage of its core operating assets, as well
as risks, which could have a material effect on the Group’s operations and financial position.
36
PJSC LUKOIL
Note 29. Commitments and contingencies (continued)
Environmental liabilities
Group companies and their predecessor companies have operated in the Russian Federation and other countries
for many years, which resulted in certain environmental consequences. Environmental regulations are currently
in development stage in the Russian Federation and other countries where the Group has operations. Group
companies routinely assess and evaluate their environmental obligations in response to new and changing
legislation.
As liabilities in respect of the Group’s environmental obligations are able to be determined, they are recognised
in profit or loss. The likelihood and amount of liabilities relating to environmental obligations under proposed
or any future legislation cannot be reasonably estimated at present and could become material. Under existing
legislation, however, management believes that there are no significant unrecorded liabilities or contingencies,
which could have a material adverse effect on the operating results or financial position of the Group.
Social assets
Certain Group companies contribute to Government sponsored programmes, the maintenance of local
infrastructure and the welfare of their employees within the Russian Federation and elsewhere. Such
contributions include assistance with the construction, development and maintenance of housing, hospitals and
transport services, recreation and other social needs. The funding of such assistance is periodically determined
by management and is appropriately capitalised or expensed as incurred.
Taxation environment
The taxation systems in the Russian Federation and other emerging markets where Group companies operate
are relatively new and are characterised by numerous taxes and frequently changing legislation, which is often
unclear, contradictory, and subject to interpretation. Often, differing interpretations exist among different tax
authorities within the same jurisdictions and among taxing authorities in different jurisdictions. Taxes are subject
to review and investigation by a number of authorities, who are enabled by law to impose substantial fines,
penalties and interest charges. In the Russian Federation a tax year remains open for review by the tax authorities
during three subsequent calendar years. However, under certain circumstances a tax year may remain open
longer. Recent events within the Russian Federation suggest that the tax authorities are taking a more assertive
position in their interpretation and enforcement of tax legislation. Such factors significantly increase taxation
risks in the Russian Federation and other emerging markets where Group companies operate, comparing to other
countries where taxation regimes have been subject to development and clarification over longer periods.
The tax authorities in each region of the Russian Federation may have a different interpretation of similar
taxation issues which may result in taxation issues successfully defended by the Group in one region being
unsuccessfully defended by the Group in another region. There is some direction provided from the central
authority based in Moscow on particular taxation issues.
The Group has implemented tax planning and management strategies based on existing legislation. The Group
is subject to tax authority audits on an ongoing basis, which is a normal practice in the Russian Federation and
other republics of the former Soviet Union, and, at times, the authorities have attempted to impose additional
significant taxes on the Group. Management believes that it has adequately met the requirements and provided
for tax liabilities based on its interpretation of existing tax legislation. However, the relevant tax authorities may
have differing interpretations and the effects on the consolidated financial statements, if the authorities were
successful in enforcing their interpretations, could be significant.
37
PJSC LUKOIL
Note 29. Commitments and contingencies (continued)
Litigation and claims
In July 2015, the prosecutors with the Ploesti Court of Appeals (hereinafter the “Prosecutor’s Office”) charged
the general director and several officers of PETROTEL-LUKOIL S.A., a Group company, with bad faith use of
the company’s credit and money laundering. Similar charges were brought against LUKOIL Europe Holdings
B.V., a former Group company, for 2010–2014. On 10 May 2016, the Prahova Tribunal lifted all preventive
measures that were in effect against the accused individuals. Upon preliminary hearings the Prosecutor’s Office
revised the amount of damage claimed from $2.2 billion (163.4 billion RUB) to $1.5 billion (111.4 billion RUB).
An expertise of all relevant issues of the criminal case was carried out during 2017, the results of which were
accepted by the Tribunal on 12 February 2018. At the final hearing on the case which was held on
