The 5^th Consumer's Conference on Exploitation of CT and fracturing equipment, organized by the leading producer of such equipment in Eurasia NOV Fidmash, took place in early March 2009. In spite of hard economic situation in the world, the entry list of the conference represented all spheres of oil and gas service. About 3 dozens of companies located in various regions sent their representatives to Minsk to exchange experience in equipment use and service as well as new developments.

The main subject of current conference was modernization of Fidmash's CT units, produced in 2000-2005. The guests saw new equipment, developed by Fidmash specialists: heavy CT unit on semitrailer MK30Т-50 and CT unit MK30Т-40 for universal application (modular unit on chassis), injector of new generation FМ127, CT units for operations in annulus, nitrogen pump unit А100, pump unit Н2501, multifunctional (cementing) pump unit Н1000С, data acquisition and control system of new generation СКР43М and related production enhancement and stimulation equipment.

Development laboratory "Novinka", which design the innovation equipment, demonstrated a complex for CT radial drilling, new directional drilling systems (with electrical line and hydraulic control).

The conference featured a round table, during which the hosts and the guests had a chance to discuss a wide range of problems. The participants tried to answer the question: how Russian oil and gas service is influenced by the financial crisis and what technologies will revive it? We publish fragments of this discussion.

 

L.M. Hruzdzilovich, Council Chief of FID Group: The economic situation in the world is uneasy. I suggest beginning our round table with the discussion of macro problems. Let's consider how the world financial crisis will influence the Russian oil and gas service in the near future. The most optimistic analysts believe the economy will start restoring by the end of the year bringing about more demand in oil, higher prices and boosting well intervention. With prices up and situation stable there will be a necessity in exploration and drilling: In case the service is in demand, the equipment will be bought and up-dated. But what kinds of service will be in demand in the first place? What equipment will be popular by the end of 2009, in case the economic situation gets stable? 

Unfortunately, hundreds billion of dollars spent by many economies including the USA and Russia on harnessing the crisis seem to bring no apparent results. The fall is just getting slower, but nobody knows, when the bottom will be reached. According to one of the predictions, the crisis will stop in 2010. What technologies will be in demand in that case? Even if the demand in oil falls by 10%, it cannot totally disappear. If the oil price slumps beneath USD 40 per barrel, it will still be necessary. But what technologies will survive? I think, the technologies that provide for the cheapest oil production. Equipment will still have to be up-dated and serviced. The number of service companies will shrink:

We drop the third option suggesting that the crisis may last 5 and more years, since only obscure projects can be planned for such a long term. Quite different values may gain primacy by that time. I suggest exchanging opinions on the first and the second scenarios of crisis development.

S.V. Tkachenko, Executive Director of Integra Services: Nobody can define exactly, what is going on in the world at the moment. In his interview after the 20^th Forum in Davos Anatoly Chubais admitted that he had actually understood that the situation was bad, but found it many times worse, after he had communicated with people in Davos. What is happening with oil service? Russian O&G operators forced all the contractors 10-15% back to the prices of 2008. These companies have to receive 800 bn rubles (more than 22 bn dollars) in addition, because the excise duties were reduced. When free money appears, naturally it will be invested. The question is where? Most likely, into well construction, sidetracking and well development. Currently it is hard to predict, what exactly will be happening. Earlier we used to make plans for a year and more. The longest term we can afford now is 4 months at best.

L.M. Hruzdzilovich: How has the production outputs of an average service company changed?

S.V. Tkachenko: When the contractors were forced back and the state reduced the excise duties, O&G companies received free financial resources. Consequently, the output started returning. Today big companies reach, though with much difficulty, the volumes they had before.

L.М. Hruzdzilovich: So Russian companies seem to be receiving some support and feel not that bad. That is why the volume of services is on the rise again. The principal service technologies are still the same: standard well workover, after fracturing development and sidetracking.

O.T. Serdukov, Engineer of Drilling Department at Bashneft: I'd rather point to the positive aspects of our cooperation with Fidmash. I attended practically all consumer conferences, organized by this company. Today I visited the plants and felt the enterprise is in progress. We have 5 units and the producer responds fast to all our wishes and recommendations. The negative side is high amount of metal in the units. We think the construction should be made easier. At least for the conditions, in which Bashneft is working. Most of our wells are of the 3^rd class. I'd also like to get more detailed information about light CT unit for operations in tubular annulus, developed by Fidmash's designers. 

L.M. Hruzdzilovich: Light class CT unit, presented yesterday, is meant mainly for radial drilling.

O.T. Serdukov: I'd also suggest creating an exchange fund for the equipment you produce. We have an overage unit. Is it possible to send it to you for modernization and receive another one from you for a certain period? Or another option: We take a new unit and pay the difference in cost and you repair the old one and sell it.

