Ok executing a command via PHP can be done in many different ways, something like:
$command = 'gunzip -c /path/src /path/dest';
$escapedCommand = escapeshellcmd($command);
system($escapedCommand);
or also
shell_exec('gunzip -c /path/src /path/dest');
will do the work. Now it's a matter of what command to execute, under Linux there's a nice command line tool called lzop which extracts orcompresses lzop files.
You can use it via something like:
lzop -dN sources.lzo
So you final code might be something as easy as:
shell_exec('lzop -dN s3://my_bucket/my_logfile');