23 October 2018 the court issued a not guilty decision to all the accused, including general director of
PETROTEL-LUKOIL S.A., his deputies and PETROTEL-LUKOIL S.A. and LUKOIL Europe Holdings B.V.
themselves. As a result freezing injunction in the amount of approximately $1.5 billion (111.4 billion RUB) was
removed from all assets of the refinery, shares and accounts of PETROTEL-LUKOIL S.A. and LUKOIL Europe
Holdings B.V. On 1 November 2018, this decision was appealed by the Prosecutor’s Office to the Ploesti Court
of Appeals. On 27 November 2019, the Ploesti Court of Appeals issued a decision to return the case for a new
examination in the court of the first instance. On 24 December 2019, the defendants appealed the decision in an
order of extraordinary appeal to the Ploesti Court of Appeals. On 17 June 2020, the Ploesti Court of Appeals
rejected the appeal of PETROTEL-LUKOIL S.A. and transferred the case to the Prahova Tribunal. On
9 December 2020, the Prahova Tribunal issued a repeated acquittal due to the absence of an event of a crime.
On 16 December 2020, the Prosecutor’s Office filed a protest against the court's verdict. The hearings took place
on 23 September and 21 October 2021. On 25 November 2021 the Ploesti Court of Appeals issued a decision to
return the case for a new examination in the court of the first instance. The hearing on the main court case was
originally scheduled to 23 February 2022 but was postponed to 12 April 2022. Management does not believe
that the outcome of this matter will have a material adverse effect on the Group’s financial position.
LUKOIL Overseas Karachaganak B.V., a Group company, among other contractors, is involved in the dispute
with the Republic of Kazakhstan arising from the Final Production Sharing Agreement relating to the Contract
area of the Karachaganak Oil and Gas Condensate Field with respect to cost recovery in 2010-2017. Currently,
within the framework of the dispute the parties are making efforts to resolve the existing controversies by way
of negotiations and management believes that the amounts of claim, as well as calculations of potential losses
arising from the dispute to be preliminary and should not be disclosed in order to avoid any adverse impact on
the process. Management also believes that the ultimate outcome of this dispute will not have a material adverse
effect on the financial position of the Group.
On 21 May 2020, the Federal Antimonopoly Service of Russia (hereinafter – FAS of Russia) filed a claim to the
Arbitration court of the Arkhangelsk region for invalidating the transaction of PJSC LUKOIL for the sale of
100% of shares of JSC Arkhangelskgeoldobycha to LLC Otkritie Promyshlennye Investitsii in May 2017 and
applying the consequences of its invalidity. On 31 July 2020, the Arbitration court of Arkhangelsk region passed
the case to Arbitration court of Moscow. The hearing date was postponed to 15 April 2022. The transaction to
sell shares of JSC Arkhangelskgeoldobycha was concluded after a five-month due diligence and verification of
information provided by the seller and the buyer, without any objections from regulatory authorities, in strict
compliance with the Russian legislation, after an approval was obtained from the Governmental Commission
for Control over Foreign Investments in the Russian Federation. In addition, a written approval was obtained
from FAS of Russia to conduct this transaction. The price of the asset was agreed by the parties of the transaction
as a result of the lengthy negotiations where largest investment banks were involved as advisers, which confirms
the market nature of the deal. In this regard, the Company does not agree with the arguments set out in the claim
of FAS of Russia and regards itself as a bona fide seller in this transaction, and will take all necessary measures
to protect its rights and legitimate interests. Management does not believe that the outcome of this matter will
have a material adverse effect on the Group’s financial position.
The Group is involved in various other claims and legal proceedings arising in the normal course of business.
While these claims may seek substantial damages against the Group and are subject to uncertainty inherent in
any litigation, management does not believe that the ultimate resolution of such matters will have a material
adverse impact on the Group’s operating results or financial position.
38
PJSC LUKOIL
Note 30. Related party transactions
The senior management of the Company believes that the Group has appropriate procedures in place to identify
and properly disclose transactions with related parties and has disclosed all of the relationships identified which
it deemed to be significant. Related party sales and purchases of oil and oil products were primarily to and from
associates and joint ventures. Other financial assets mostly represent loans given to associates and joint ventures.
Loans and borrowings mostly represent lease obligations.
Outstanding balances with related parties were as follows:

