Essay on PESTLE, PORTER and SWOT analysis of LUKOIL

Words: 2620
Pages: 11

Alina Belkina
1. Short overview of LUKOIL

Oil and gas
Moscow, Russia
Vagit Alekperov
Petroleum, Natural gas, Petrochemicals
Increase US$ 139.2 billion (2012)
Net income
Increase US$ 11. billion (2012)

LUKOIL, a vertically integrated oil company, and carries out exploration, acquisition, integration and subsequent efficient development of oil and gas fields outside the Russian Federation to facilitate the transformation of LUKOIL into a transnational energy corporation.
LUKOIL operates in 25 countries (the most major of them are Russia, Azerbaijan, USA, Georgia, Turkey and Czech Republic). Net income in 2013 is $3.105 billion. Basic earnings
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Its share is 12%. This indicator makes the country attractive for the investors. Consequently, LUKOIL could use positive investment climate of Russia as the company’s benefit.

6. Taxes
Nowadays there are three main taxes which have influence on economic in Russia:
a) Corporate tax rate – 20%
b) Personal income tax rate – 13%
c) Sales tax rate – 18%

Accordingly to these indicators the corporate tax rate is quite low in comparison with Japan – 38,01%, United Arab Emirates – 55%, US – 35%. Therefore, it is opportunity to increase a profit (low taxes increase net profit). We are analyzing oil and gas industry in Russia. Fortunately most of deposits are situated in cold geographical areas like Tyumen Region, called Extreme North or Far North. Government gives a lot of benefits like people who work there are used to receive an extra grade of payment, referred to as the "Northern Bonus", as well as other benefits, including extra vacation, extra disability benefits, extra retirement benefits, and housing benefits. LUKOIL won’t increase outflow of money into pension funds etc.

4. Technological factors (PESTLE)
New technologies are an important competitive advantage of LUKOIL Group.
Key technological aspects:
1. The company conducts R&D to develop new technologies and upgrade the existing ones.
2. Cooperation with national projects is actively developing, including the Skolkovo innovation project and the RUSNANO Corporation.
3. Great attention is paid to