Note From the Editor, ROGTEC Magazine
Welcome to issue 39 of ROGTEC Magazine. As a quarterly publication, we will be celebrating a decade of publishing Russia and the Caspian’s leading upstream publication in our next issue. During the last 10 years we have seen the market change, evolve, crash and boom – not necessarily in that order! What we are currently witnessing is an enforced downturn due to the well documented crisis in Ukraine, and also falling oil prices.
The sanctions imposed by the US and EU have clearly affected Russia’s economy, and coupled with depressed oil prices the regional short term outlook is a little hazy. Never the less, the last few months have been interesting in the Russian oil patch. The biggest news has been Russia’s record breaking 400 billion dollar gas deal with China, and the corresponding Strength of Siberia pipeline that will be built to carry the purchased gas. In theory due to be operational in 2018, the industry will watch with interest the progress of the this large and technically challenging pipeline construction project. The price of the gas has not been released, however the Chinese are known for ensuring favourable terms in their contracts so we can surmise that such huge volumes came at a reduced price.
The Russian Government has also made itself clear that should investment dry up and the Western Majors pull out, that they will look eastwards for project partners. Although we have seen a number of deals signed with Asian companies recently – including the previous mentioned giant gas deal with China, the sale of a 10%, 1 billion dollar, stake in the Vankor field by Rosneft to the CNPC and the recent agreement between Gazprom Neft and Petrovietnam to investigate development the Dolginskoye offshore Arctic oilfield – there has been no sign of the Western Majors pulling out of the market. A pause in certain operations maybe, but certainly not a withdraw. Indeed, BP’s Bob Dudley recently confirmed his companies stance on Russia, stating that “We remain long-term partners. We will not do anything to violate sanctions but sanctions don’t include doing business in Russia,” He also said the company had, “absolutely no intention”, of selling its 18.5 percent stake in Rosneft, and he would continue to serve on the board of the Russian energy firm. “There’s even a possibility BP will have two seats on the Rosneft board next year,” he continued.
I think the path forward to foreign tech suppliers, service companies and operators is clear – Russian companies look to work with long term partners that will show commitment to the market during the inevitable ups and downs. Fair-weather friends that pull out at the first sign of trouble will be seen as just that, and will be discarded in favour of those who show commitment in riding out the storm in solidarity with their Russian friends and partners.
Other international news worth noting is the planned takeover of Baker Hughes by Halliburton. Conceived ostensibly to guard both companies from the low price of oil, it will be interesting to see in what form antitrust laws in the US allow the takeover to progress. It is rumoured that various divisions will have to be sold off and it will be interesting to see how the deal affects the oil field services market globally, and specifically in Russia.
Back to this issue of ROGTEC Magazine, and we have a great edition to finish the year. Our roundtable feature focusses on Power Generation, and we welcome a number of new companies to ROGTEC’s ever popular feature. We also welcome Energy Aspects on board as a contributor, with the first of a two part article looking at Gazprom and Russia’s current and future gas production. The second part will be published in the March 2015 issue, and will focus on the production outlook and market risks. On top of this we have two great pieces from Rosneft looking firstly at the benefits of fibre glass pipes for drilling at Udmurneft’s fields and secondly at Petroleum Potential of the Middle Devonian Deposits at the Sorochinsko-Nikolskoye fields. Other articles include a great piece from SPD on self-healing pipe dope, a look at the future of the Russian drilling market by RPI, plus a review of a private company event that we organized on behalf of Drillmec at the end of October at the Kempinski Baltschug Hotel. Showcasing their latest hydraulic rig technology, the event was attended by key regional operators and drilling companies and was deemed a great success by all who attended.
To note in your diary, we have confirmed the date for the third instalment of our hugely successful drilling event, the RDCR, www.rdcr.net, as the 9th April 2015. The RDCR will be again be held at the fantastic Kempinski Baltschug Hotel in the centre of Moscow. The format has been amended significantly for this year, with (very) limited speaking opportunities for sponsoring companies. Please contact us to if you are interested in participating. In other event news, ROGTEC Magazine has had a busy few months on the road. As has always been the case, we ensure that we attend all the key regional events in person with a booth. This cannot be said for other regional titles, however as a courtesy to our advertisers and indeed the event organisers, we feel that supporting these shows is important. It was great to see our friends and colleagues at KIOGE and the new SPE Kazakhstan event, to have ROGTEC reach as far as Sakhalin Island for the Sakhalin Oil and Gas event, and to have our regional representative attend a number of conferences held in Moscow.
Best regards,
Nick Lucan
Editorial Director