Accounts receivable and other current assets 5,295 2,474
Other financial assets 32,903 32,403
Total assets 38,198 34,877
Accounts payable 9,364 6,902
Short term borrowings and long-term debt 17,623 17,649
Total liabilities 26,987 24,551
Related party transactions were as follows:

2021 2020
Sales of oil and oil products 33,191 15,351
Other sales 3,303 2,707
Purchases of oil and oil products 75,342 57,915
Other purchases 21,374 18,342
Proceeds from sale of other financial assets, net 2,321 5,075
(Principal repayments) proceeds from issuance of short term borrowings and long-term
debt, net (1,490) 2,080
Key management remuneration
Key management personnel includes members of the Board of Directors and members of the Management
Board. Remuneration of key management personnel, including basic salary, bonuses and other payments,
amounted to 1,768 million RUB and 1,728 million RUB during 2021 and 2020, respectively.
Also, a provision under the compensation plan (disclosed in Note 31 “Compensation plan”) was accrued in
relation to the Company’s key management personnel in the amount of 3,137 million RUB during 2021 and
2020.
Note 31. Compensation plan
In late December 2017, the Company announced a compensation plan based on approximately 40 million shares
available to certain members of management and key employees for the period from 2018 to 2022, which was
implemented in July 2018 and recognised as equity-settled share-based compensation plan.
The fair value of the plan was estimated at the grant date at 156.8 billion RUB based on forecasting principles
of Monte-Carlo model and is not going to be recalculated in the future. The fair value was estimated assuming
a spot-price of the Company’s share in the amount of 4,355 RUB at the grant date, discount for illiquidity in the
amount of 9.95% per annum, a risk-free interest rate of 7.50% per annum, an expected dividend yield of 4.99%
per annum, an expected time to maturity of five years and a volatility factor of 25.68%. The expected volatility
factor was estimated based on the historical volatility of the Company’s shares for the previous five years. The
vesting of shares is contingent on meeting the requisite service period, certain KPIs and share price appreciation.
The Group is planning to recognise expenses related to the plan evenly during the vesting period.
Related to this share plan the Group recognised compensation expenses of 31,366 million RUB during 2021 and
2020.
39
PJSC LUKOIL
Note 32. Segment information
The Group has the following operating segments – exploration and production; refining, marketing and
distribution; corporate and other. These segments have been determined based on the nature of their operations.
Management on a regular basis assesses the performance of these operating segments.
The exploration and production segment explores for, develops and produces crude oil and gas. The refining,
marketing and distribution segment includes refining, petrochemical and transport operations, marketing and
trading of crude oil, natural gas and refined products, generation, transportation and sales of electricity, heat and
related services. The corporate and other business operating segment includes activities of the Company and
businesses beyond the Group’s traditional operations.
Geographical segments are based on the area of operations and include two segments: Russia and International.
Operating segments
Refining,
Exploration and marketing and Corporate and
2021 production distribution other Elimination Consolidated
Sales and other operating revenues
Third parties 261,725 9,158,150 15,268 - 9,435,143
Inter-segment 2,594,151 77,382 36,387 (2,707,920) -
Total revenues 2,855,876 9,235,532 51,655 (2,707,920) 9,435,143
Operating expenses 279,074 276,170 11,879 (57,931) 509,192
Selling, general and administrative
expenses 41,611 135,140 67,841 (29,402) 215,190
Profit (loss) for the year attributable to
PJSC LUKOIL shareholders 572,284 284,333 (61,037) (22,138) 773,442
EBITDA 986,255 487,294 (50,208) (18,930) 1,404,411
Income tax expense (191,451)
Finance income 16,519
Finance costs (37,568)
Foreign exchange gain 2,731
Equity share in income of associates
and joint ventures 29,980
Other expenses (23,643)
Depreciation, depletion and
amortisation (425,466)
Profit for the year attributable to
non-controlling interests (2,071)
Profit for the year attributable to PJSC
LUKOIL shareholders 773,442
40
PJSC LUKOIL
Note 32. Segment information (continued)
Refining,
Exploration and marketing and Corporate and
2020 production distribution other Elimination Consolidated
Third parties 164,993 5,455,680 18,728 - 5,639,401
Inter-segment 1,377,246 70,300 40,892 (1,488,438) -
Total revenues 1,542,239 5,525,980 59,620 (1,488,438) 5,639,401
Operating expenses 262,343 195,558 14,875 (32,803) 439,973
Selling, general and administrative
expenses 48,670 120,607 62,838 (33,088) 199,027
Profit (loss) for the year attributable to
PJSC LUKOIL shareholders 125,192 (4,882) (102,523) (2,612) 15,175
EBITDA 500,081 243,322 (39,378) (16,931) 687,094
Income tax expense (82,154)
Finance income 13,051
Finance costs (44,122)
Foreign exchange loss (26,110)
Equity share in income of associates
and joint ventures 11,474
Other expenses (137,160)
Depreciation, depletion and
amortisation (405,440)
Profit for the year attributable to
non-controlling interests (1,458)
Profit for the year attributable to PJSC
LUKOIL shareholders 15,175
Geographical segments
2021 2020
Sales of crude oil within Russia 86,338 23,522
Export of crude oil and sales of crude oil by foreign subsidiaries 3,529,957 1,918,944
Sales of petroleum products within Russia 1,043,067 785,663
Export of petroleum products and sales of petroleum products by foreign subsidiaries 4,261,684 2,548,961
Sales of chemicals within Russia 58,685 36,386
Export of chemicals and sales of chemicals by foreign subsidiaries 101,491 57,036
Sales of gas within Russia 29,714 32,649
Sales of gas by foreign subsidiaries 142,692 68,200
Sales of energy and related services within Russia 57,227 53,607
Sales of energy and related services by foreign subsidiaries 14,316 10,451
Other sales within Russia 48,597 40,169
Other export sales and other sales of foreign subsidiaries 61,375 63,813
Total sales 9,435,143 5,639,401
2021 Russia International Elimination Consolidated

Third parties 1,429,116 8,006,027 - 9,435,143
Inter-segment 1,779,341 4,288 (1,783,629) -
Total revenues 3,208,457 8,010,315 (1,783,629) 9,435,143
Operating expenses 352,409 144,499 12,284 509,192
Selling, general and administrative expenses 99,605 119,625 (4,040) 215,190
Profit for the year attributable to PJSC LUKOIL shareholders 738,170 57,366 (22,094) 773,442
EBITDA 1,180,553 247,044 (23,186) 1,404,411
41
PJSC LUKOIL
Note 32. Segment information (continued)
2020 Russia International Elimination Consolidated

Third parties 1,041,967 4,597,434 - 5,639,401
Inter-segment 994,845 1,670 (996,515) -
Total revenues 2,036,812 4,599,104 (996,515) 5,639,401
Operating expenses 314,341 91,499 34,133 439,973
Selling, general and administrative expenses 91,727 110,938 (3,638) 199,027
Profit (loss) for the year attributable to PJSC LUKOIL
shareholders 202,309 (184,450) (2,684) 15,175
EBITDA 590,553 105,065 (8,524) 687,094
In the International segment the Group receives the most substantial revenues in Switzerland, the USA and
Singapore.
2021 2020
Sales revenues
in Switzerland 4,606,978 2,449,415
in the USA 1,197,085 680,033
in Singapore 621,637 357,647
These amounts are attributed to individual countries based on the jurisdiction of subsidiaries making the sale.
Note 33. Subsidiaries
The most significant subsidiaries of the Group are presented below:

