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Lukoil in the UAE: the reason of relocation of oil company to Dubai, as well as its prospects of development in the Emirates

Article image: Lukoil in the UAE: the reason of relocation of oil company to Dubai, as well as its prospects of development in the Emirates

In the second half of 2012 "Lukoil Overseas" - a subsidiary of one of the largest international companies "Lukoil" – was relocated from Moscow to Dubai together with its staff. The new office of "Lukoil Overseas" is more spacious compared to Moscow and it is located in Internet City free trade zone. Oil company leases office from one of the largest developers in Dubai - Dubai Properties Group.

Why did Lukoil move to Dubai?

According to experts, the main reasons for relocation to Dubai of a large number of foreign oil companies, including "Lukoil Overseas" are the following:

    • Attractive tax system

      Primarily the UAE is interesting to foreign oil and other companies by low corporate taxes, as well as possibility of obtaining status of a resident company. In addition, employees of Lukoil in Dubai do not have to pay income tax, which is compulsory for payment in Russia.

    • Additional prospects

      The main reason for moving of Lukoil to Dubai - proximity to strategic assets in Uzbekistan and Iraq. Since the United Arab Emirates, including Dubai have impressive oil reserves, the relocation provides great opportunities for cooperation with other oil companies and other organizations linked with this industry. Another plus - an opportunity to participate in attractive business projects of the UAE and other countries.

    • Savings of costs

      First of all, lease of prestigious office in Dubai is cheaper compared with office buildings in Moscow. Second, highly developed infrastructure and acceptable level of expenses incurred for staff accommodation allow to arrange ideal conditions for work. For your information - more than 400 employees of Lukoil Overseas Ltd as well as members of their families moved to Dubai.

For reference

"Lukoil Overseas" was established in 1997. The volume of oil production in 2012 constituted 68.4 million tons, which is 13% more than in 2011. The company’s revenue for 2012 constituted approximately 3.2 billion USD and net profit - 1.4 billion USD. Total reserves of "Lukoil Overseas" as of December 2012 constituted 17.3 billion barrels, of which about 24 trillion cubic feet of natural gas and 13.4 billion barrels of oil.

The company is engaged in oil production in 22 countries, such as Kazakhstan, Vietnam, Azerbaijan, the countries of the Middle East, North Africa. Totally "Lukoil Overseas" is engaged in 27 projects, in more than half of which it performs the duties of an operator.

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