The ROGTEC Interview: Alexey Schebetov, General Director, Ph.D., MBA, R&D Center for Gas&Oil Tech
Alexey, this year R&D Center for Gas&Oil Tech is celebrating its 20th anniversary, which is a great achievement in itself, considering the challenges of sustaining business in Russia. What is the company’s story so far?
I was lucky enough to witness its establishment and to work at ground zero. In 2001, teachers and associates of the gas professorate of the Gubkin Oil and Gas University decided to establish a research and development institute following the request from some of the oil and gas companies. At the beginning we were simulating the development of gas and condensate fields, designing the construction of horizontal oil and gas wells in Yamal, developing techniques to forecast the development efficiency of gas-hydrate deposits. That is why the name of the company, i.e. gas and oil technology research-and-development manufacturing company, has the word “gas” in the first place. Supervising well construction and workover crews has become the most successful activity area due to the foreknowledge and experience of our main founder and driver, the patriarch of the domestic drilling supervising – Valery Kulchitskiy, Professor, Ph.D..
R&D Center for Gas&Oil Tech is the largest specialized supervision company, having more than 800 highly qualified field supervisors carrying out the supervision of rig-up operations, drilling, sidetracking, well development, well servicing and workover, industrial safety, and labour safety in the fields for Rosneft, Gazprom Invest, LUKOIL, Gazprom Neft and Tatneft and others. Practically all of Russia’s producing areas and oil and gas companies have worked with us. In addition, we conduct geology and engineering studies for drilling processes and well workovers, developing software and conducting occupational retraining.
That is very interesting, please, tell us what is the company’s secret of success? From a small group of higher education professionals, R&D Center for Gas&Oil Tech has developed into a significantly sized business.
It appears that the basis of success for R&D Center for Gas&Oil Tech lies in the quality of our carefully controlled service. We achieve this through our unique team of self-motivated and talented professionals guided by our experienced management team which has close academic ties to the leading oil and gas university in Russia – the Gubkin Oil and Gas University. Many of our employees are university staff professors or associate professors who have flexible work schedules at Gubkin University.
As a result of this, for twenty years the company has been actively involved in the development of specialized Drilling Supervisors. The company’s employees have defended thesis’s, written numerous articles and monographs, patented inventions, and software products, reported at scientific and training conferences, forums and congresses. We sometimes joke that we are poor businessmen since all the profit has been invested back into the company’s development and into scientific research, education and attracting young scientists and specialists. Primarily we see our mission as the intellectualization of oilfield services.
More recently, all our efforts have been directed at advancing the status and prestige of the Drilling Supervisor role. We participated in the panel – Supervision of Drilling and Oil and Gas Production – at the RDCR – Well Engineering Forum in 2019. This was the key event where the actual issues of supervision development in Russia were discussed in an open dialogue between the supervision companies and the representatives from the oil and gas companies. We have received a lot of positive feedback and thanks from the delegates for the extraordinarily successful discussion panel and we have received requests to continue holding such thematic conferences.
Tell us how you joined R&D Center for Gas&Oil Tech and what is your current role there?
I started my working life in R&D Center for Gas&Oil Tech from the first day it was established in 2001. At that time, I specialized in hydrodynamic simulations for gas fields, not in drilling supervision. That is why, in 2007, when we felt a shortage of orders for simulations, I continued my career in foreign companies. After 6 successful years in engineering, I decided to prove myself in management roles. R&D Center for Gas&Oil Tech sponsored my education at the Vienna University and after graduation an MBA course, I came back to apply my new knowledge and realize my business ambitions. As a result, since 2013, I have walked the path from a Development Manager to Director General contributing to the successful transformation of a medium size company into a major dominant company with an annual turnover of more than 1 billion rubles. As for my role of the General director I can tell you that I must bear personal responsibility for practically everything: for strategic planning, finances, human resources, safety arrangements and public relations with our customers. But this is the burden of all business leaders in Russia, and I am not an exception here. Nevertheless, regardless of all difficulties and challenges I am incredibly happy with my decision to return to R&D Center for Gas&Oil Tech.
How could you characterize your management style?
I never understood a stereotype of a “boss” which has developed since Soviet times. Then, people believed that a true boss must be sitting in a leather-covered chair in a big office and yells at all his subordinates. It was believed that the louder a boss is yelling the better he “manages”. It has been a while since this style stopped working. I am an advocate openness and personal involvement into the company’s business. I believe that in this way I would maximize each employee when they see the importance and demand for their work which benefits the entire company. I never let myself raise my voice in front my employees, let alone, use profane language, or belittle people. Although, I am reminded by many that both employees and competitors often misuse such openness. Yes, in some instances people can take advantage of this but in the long-time perspective, such a management approach proves
its worth.