Country of Total Voting Total Voting
Subsidiary incorporation shares shares shares shares
LUKOIL-West Siberia LLC Russia 100.00% 100.00% 100.00% 100.00%
LUKOIL-PERM LLC Russia 100.00% 100.00% 100.00% 100.00%
LUKOIL-Komi LLC Russia 100.00% 100.00% 100.00% 100.00%
RITEK LLC Russia 100.00% 100.00% 100.00% 100.00%
LUKOIL-Permnefteorgsintez LLC Russia 100.00% 100.00% 100.00% 100.00%
LUKOIL-Nizhegorodnefteorgsintez LLC Russia 100.00% 100.00% 100.00% 100.00%
LUKOIL-Nizhnevolzhskneft LLC Russia 100.00% 100.00% 100.00% 100.00%
LUKOIL-Volgogradneftepererabotka LLC Russia 100.00% 100.00% 100.00% 100.00%
LITASCO SA Switzerland 100.00% 100.00% 100.00% 100.00%
SOYUZNEFTEGAZ VOSTOK LIMITED Cyprus 100.00% 100.00% 100.00% 100.00%
LUKOIL INTERNATIONAL GmbH Austria 100.00% 100.00% 100.00% 100.00%
LUKOIL International Upstream Holding B.V. Netherlands 100.00% 100.00% 100.00% 100.00%
LUKOIL Neftohim Burgas AD Bulgaria 99.85% 99.85% 99.85% 99.85%
LUKOIL Overseas Karachaganak B.V. Netherlands 100.00% 100.00% 100.00% 100.00%
LUKOIL Overseas Shah Deniz Ltd. Cyprus 100.00% 100.00% 100.00% 100.00%
LUKOIL Overseas Uzbekistan Ltd. Cyprus 100.00% 100.00% 100.00% 100.00%
LUKOIL Securities B.V. Netherlands 100.00% 100.00% 100.00% 100.00%
LUKOIL Pan Americas LLC USA 100.00% 100.00% 100.00% 100.00%
42
PJSC LUKOIL
Note 34. Fair value
There are the following methods of fair value measurement based on the valuation method:
Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 – inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly;
Level 3 – unobservable inputs.
The following tables show the carrying amounts and fair values of financial assets and financial liabilities
included in the consolidated statement of financial position at 31 December 2021 and 2020.
Fair value
31 December 2021 Carrying amount Level 1 Level 2 Level 3 Total
Financial assets:
Commodity derivative contracts 1,553 - 1,553 - 1,553
Financial assets at fair value through
profit or loss 33,732 - - 33,732 33,732
other comprehensive income 5,929 5,929 - - 5,929
Financial liabilities:
Commodity derivative contracts 1,377 - 1,377 - 1,377
Loans and borrowings 749,058 514,279 - 243,070 757,349
Fair value
31 December 2020 Carrying amount Level 1 Level 2 Level 3 Total
Financial assets:
Commodity derivative contracts 316 - 316 - 316
profit or loss 33,195 - - 33,195 33,195
other comprehensive income 2,491 2,491 - - 2,491
Commodity derivative contracts 418 - 418 - 418
Loans and borrowings 638,453 362,818 - 307,832 670,650
The fair values of cash and cash equivalents (Level 1), accounts receivable and long-term accounts receivable
(Level 3), short-term borrowings (Level 3) are approximately equal to their value as disclosed in the consolidated
statement of financial position. The fair value of long-term receivables was determined by discounting with
estimated market interest rates for similar financing arrangements. The fair value of long-term loans (Level 3)
was determined as a result of discounting using estimated market interest rates for similar financing instruments.
These amounts include all future cash outflows associated with the long-term debt repayments, including the
current portion and interest. Market interest rates mean the rates of raising long-term debt by companies with a
similar credit rating for similar tenors, repayment schedules and other similar main terms. The fair value of
bonds (Level 1) was determined based on market quotations at 31 December 2021 and 2020.
Note 35. Capital and risk management
The Group’s governing bodies pay great attention to risk management issues to provide a reasonable guarantee
for the achievement of the set objectives under the conditions characterised by uncertainties and negative impact
factors. The Group is constantly identifying, describing, estimating and monitoring the possible events that may
affect its activities, and is elaborating measures to prevent them or mitigate their negative impact to the greatest
extent possible if such events do take place.
43
PJSC LUKOIL
Note 35. Capital and risk management (continued)
The Group seeks to actively promote risk management and is presently focusing its efforts on the improvement
of a general enterprise risk management system (ERM) based on the best international practices. The Group is
constantly improving the applicable regulatory methodological risk management base that establishes
requirements aimed at organizing the risk management process at all stages, and defines management standards
for certain risk types of utmost importance, which are uniform for all of Group organisations. The Risk
Committee, a dedicated body under the President of the Company, was set up and began its work in 2011.
The information with regard to key financial risks of the Group is presented below.
Credit risk
The Group’s most significant credit risks include first of all the risk of failure by its counterparties to perform
their obligations in terms of payment for the products supplied by the Group. In order to mitigate these risks, the
Group focuses on partnerships with counterparties that have high credit ratings, accepts letters of credit and
guarantees issued by reputable banks and sometimes demands prepayment for the products supplied. In addition,
it utilises tools to limit the credit risks of a given counterparty.
Another group of credit risks includes risks associated with contractor banks’ activities and potential impairment
of their financial stability. In order to mitigate these risks, the Group is involved in centralised treasury
operations, part of which are aimed at fund raising, investment and operations involving currency exchange and
financial derivatives. The credit ratings of contractor banks are monitored on a regular basis.
The carrying amount of financial assets represents the maximum exposure to credit risk.
Trade and other receivables
Analysis of the aging of receivables:

Not past due 679,265 342,930
Past due less than 45 days 24,879 10,895
Past due from 46 to 180 days 7,204 4,315
Past due from 181 to 270 days 5,463 635
Past due from 271 to 365 days 8,790 11,053
Past due more than 365 days 16,271 443
Total trade and other receivables 741,872 370,271
Not past due accounts receivable are not considered of high credit risk.
Allowance for expected credit losses changed as follows during 2021:
31 December 2020 37,692

