The credit rating of PJSC “LUKOIL” (hereinafter, the Company or the Group) is based on the Company’s strong market position, very high scores for geography, profitability, debt service, liquidity and cash flow, very large size of business, very low leverage, strong business assessment and a high level of corporate governance.
PJSC “LUKOIL” is the second largest vertically integrated oil and gas company in Russia in terms of production volumes, with a diversified oil refining and sales structure. The Group’s hydrocarbon production amounted to 1.8 mln barrels of oil equivalent per day in 2025, including 74.9 mln tons of oil and 17.43 bln cubic meters of gas. The volume of refining was 41.7 mln tons in 2025.
KEY ASSESSMENT FACTORS
The strong business assessment and very strong assessment of geography are based on the low production costs and expenses for replenishing the raw material base, a high level of hydrocarbon reserves, high indicators of volume and depth of refining, and very high diversification of production assets, sales channels and markets.
The high assessment of corporate governance takes into account high scores for management strategy, very high score for management structure, and the high score for financial transparency. The scale of the Group’s operations explains the specifics of its structure.
The very high business profitability is ensured by a number of factors, mainly high operational efficiency, low production costs, and effective monetization channels. The very high profitability per barrel is due, among other things, to significant refining volumes and the high quality of refining facilities.
Very low leverage and very high coverage assessment. The Company’s net debt was negative in 2022 (according to ACRA’s estimates) and 2023–2025. The Agency expects the Group’s total debt to decline further. ACRA estimates the weighted average ratio of total debt to FFO before net interest payments for 2023–2028 at 0.19x. According to ACRA’s estimates, the Company’s interest income has exceeded interest expenditures since 2022, and therefore the Agency’s debt servicing is assessed by the Agency as very high.
Very strong liquidity and very high cash flow assessment. Given the free cash flow (FCF) before dividend payments in the period from 2026 to 2028 projected by the Agency, a significant amount of accumulated cash, and the Company’s extensive fundraising opportunities, the Agency assesses the Group’s liquidity and cash flow as very strong.
KEY ASSUMPTIONS
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Average price of Russian oil for taxation purposes at USD 59–70/bbl in 2026–2028;
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Average annual USD/RUB exchange rate at 78.1–94.3 in 2026–2028;
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Dividend payments at 100% of the Company’s adjusted FCF for 2026–2028.
POTENTIAL OUTLOOK OR RATING CHANGE FACTORS
The Stable outlook assumes that the credit rating will highly likely stay unchanged within the 12 to 18-month horizon.
A negative rating action may be prompted by:
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Weighted average ratio of total debt to FFO before net interest payments exceeding 1.0x;
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Weighted average ratio of FFO before net interest payments to falling below 8.0x;
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Significant changes to the industry tax burden;
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Considerable limitation of exports due to sanctions pressure.
RATING COMPONENTS
Standalone creditworthiness assessment (SCA): aaa.
REGULATORY DISCLOSURE
The credit rating has been assigned to PJSC “LUKOIL” based on the following methodologies: the Methodology for Assigning Credit Ratings to Non-Financial Corporations under the National Scale for the Russian Federation to calculate the SCA and determine the credit rating and the credit rating outlook of PJSC “LUKOIL” under the national scale for the Russian Federation and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities to ensure consistent and uniform application of ACRA’s methodologies, rating scales, models, and key rating assumptions.
The credit rating of PJSC “LUKOIL” assigned under the national scale for the Russian Federation was published by ACRA for the first time on July 28, 2023.
The credit rating was last published on July 15, 2025.
The credit rating and its outlook are expected to be revised within one year.
The credit rating was assigned based on data provided by PJSC “LUKOIL”, information from publicly available sources, and ACRA’s own databases. The rating analysis was performed using the IFRS accounting (financial) statements of PJSC “LUKOIL” as of December 31, 2025.
The credit rating is solicited and PJSC “LUKOIL” participated in its assignment.
In assigning the credit rating, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.
ACRA provided no additional services to PJSC “LUKOIL” during the year preceding the rating action.
No conflicts of interest were discovered in the course of credit rating assignment.
