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Rishat Vakhitov: the concept of developing minor oil producers should involve Vertically Integrated Oil Companies

June 04, 2018/ 07:08

Ufa. The concept of developing independent oil producers in RF has recently been put out for public consultation. The project was prepared by the AccoNeft experts on the recommendation of RF Energy Minister Alexander Novak and with the support from Gennady Shmal, the President of Russian Oil Producers Union.    

Rinat Vakhitov, the expert of Oil and Gas Information Agency and the council for SOUZNEFTEGAZINVEST Consortium shares his opinion on the projects and suggests some improvements. 

- The year 2018 may become a turning point in the development of Russian petroleum geology, independent oil producers and putting on-stream abandoned wells.  

The trigger for the changes is the May order of the recently elected President and the big changes in the government. The petroleum industry lays hopes on the new Natural Reserves Minister, a man with proper qualification, a good experience of working in the Polar region and impressive achievements in the development of both a well-established NadymPurTazovsky region and a pioneer Sabetta, LNG facility. 

I hope that Dmitry Kobylkin will be as motivated and active in the new environment, which is perhaps tougher than that in the Arctic and I also hope that Pavel Sorokin, the talented deputy minister, who has contributed a lot to the OPEC agreement will adjust quickly. The new government is actively looking for reserves and the source of money to complete the President’s order. All that is under our feet. The Association of Independent Oil and Gas Producers AccoNeft, representing 53 upstream and downstream companies, speak a lot about this.  

The AccoNeft representatives asked me to comment and give my opinion on the concept of developing independent (including minor ones) oil producers. This is an important incentive, especially in the current circumstances. Alexander Novak, Pavel Sorokin reviewed the project, Gennady Shmal supported it and now it is being discussed in the social media. As far as I know AccoNeft worked on the project together with Petroleum Geology and Geophysics Institute SB RAS. I certainly have a few comments but who am I to criticize the RAS  academic Alexey Kontorovich and the collective efforts the team, especially in social media? I won’t focus on the abundance of English words, the fact that it sounds too scientific and clearly written for a single customer. 

In general I think the incentive should be supported. I’d like to put forward a few suggestions:  

There are two ways to develop the petroleum industry: Almetyev (Oil Consortium with 7 mln tons of produced oil last year) and Moscow (AccoNeft, no data found for 2017). The Oil Consortium has clearly been dependent on Tatneft  ever since its birth, so it has been growing steadily, gaining weight and making the mother happy. The AccoNeft is not clearly independent on VIOCs, so it is developing slower and gets ill sometimes.  

If we persuade the VIOCs to support minor independent producers in their territory, we’ll have an immediate effect. What needs to be done? Include the suggestion into the agenda of the President’s commission on FEC. Keep in mind that that the secretary is Rosneft’s head Igor Sechin, and the chairman is known to everybody. The process is bound to succeed.

It is necessary to arrange a consortium or any other kind of professional union with branches in VIOCs’ territories. For example, the first president of Bashkortostan and the Bashneft owners got rid of all the seeds of minor producers, which tried to strike roots there, sparing only processor. Today nothing is stopping Bashkiria’s government from upscalling the Almetyev and Moscow experience, though they don’t seem to have time for that, they are  busy making petroleum chemistry cluster bankrupt. This happens in many other petroleum provinces. The Oil Consortium is trying to get into Bashkiria from the West (like China from the East). Good job! Though now they are bound by the sanctions. However, just involving the previously drilled but abandoned wells in Bashkiria may add from 5 to 7% to production.     

Also, the term independent should be considered outdated and replaced by the term dependent oil production. We won’t have to look for candidates, there are plenty of them.  

I suggest not copying the English experience as bad for us and copying the Tatar experience instead. 

I would recommend Pavel Sorokin to hold a meeting with such petroleum specialists as Victor Klyuzhny, a big invest operator, Viktor Ott, who is now supporting East Siberian projects, Vladimir Saltykov, the pioneer of  the Subarctic and the Black Sea offshore, Renat Muslimov, the inspirer of the Oil Consortium. All these people are a legend, they are the heart of the industry.

There is money. The people have the money. The people will support such names and trust these people with their money. As far as the VIOCs’ money reserves are concerned, the legendary people I mentioned will help to find them.   

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