Increase in allowance charged to profit or loss 9,085
Write-off (5,172)
Foreign currency translation differences (600)
Other (492)
31 December 2021 40,513
44
PJSC LUKOIL
Allowance for expected credit losses changed as follows during 2020:
31 December 2019 31,287

Increase in allowance charged to profit or loss 5,771
Write-off (2,379)
Foreign currency translation differences 3,679
Other (666)
31 December 2020 37,692
Financial instruments used by the Group and potentially exposed to concentrations of credit risk consist
primarily of cash equivalents, over-the-counter production contracts and trade receivables. The cash and cash
equivalents are held with banks, which are generally highly rated.
The credit risk from the Group’s over-the-counter derivative contracts, such as forwards and swaps, derives from
the counterparty to the transaction, typically a major bank or financial institution. Individual counterparty
exposure is managed within predetermined credit limits and includes the use of cash-call margins when
appropriate, thereby reducing the risk of significant non-performance. The Group also uses futures contracts,
but futures have a negligible credit risk because they are traded on the New York Mercantile Exchange or the
Intercontinental Exchange (ICE Futures).
Liquidity risk
The Group’s liquidity is managed on a centralised basis. There is an efficient global system in place to manage
the Group’s liquidity, which includes an automated system of concentrating and re-distributing the funds,
corporate dealing and also rolling cash-flow forecasts. The liquidity indicators are monitored on a continuous
basis.
Contractual maturities of the Group’s financial liabilities (the Group itself determines the grouping of the
maturity based on contractual maturities and, where relevant, on judgment):
Contractual
Carrying cash flows Less than 12
amount (undiscounted) months 1-2 years 2-5 years Over 5 years
Loans and borrowings,
including interest expense 67,925 98,303 14,972 5,897 41,626 35,808
Bonds, including interest
expense 507,821 609,355 56,535 126,378 113,472 312,970
Lease obligations 185,843 239,418 38,635 30,103 71,025 99,655
Trade and other payables 783,778 783,778 781,949 710 800 319
Derivative financial liabilities 1,377 1,377 1,377 - - -
31 December 2021 1,546,744 1,732,231 893,468 163,088 226,923 448,752
Contractual
Carrying cash flows Less than 12
amount (undiscounted) months 1-2 years 2-5 years Over 5 years
Loans and borrowings,
including interest expense 134,092 173,227 50,966 23,218 47,289 51,754
Bonds, including interest
expense 334,313 407,958 15,295 50,764 135,780 206,119
Lease obligations 193,872 257,533 44,232 27,429 67,514 118,358
Trade and other payables 597,406 597,406 595,465 1,437 141 363
Derivative financial liabilities 418 418 418 - - -
31 December 2020 1,260,101 1,436,542 706,376 102,848 250,724 376,594
45
PJSC LUKOIL
Currency risk
The Group is subject to foreign exchange risks since it operates in a number of countries. The exchange rate of
the Russian ruble to the US dollar produces the greatest impact on transaction results, since the Group’s export
proceeds are denominated in dollars, while the major costs are incurred in Russia and are denominated in Russian
rubles.
As part of the centralised approach to management of the treasury operations and liquidity of the Group, the
risks associated with unfavorable changes in the exchange rates are generally consolidated at the corporate level.
The Company uses an integrated approach to manage its currency risks, including the application of natural
hedging mechanisms, which encompass management of the currency structure of its monetary assets and
liabilities.
The carrying amounts of the Group’s assets and liabilities which form currency risk at 31 December 2021 and
2020 are presented in the tables below and contain balances between Group companies whose functional
currency is different from the currency of the contract.
31 December 2021 USD EUR Other currencies

Financial assets:
Cash and cash equivalents 16,921 63,201 3,185
Trade and other receivables 179,599 17,061 27,161
Loans 326,739 3,135 -
Other financial assets 2,574 4 88
Loans and borrowings (350,565) (53,893) (12,229)
Trade and other payables (6,782) (28,667) (41,124)
Net exposure 168,486 841 (22,919)
31 December 2020 USD EUR Other currencies

Financial assets:
Cash and cash equivalents 2,014 56,041 778
Trade and other receivables 79,401 181 4,516
Loans 260,894 3,452 -
Other financial assets 1,698 2 90
Loans and borrowings (354,100) (41,051) (8,470)
Trade and other payables (29,350) (8,622) (19,875)
Net exposure (39,443) 10,003 (22,961)
The following exchange rates applied:

USD 74.29 73.88
EUR 84.07 90.68
Sensitivity analysis
Analysis of the currency position shows that the Group mainly uses RUR, US dollar and EUR in its operating
activity. Thus sensitivity analysis shows how strengthening (weakening) of these currencies at 31 December
2021 and 2020 would have affected the measurement of financial assets and liabilities denominated in foreign
currencies and affected profit (loss) before taxes. The analysis assumes that all other variables remain constant.
46
PJSC LUKOIL
Profit (loss)
2021 2020
US Dollar (increase by 10%) 16,473 (5,262)
Euro (increase by 10%) (60) 1,121
Russian ruble (increase by 10%) (14,873) 3,873
The weakening of these currencies by 10% will have equal effect on profit (loss) but with opposite sign.
Interest rate risk
The Group is exposed to a significant interest rate risk both in the short- and long-term. A change in interest
rates may affect the cost of funds borrowed by the Group as well as the size of cash flows.
To mitigate this risk, the Group is constantly monitoring market conditions, taking measures to improve the debt
structure by reaching an optimum balance between fixed and variable interest rates, controlling the need for
additional financing and outstanding debt refinancing, extending the term of debt obligations.
The interest rate profiles of the Group are presented below:

