ROGTEC Talks to: Prem Ballabh Pandey, CEO of Imperial Energy
Mr Pandey, you have been the regional CEO for Imperial Energy for the last 6 months. Please explain to our readers what your objectives have been during this period, and what your focus is for 2013?
Basically my objectives have been to find new ways and technologies to improve productivity of the existing fields and identify new plays which can add to the economically viable production of Imperial Energy.
Imperial Energy was purchased by ONGC Videsh as part of their strategy to enter the Russian market. How would you describe the success of the purchase? Do you feel there will be further acquisitions in the future?
Success and failure cannot be assessed in short period of time. Uncertainty is key ingredient of E&P industry. Yes, nature of reservoirs and high level of taxes have definitely hit the bottom line of the Company. Regarding future acquisition, certainly we are open in case we find some interesting opportunities.
Is Imperial Energy looking to expand its portfolio of fields in the Tomsk region or in other parts of Russia?
Russia is one of the focus countries for India and for us for future expansion of portfolio.
Has the buyout enabled Imperial Energy to access new technologies or working practices from ONGC Videsh? If so, what are they?
Definitely, the corporate governance and sustainable development are the key parameters of ONGC Videsh which have been introduced in Imperial Energy. Induction of new technologies would depend on fiscal regime. At the current netbacks it is economically unviable to induct new technologies.
What would you consider as the key technologies that you are using at the moment to aid your exploration, drilling or production activities?
Majority of our existing reservoirs are having low permeability and porosity. Conventional methods of drilling and frac have not yielded desired results. We are scouting for new technology which can enhance the production from these reservoirs coupled with tax concessions.
We understand Imperial Energy still utilizes its own internal contracting and service companies to conduct its drilling operations, which is contrary to the industry trend of selling and outsourcing such services. What benefits does running your own service crews bring and why have you elected to maintain these service companies?
Drilling company was part of group structure we acquired. We have been using our drilling services as well as outsourcing drilling services as per requirement and suitability. We are considering hiving off rig company for possible sale or other arrangements.
Imperial Energy is currently looking for experienced service providers with solutions for tight oil plays. How important will these plays be for the future production of the company? Will you look to use multi stage and hydro fracing technologies to develop these reservoirs?
With the proposed relaxation in MET by the Russian Federation, we are examining whether the economic exploitation of tight oil reservoirs and Bazhenov resource play would be possible. Hence, we are looking for a technology partner who has knowledge and adequate experience of exploiting similar tight oil reservoirs. Simultaneously we are expecting more tax concessions to ensure economic viability of inducting new technologies.
How do you see the Russian market developing over the next 5 years?
Yes, certainly recent move of the Russian government giving MET relaxation is the right step towards attracting more investment in the E&P activities. However production from tight oil reservoirs by small and medium operators, development of Bazhenov shale would perhaps require more tax concessions and perhaps shifting from volume based taxation to profit based taxation.
