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1. Operators are under increasing governmental pressure regarding environmental and tax compliance. What effect, if any, is this having on Baker Hughes's strategy for the region?

Baker Hughes has a global program that we have labeled "Completely Compliant", or we train 100% of our employees in Russia and around the globe what "Completely Compliant" means. It means complete compliance with all laws, both laws of the Russian Federation and other jurisdictions that apply, as well as compliance with our Health, Safety & Environmental Management System, and our Core Values. We work hard to ensure the health and safety of our employees and to be a responsible corporate citizen, not harming the environment.

We conduct regular and meticulous environmental and safety audits of our facilities. We pay our taxes promptly and properly declare the value of any imported goods or equipment.

From a business standpoint our Fluids Environmental Service (FES) provides safe handling and disposal of drilling fluids and waste cuttings.

2. At present there is a shortage of qualified personnel within the OFS market in Russia. Is recruitment of the relevant talent proving challenging?

This is a top issue for the industry in general and one which we face daily. Baker Hughes is growing very rapidly in Russia. Our number of employees, 98% Russian-speaking, has more than tripled in the past 18 months. This places a huge strain on the organization's ability to maintain our corporate culture and impart the level of skill needed to provide the excellent execution at the well-site that Baker Hughes is known for worldwide.

In response to this challenge we have taken several actions. First, we have geared up our graduate recruitment and cooperation programs with oil and gas faculties at leading Russian universities. Second, we have or will be commissioning training facilities in Noyabrsk and Tyumen to conduct both technical and non-technical training. Third, we have formal Employee Development and Succession Planning processes that identify areas of needed skill development and help develop actionable plans to fill the gaps. Fourth, this year we are sending some of our future leaders on foreign assignments to develop broader skills, learn new technologies and network into the global Baker Hughes organization. And fifth, we have begun looking outside the Russian Federation for Russian-speaking service technicians to help support our business growth.

3. Which product/technology line offered by Baker Hughes Russia do you feel will have the biggest impact in the region during the course of the next year to eighteen months?

There are many opportunities for Baker Hughes technologies to add value. A few of the more significant ones include:

• AutoTrak rotary steerable systems, which are now enabling Exxon-Mobil to drill 12,000 meter horizontal sections (a world record) on Sakhalin. Most of the world's longest horizontal wells have been drilled with AutoTrak technology. Likewise, our CoilTrak technology for Coiled-tubing drilling is being used very successfully to side-track in slim-holes in the Russian Federation, including under-balanced applications.
• Equalizer, an inflow control device that delays coning and subsequent water production, is currently being installed in Russian oilfields. Given that water-cut is common in produced fluids, this technology has a short payback time for our customers.
• Beacon Centers, now being established in Moscow and Noyabrsk, will make a significant contribution to our performance optimization efforts. They allow our experts to monitor well and job operations thousands of miles away. As many of our customers projects are in isolated locations and, as we have stated, the number of experts is limited, Beacon Centers allow our best engineers and technicians real-time data and the ability to intervene to optimize operations. Ultimately, their potential is far greater. For example, imagine a directional driller geo-steering a well in Eastern Siberia from a Beacon Center located in Moscow. We are already doing this in other parts of the world.
• And there are many, many more that are either being trialed right now in Russia, or are soon to be introduced to the market.

4. Russian Service companies are investing more and more into R&D in an attempt to compete with Western companies such as Baker Hughes. Do you feel the competition is hotting up?

We see the increased competition as a positive sign for the industry. Baker Hughes intends to build for the long-term in Russia. We have established a research center in Novosibirsk, where we do basic geoscientific research. We are evaluating expanding the scope of our own local R&D efforts. We feel there is opportunity for Baker Hughes to develop products specifically for the local markets here. That has been a critical strength of Baker Hughes' over our 100-year history, and we plan to apply that same approach in Russia. Ultimately, this approach gives our customers the best solutions at the most efficient cost.

5. How do you see the OFS market developing in Russia over the next decade?

The forthcoming decade will continue to be an exciting one for the oilfield service industry in Russia. We believe that the consolidation within our industry will continue. Some of the VIOC's have reiterated their plans to divest their in-house OFS units via trade sales or IPO's. Interest in acquiring smaller, and regionally based service providers will remain high, and Baker Hughes will consider such acquisitions seriously.

At the same time, our clients will place increasing emphasis on green field developments, featuring complex geologies and remote locations. Given the higher spread costs compared to the brownfields of Western Siberia, we expect the focus of evaluation to shift more to cost-in-use rather than tendered price. Service providers will continue to find ways to effectively apply both new and existing technologies to help contain the escalating cost per ton of production.

6. What role do you see Baker Hughes Russia taking?

Baker Hughes Russia will continue to develop as a major service and technology provider to our clients in the Russian Federation. We expect to be among the industry consolidators. We continue to invest in the infrastructure needed to support world-class operations. We will compete in all market tiers.

Labels: Baker Hughes, Interview, Mike Davies, Oil and Gas, Russia

posted by The Rogtec Team @ 15:13 

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