Fixed rate instruments:
Financial assets 36,099 35,603
Financial liabilities (691,309) (527,063)
Net exposure (655,210) (491,460)
Variable rate instruments:
Financial assets 36,304 39,523
Financial liabilities (66,641) (132,648)
Net exposure (30,337) (93,125)
Sensitivity analysis for variable rate instruments
A reasonably possible change of 100 basis points in interest rates at 31 December 2021 and 2020 would have
increased (decreased) profit (loss) before taxes by the amounts shown below. This analysis assumes that all other
variables remain constant.
Profit (loss) before taxes

100 bp increase 100 bp decrease
2021
Net financial liabilities (303) 303
2020
Net financial liabilities (931) 931
Capital management
The Group’s capital management objectives are to secure the ability to continue as a going concern and to
optimise the cost of capital in order to enhance value to shareholders. The Company’s management performs
regular assessment of the net debt to equity ratio to ensure it meets the Company’s current rating requirements.
Equity includes share capital, reserves and retained earnings, as well as non-controlling interests. Net debt is a
non-IFRS measure and is calculated as a sum of loans and borrowings, as presented in the consolidated statement
of financial position, less cash and cash equivalents. Net debt to equity ratio enables the users to see how
significant net debt is.
47
PJSC LUKOIL
The Group’s net debt to equity ratio was as follows:

Total debt 757,950 659,711
Less cash and cash equivalents (677,482) (343,832)
Net debt 80,468 315,879
Equity 4,523,184 4,130,766
Net debt to equity ratio 1.78% 7.65%
48
PJSC LUKOIL
Supplementary Information on Oil and Gas Exploration and Production Activities (Unaudited)
Supplementary Information on Oil and Gas Exploration and Production Activities
IFRS do not require the information on oil and gas reserves to be disclosed in consolidated financial statements.
However, management believes that this supplementary information will benefit the users of consolidated
financial statements of the Group.
The information on oil and gas exploration and production activities is presented in six separate tables:
I. Capitalised costs relating to oil and gas producing activities.

II. Costs incurred in oil and gas property acquisition, exploration, and development activities.
III. Results of operations for oil and gas producing activities.
IV. Reserve quantity information.
V. Standardised measure of discounted future net cash flows.
VI. Principal sources of changes in the standardised measure of discounted future net cash flows.
Amounts shown for equity method companies represent the Group’s share in its exploration and production
associates and joint ventures, which are accounted for using the equity method of accounting.
I. Capitalised costs relating to oil and gas producing activities
Total Group's share in

consolidated equity method
31 December 2021 International Russia companies companies
Unproved oil and gas properties 123,833 128,120 251,953 35,405
Proved oil and gas properties 1,689,995 3,760,810 5,450,805 389,168
Accumulated DD&A (1,085,251) (1,367,397) (2,452,648) (130,590)
Net capitalised costs 728,577 2,521,533 3,250,110 293,983

Unproved oil and gas properties 105,907 123,493 229,400 37,901
Proved oil and gas properties 1,645,275 3,558,589 5,203,864 370,006
Accumulated DD&A (980,878) (1,212,856) (2,193,734) (120,843)
Net capitalised costs 770,304 2,469,226 3,239,530 287,064
II. Costs incurred in oil and gas property acquisition, exploration, and development activities

2021 International Russia companies companies
Acquisition of properties - Proved - 1,097 1,097 -
Acquisition of properties - Unproved - 1,333 1,333 629
Exploration costs 12,899 18,100 30,999 1,926
Development costs 51,634 253,987 305,621 17,266
Total costs incurred 64,533 274,517 339,050 19,821

Acquisition of properties - Unproved - 1,443 1,443 -
Exploration costs 8,151 30,862 39,013 237
Development costs 43,959 311,355 355,314 10,824
Total costs incurred 52,110 343,660 395,770 11,061
49
PJSC LUKOIL
III. Results of operations for oil and gas producing activities
The Group’s results of operations for oil and gas producing activities are presented below. Sales and transfers
to Group companies are based on market prices, income taxes are based on statutory rates. The results of
operations exclude corporate overhead and interest costs.

Revenue
Sales 211,112 1,128,834 1,339,946 62,488
Transfers - 1,290,175 1,290,175 2,051
Total revenues 211,112 2,419,009 2,630,121 64,539
Production costs (excluding production taxes) (42,104) (162,453) (204,557) (5,910)
Exploration expenses (4,093) (2,983) (7,076) (28)
Depreciation, depletion and amortisation (104,077) (193,111) (297,188) (8,241)
Taxes other than income taxes (1,069) (1,352,412) (1,353,481) (20,159)
Related income taxes (12,822) (134,102) (146,924) (10,794)
Total results of operations for producing activities 46,947 573,948 620,895 19,407