Overall, I can say that congeniality and building a team centric environment prevails, and everybody is ready to support their colleagues. We develop young specialists not only in skill but also in person. We reward initiative, not punish it, contributing to the personal fulfillment of each employee. I assign a regional representative in every region and delegate sweeping powers to them. In fact, the regional representatives are our richest asset.
How is the role of supervising in the oil and gas industry currently viewed?
Supervising has evolved into a service itself. Since the Ministry of Labor and Social Welfare issued the standard (27th of November 2014), the drilling supervisor has become a standalone profession. With the transition of many oil companies to contracting drilling services using the daily rate approach, the importance and responsibility of the supervisor have multiplied. Now a drilling supervisor has become the central link in the process of well construction. It is the supervisor’s qualification, his leadership skills and managerial abilities that determine the main driver the quality of well construction, delivered on time, without accidents and complications, without environmental damage and incidents, within the projected budget.
Hence the major problem of supervision arises, namely, the shortage of specialists in the labour market who have the experiencing matching the requirements of the role. For a drilling crew to have a successful operation a supervisor must combine several roles: a leader; a mediator; a coordinator; a problem solver, a leader making decisions; a coach; a mentor; a teacher; and lastly a businessman. According to the words of a well-known foreign specialist John Mitchell, “A modern day supervisor consists of 30% of leadership, 30% of management, 30% of technical expertise and 10%
of business”.
Why is the labor market experiencing the shortage of qualified supervisors? What lines of approach do you see to resolve this problem?
As I see it, the shortage of supervisors emerged from a set of industry specific problems. Using the example of the HR service in R&D Center for Gas&Oil Tech it is obvious that the level of proficiency and skills of the newly hired employees is decreasing each year. This means that today’s specialists are no longer busy with their own self-development and professional retraining, knowing that they could always find a job in the oil industry. This is how we get that notorious “labor turnover” which is pretty high in the oil and gas industry.
Another factor which causes the shortage is the demographic situation in Russia, and because of this, the deficit in the labour pool of qualified oil and gas professionals. To qualify as a drilling supervisor the drilling contractors require their supervisors to have a higher education degree in drilling, have 10 years of service in oil and gas sphere, 7 of which must be in an engineering position at a drilling site, etc. These requirements do not match the current status of the labour market in Russia.
The only way out in this difficult situation is to increase the reserve of drilling supervisors from the ranks of the younger specialists. But it is impossible for a private supervision companies to create such a talent pool on their own due to the financial costs. Currently the higher education institutions are not geared to take on the responsibility of training young specialists, fitting the requirements of the industry. Oil companies are also not quick to invest funds into the training and development of drilling supervisors since they also experience the common problem of labor turnover. Therefore, good will and joint actions of all the stakeholders are particularly important. Oil companies, when signing contracts, should expand the qualification requirements placed on drilling supervisors to involve young specialists into the work activity, albeit in a limited way. The oil and gas higher educational institutions should adapt the educational process to specific needs and requirements of supervision companies, up to and including the establishment of specialized departments and postgraduate programs.
In turn, supervision companies should take on the responsibility of hiring and maintaining the human reserve of drilling supervisors. To my mind, if we do not jointly start to prepare the reserve today, in 3 years we won’t be able to maintain the current number of drilling supervisors in the country.
It is important to note that R&D Center for Gas&Oil Tech has successfully trained drilling supervisors from scratch from a number of postgraduate Gubkin University students in partnership with RN-Yuganskneftegaz.
We were the first to realize that drilling supervision is a specific type of professional role which should be taught in a specific way. Therefore, the Academy of Drilling Supervising and Oil and Gas Production was established and the experts of R&D Center for Gas&Oil Tech actively participated in the implementation of occupational retraining course – Technological Supervision and Well Construction Control. The course was carried out by the Center for Innovations Expertise under the umbrella of the Gubkin University. For two decades we provided engineering and industrial work placements for the graduates and postgraduates of the Gubkin University and some other universities.
As we know, many oil service companies suffered greatly during the pandemic in 2020. What was the impact on your company?
I won’t hide it, it also hit us pretty hard. During the pandemic we had to implement various anti-COVID activities: observations, purchasing masks and sanitizers, changes to shift patterns and rotations and other financial costs, since such expenses had not been planned in the budgets. All through 2020 we worked under financial strains, and, unfortunately, neither our customers nor the government have reimbursed our expenditures. Due to our strict financial and labour discipline and at the cost of 60% in lost margin, we managed to maintained the smooth functioning of the company to comply with all our contractual obligations.
Another challenge has been the difficult atmosphere of uncertainty that prevails during the ongoing pandemic. It affects both my colleagues and myself. I have not always been confident in my decisions when having insufficient certainty and information. Operational staff who found themselves isolated at the sites, during the 3-month lockdown, grew extremely tired while the remaining employees who were on a relief shift experience financial difficulties. The office employees got used to the format of remote work, which was fairly unusual for them.
