. almost exclusively by means of purchasing existing operations. It's a sound strategy. When oil producers invest in distribution, they strengthen their ties to markets where they may be better able to sell crude oil in times of global oversupply. Moreover, integrating into distribution can potentially reduce operating costs, primarily because a producer doesn't have to rely on negotiating and enforc ing a network of agreements by which it sells oil to intermediaries in other countries. Further, this vertical integration enables LUKOIL to smooth its profits by operating in the ever-changing portion going to production versus distribution. Concomitantly, LUKOIL has rebranded its acquisitions to gain uniformity in its image, which also helps to promote sales better.