Revenue
Sales 123,966 645,991 769,957 33,879
Transfers - 572,660 572,660 1,039
Total revenues 123,966 1,218,651 1,342,617 34,918
Production costs (excluding production taxes) (40,583) (158,328) (198,911) (7,395)
Exploration expenses (3,163) (2,951) (6,114) -
Depreciation, depletion and amortisation (77,736) (191,707) (269,443) (8,632)
Taxes other than income taxes (755) (611,640) (612,395) (8,864)
Related income taxes (1,163) (56,455) (57,618) (4,161)
Total results of operations for producing activities 566 197,570 198,136 5,866
IV. Reserve quantity information
Proved reserves are the estimated quantities of oil and gas reserves which according to geological and
engineering data are going to be recoverable with reasonable certainty in future years from known reservoirs
under existing economic and operating conditions. Existing economic and operating conditions are based on the
12-months average price and the year-end costs. Proved reserves do not include additional quantities of oil and
gas reserves that may result from applying secondary or tertiary recovery techniques not yet tested and
determined to be economic.
Proved developed reserves are the quantities of proved reserves expected to be recovered through existing wells
with existing equipment and operating methods.
Due to the inherent uncertainties and the necessarily limited nature of reservoir data, estimates of reserves are
inherently imprecise, require the application of judgment and are subject to change as additional information
becomes available.
50
PJSC LUKOIL
Management has included within proved reserves significant quantities which the Group expects to produce
after the expiry dates of certain of its current production licences in the Russian Federation. The Subsoil Law of
the Russian Federation states that, upon expiration, a licence is subject to renewal at the initiative of the licence
holder provided that further exploration, appraisal, production or remediation activities are necessary and
provided that the licence holder has not violated the terms of the licence. Since the law applies to both newly
issued and old licences and the Group has currently renewed 66% of its licences, management believes that
licences will be renewed upon their expiration for the remainder of the economic life of each respective field.
Estimated net proved oil and gas reserves and changes thereto for 2021 and 2020 are shown in the tables set out
below.
Group's share in
Millions of barrels Consolidated subsidiaries equity method
Crude oil International Russia Total companies
31 December 2019 384 11,358 11,742 273
Revisions of previous estimates 140 (268) (128) 6
Extensions and discoveries 28 373 401 2
Production (39) (549) (588) (16)
31 December 2020 513 10,914 11,427 265
Revisions of previous estimates (139) 175 36 (5)
Purchase/sale of hydrocarbons in place* - 16 16 (4)
Production (30) (568) (598) (14)
31 December 2021 355 10,970 11,325 247
Proved developed reserves

31 December 2020 283 7,210 7,493 104
31 December 2021 229 7,429 7,658 120
*Sale of hydrocarbons in place for equity companies includes transfers of reserves to the consolidated group upon those equity companies
becoming subject to consolidation.
The non-controlling interest share included in the above total proved reserves was 60 million barrels and
61 million barrels at 31 December 2021 and 2020, respectively. The non-controlling interest share included in
the above proved developed reserves was 37 million barrels and 38 million barrels at 31 December 2021 and
2020, respectively. All non-controlling interests relate to reserves in the Russian Federation.
Group's share in
Billions of cubic feet Consolidated subsidiaries equity method
Natural gas International Russia Total companies
31 December 2019 5,868 16,426 22,294 233
Revisions of previous estimates 204 73 277 11
Extensions and discoveries 15 350 365 -
Production (381) (617) (998) (26)
31 December 2020 5,706 16,232 21,938 218
Revisions of previous estimates 521 305 826 10
Purchase/sale of hydrocarbons in place* 2 13 15 (5)
Production (546) (565) (1,111) (25)
31 December 2021 5,693 16,282 21,975 202
Proved developed reserves

31 December 2020 4,118 5,746 9,864 113
31 December 2021 3,847 5,603 9,450 120
*Sale of hydrocarbons in place for equity companies includes transfers of reserves to the consolidated group upon those equity companies
becoming subject to consolidation.
51
PJSC LUKOIL
The non-controlling interest share included in the above total proved reserves was 23 billion cubic feet at
31 December 2021 and 2020. The non-controlling interest share included in the above proved developed
reserves was 14 billion cubic feet and 15 billion cubic feet at 31 December 2021 and 2020, respectively. All
non-controlling interests relate to reserves in the Russian Federation.
V. Standardised measure of discounted future net cash flows
Estimated future cash inflows from hydrocarbons production are computed by applying the 12-months average
price for oil and gas and the year-end exchange rates to year-end quantities of estimated net proved reserves.
Adjustments in this calculation for future price changes are limited to those required by contractual arrangements
in existence at the end of each reporting year. Future development and production costs are those estimated
future expenditures necessary to develop and produce year-end estimated proved reserves based on year-end
cost indices, assuming continuation of year-end economic conditions. Estimated future income taxes are
calculated by applying appropriate year-end statutory tax rates. These rates reflect allowable deductions and tax
credits and are applied to estimated future pre-tax net cash flows, less the tax bases of related assets. Discounted
future net cash flows have been calculated using a ten percent discount factor. Discounting requires a year-by-
year estimate of when future expenditures will be incurred and when reserves will be produced.
The information provided in the tables set out below does not represent management’s estimate of the Group’s
expected future cash flows or of the value of the Group’s proved oil and gas reserves. Estimates of proved
reserve quantities are imprecise and change over time as new information becomes available. Moreover,
probable and possible reserves, which may become proved in the future, are excluded from the calculations. The
arbitrary valuation requires assumptions as to the timing and amount of future development and production
costs. The calculations should not be relied upon as an indication of the Group’s future cash flows or of the value
of its oil and gas reserves.