Luckily, the whole of R&D Center for Gas&Oil Tech faced the troubles with dignity and courage, without hysteria or panic. All our employees fulfill their duties and I am immensely proud of their performance. I believe, due to the pandemic, we have all come together and become even stronger as a company.
As a result of our efforts, the company was nominated for an award “The Company of 2020” in the category – Provision of Other Services in the Sphere of Oil And Natural Gas Production – (OKVED “09.10.9”) according to the National ratings of companies in the Russian Federation. Another well-deserved honour was the title – The Best Service Contractor – in the Supervision category, which was awarded by the Rating Agency Center of Suppliers of FES (Fuel and Energy Sector)
What do you see as the future for drilling supervision in Russia?
For our supervision company, the drilling supervisor is the key “tool”, and at the same time the primary source of headache! As practice shows, the bulk of mistakes and breakdowns in the drilling process are directly related to human factors, as before. Contemporary supervision implements information technologies and digitalization, to minimize the probability of mistakes while making decisions.
For instance, the digital products Master of Formal Notes and Orders and the Supervisor’s Calculator, developed in R&D Center for Gas&Oil Tech, not only take over a great part of routine work for the manual completion of orders and performing process calculations, but also contain electronic libraries and algorithms for detecting errors, misprints and errors within documents. The software product ROBS grasps well drilling operations data from digital sensors in the mud logging stations. These provide an invaluable support not only for a supervisor but also for the engineers and foremen. The concept of geosupervision, developed and tested by R&D Center for Gas&Oil Tech, which is based on the creation of a headquarters cabin with the drilling crew and its integration with the digital mud logging stations makes it possible to increase the operational efficiency and decision recommendations taken while drilling. Successful operations have been proven by the mobile digital stations during emergency workovers.
Of course, it all depends on the pace of digital technology adoption, but I believe we will see a time of virtual supervision, along with virtual drilling and geotechnical well testing when the drilling process would be monitored remotely by means of sensors and video surveillance cameras, while the artificial intelligence would assist in making the correct operational decisions.
What plans do you have for R&D Center for Gas&Oil Tech for the next 5 years?
According to our long-term strategy, the goal for the next 5 years is to diversify the company through mastering the development and introduction of digital software products into the oil and gas industry. The transformation of R&D Center for Gas&Oil Tech into a digital company would increase the compatibility and transparency of our business. The meaning of digitalization is modified to the final product. Instead of daily reports, official notes and orders, the main role of supervision will be to provide advanced analytics based on real time digital data, digital statistics of the drilling equipment and digital twin. That is, the core value of the drilling supervision would start to be not documentational but digital twins of the drilling equipment, tools and operating procedures that would provide an effective trouble-free drilling. After that, the digital twins would become cluttered with multiple services being transformed into digital products using which would be used in the construction, servicing and recovery of a well, equipment or technology.
We have started to implement out plans for development of a digital company two years ago, after digitizing our own business processes using the 1C platform, beginning from buying a flight ticket for a supervisor and ending with issuing the closing documents to the client. Now, all the company’s activity is accessible online using specialized dash panels for each of business activity: finances, HR, transport, etc. Just this simplified “digital step” made it possible to optimize our expenses, increasing the performance index of the HR, financial and legal departments.
A strategic step on the way to digitalization, we signed a “Memorandum of Cooperation” between the Gubkin University and the Satbayev University aimed at the pursuing research in digital sphere and training qualified personnel for digital oil and gas occupations. The ceremony took place during the combined RDCR&KDR Virtual Well Engineering Forum in December 2020.
Only a short time ago R&D Center for Gas&Oil Tech signed a supporting grant, with the company RobTechBur, a Skolkovo resident, which is a student’s startup company with a focus on the digitalization of the drilling and downhole services.
And the last personal question for you. How in a couple of words could you characterize your personal engine/motivation in life?
In a couple of words it’s unlikely (laughing). I’d probably put it in three words – “Power in Motion”. In today’s crazy world, in terms of the rate of changes taking place in the digital world, it is important to continuously move ahead, learn and change. Flexibility, the pursuance of digitalization and the ability to quickly adapt yourself to changes – those are the key skills that are vitally important for achieving success not just in business but in your personal development too. I sincerely wish everyone to be not ready to rest, not be afraid of trying something new and to always move ahead!
Alexey, once more, on behalf of the ROGTEC magazine, please, accept our sincere wishes upon the 20th anniversary of R&D Center for Gas&Oil Tech. We wish you and your company all the best in your future development and growth.
Thank you very much!
Alexey Schebetov,
General Director, Ph.D., MBA,
R&D Center for Gas&Oil Tech