Future cash inflows 2,796,202 51,116,716 53,912,918 1,095,313
Future production and development costs (1,468,599) (40,375,139) (41,843,738) (584,612)
Future income tax expenses (164,013) (1,815,645) (1,979,658) (116,430)
Future net cash flows 1,163,590 8,925,932 10,089,522 394,271
Discount for estimated timing of cash flows (10% p.a.) (499,839) (4,590,317) (5,090,156) (149,683)
Discounted future net cash flows 663,751 4,335,615 4,999,366 244,588
Non-controlling share in discounted future net cash
flows - 27,545 27,545 -

Future cash inflows 2,361,227 28,537,502 30,898,729 639,463
Future production and development costs (1,462,485) (23,445,365) (24,907,850) (392,022)
Future income tax expenses (108,293) (679,792) (788,085) (76,904)
Future net cash flows 790,449 4,412,345 5,202,794 170,537
Discount for estimated timing of cash flows (10% p.a.) (306,616) (2,345,485) (2,652,101) (84,307)
Discounted future net cash flows 483,833 2,066,860 2,550,693 86,230
Non-controlling share in discounted future net cash
flows - 12,861 12,861 -
52
PJSC LUKOIL
VI. Principal sources of changes in the standardised measure of discounted future net cash flows
Consolidated companies 2021 2020

Discounted present value at 1 January 2,550,693 4,227,145
Net changes due to purchases and sales of minerals in place 5,385 23
Sales and transfers of oil and gas produced, net of production costs (1,065,007) (525,197)
Net changes in prices and production costs estimates 10,666,754 (4,640,038)
Net changes in mineral extraction taxes (7,609,605) 2,622,343
Extensions and discoveries, less related costs 198,810 86,574
Previously estimated development cost incurred during the year 291,048 360,474
Revisions of previous quantity estimates 105,832 20,422
Net change in income taxes (583,505) 381,202
Accretion of discount 267,681 461,076
Other changes 171,280 (443,331)
Discounted present value at 31 December 4,999,366 2,550,693
Group's share in equity method companies 2021 2020

Discounted present value at 1 January 86,230 125,573
Net changes due to purchases and sales of minerals in place - (60)
Sales and transfers of oil and gas produced, net of production costs (38,442) (18,659)
Net changes in prices and production costs estimates 339,838 (116,411)
Net changes in mineral extraction taxes (146,612) 74,626
Extensions and discoveries, less related costs 4,227 1,047
Previously estimated development cost incurred during the year 24,887 26,199
Revisions of previous quantity estimates (10,861) 2,013
Net change in income taxes (24,492) 14,268
Accretion of discount 13,491 17,621
Other changes (3,678) (39,987)
Discounted present value at 31 December 244,588 86,230
53

LUKOIL FS IFRS 4Q2021 Eng

Uploaded by

Copyright:

Available Formats

LUKOIL FS IFRS 4Q2021 Eng

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

LUKOIL FS IFRS 4Q2021 Eng

Uploaded by

Copyright:

Available Formats

PJSC LUKOIL

CONSOLIDATED FINANCIAL STATEMENTS

President of PJSC LUKOIL Chief accountant of PJSC LUKOIL

Other comprehensive income, net of income taxes

Earnings per share

Note 2021 2020

Note 1. Organisation and environment

Business and economic environment

Note 2. Basis of preparation

Functional and presentation currency

Note 3. Summary of significant accounting policies

Note 3. Summary of significant accounting policies (continued)

 the fair value of the consideration transferred; plus

Transactions eliminated on consolidation

Note 3. Summary of significant accounting policies (continued)

Foreign currency transactions

Note 3. Summary of significant accounting policies (continued)

Cash and cash equivalents

Non-derivative financial liabilities

Note 3. Summary of significant accounting policies (continued)

Property, plant and equipment

Buildings and constructions 5 – 40 years

Production and related overhead costs are expensed as incurred.

Note 3. Summary of significant accounting policies (continued)

Impairment of non-current non-financial assets

Asset retirement obligations

Note 3. Summary of significant accounting policies (continued)

Assets classified as held for sale

Note 3. Summary of significant accounting policies (continued)

Earnings per share

Provisions and contingencies

Changes in accounting policies and disclosures

 amendments to IFRS 9 Financial Instruments;

Note 4. Use of estimates and judgments

 estimation of oil and gas reserves;

Note 5. New standards and interpretations not yet adopted

 Onerous contracts – Cost of Fulfilling a Contract (Amendments to IAS 37 Provisions, Contingent

Note 6. Cash and cash equivalents

31 December 2021 31 December 2020

Note 7. Accounts receivable, net

31 December 2021 31 December 2020

31 December 2021 31 December 2020

Note 9. Prepaid taxes

31 December 2021 31 December 2020

Note 10. Other current assets

31 December 2021 31 December 2020

Note 11. Investments in associates and joint ventures

Carrying value of investments in associates and joint ventures:

Note 11. Investments in associates and joint ventures (continued)

31 December 2021 TCO CPC SCPC Others Associates Total

31 December 2020 TCO CPC SCPC Others Associates Total

2021 TCO CPC SCPC Others Associates Total

2020 TCO CPC SCPC Others Associates Total

Note 12. Property, plant and equipment

Exploration Refining, marketing

Note 12. Property, plant and equipment (continued)

Exploration Refining, marketing

Exploration and evaluation assets

Note 12. Property, plant and equipment (continued)