E.B. Lapotentova, Director General of Fidmash: Each of our contractors has specific requirements for the units. Belorusneft needs heavy МК30Т. Bashneft demands lighter machines. Schlumberger, Ukrainian, Kazakh, Uzbek companies: All of them have their requirements. Our customers work in too different climatic and geological conditions so that they could use the only modification of some equipment. That is why we are trying to cater to the individual demands of the contractor.

L.M. Hruzdzilovich: The idea of an exchange fund is very interesting. May be it would be more reasonable, if this idea were realized not by the enterprise, but rather by some company that would provide such kind of services on its conditions. The producer works by the following scheme: order - development - production - supply. Implementation of the idea of an exchange fund is another kind of business. 

An idea of reducing the amount of metal was proposed. We are working to this end, but we would like our customer to receive a commercial unit and not a test piece. We will do everything we can do with a guaranteed result.

Since we have here representatives of various companies, it would be nice to hear some practical ideas on servicing, development and modernization of the already existing equipment and the units that are being designed. 

S.I. Yagodovsky, Head of Well Development and Workover Department of Ukrgazdobycha: The crisis hit Ukraine even more than its neighbors. Yet, the budget of the company is formed and I am confident that we will buy the units we have planned to buy. Sure, we feel lack of resources, that is why the exploration drilling will be curbed. The main burden will lay on the producing well stock, therefore well workover will be in demand. This year as many as 6 representatives of our company came to Minsk. All the members of our delegation work with Fidmash equipment and I would like some of them to express his opinion.

A.V. Chipel, Superintendent of Well Workover Plant at Lvovgazdobycha: We've been using МК10Т unit for 4 years. We have no serious remarks about the way it works. When some minor details fell out, specialists of Fidmash quickly replace them. The only request is to improve the reel assembly for the tubing. The tubing with the diameter 38.1 mm is spooled well, and the ones with other diameters go poor. Hopefully, the new units we are going to buy from you will be of better quality.

S.M. Kuzub, Head of Technological Division at the Department of Recovery Enhancement and Well Workover of Belorusneft: We have a heavy unit МК30Т on semitrailer, bought in 2007. A special well workover team was organized to run the unit. It had a sole tubing with the diameter of 44.45 mm, which has been replaced recently by a tubing with the diameter of 38.1 mm on a new reel. We made 62 trips with the old tubing and it is still in good condition. Yet, we would like to work in wells 4,500 meters deep, and the new tubing of 4,700 meters will enable such operations. The unit approved itself, but because of its big size we have difficulties with moving to other location, especially in freshet period.

L.M. Hruzdzilovich: I'd like to make some explanations. Fidmash produces two types of units of "30" series: with 5 axes (chassis 10х10) and the ones on semitrailer. Certain confusion was caused by the pulling force of the injector. We use it to classify our units: 10 tons, 12 tons are called "the tens", units with 24 tons are the "the twenties", the ones of about 30 tons are "the thirties". But as a result of modernization an injector of 24 tons demonstrated a pulling force of 27.5 tons. Thus, МК20Т, a mid class unit with 5 axes turned into a "thirty" in terms of its capabilities. The second modification with the injector force of 36 tons, assembled at semitrailer, belongs to the heavy class. As far as its capabilities are concerned it is close to a "forty", though it is called a "thirty".

A.N. Khamidullin, Director of Coiled Tubing Service company: Our company felt the impact of the crisis as well.  The volumes reduced by 20% both in terms of quantity and revenues and we had to reduce the cost of service. At the moment the situation is getting back to normalcy and the demand in our services is growing. By summer, or at least by the end of the year, we will reach the level of 2008 in the amount of services. As soon as the price on oil exceeds 70 dollars per barrel, the cost of services will start rising. At the moment CT services are in high demand at the Russian market. And I think they will be for long. We plan to expand our activity and consider acquiring 2 units: light МК10Т and mid МК20Т.

 

Z.Yu. Mokhamadiyev: Head of Production Service Department of Naryanmarneftegaz, Lukoil's subsidiary. Our O&G Production Department has recently acquired a CT unit МК20Т and commissioned it. It also signed a contract with Fidmash on purchasing a pump unit. Our service teams make part of the department. As soon as the equipment arrives, we will begin operations in the well. We are going to start with flushing the bottoms of the injection wells and dewaxing. In the future we have plans of horizontal drilling. In spite of the crisis we make the planned acquisition of equipment.

V.P. Arhireev, Chief Engineer of Ural Design PNP: We perform operations in 3 regions: Perm, Udmurtia and Orenburg. We have two units: M10, produced by FID Group in early 2000, and MK20T of 2007. There was a very nice proposition on creating the exchange fund. Though М10 was up-dated, we need it to be totally modernized. The burden on the unit is very high. It performs at least 80 services a year. 180 services were done with 2 units in 2008. Like other enterprises of the region, we got trapped into economic jaw and depend both on oil prices and cost of equipment. Besides, we abide by the contractor's unconditional claim on price cutting. In these conditions the secondary market of equipment can become a way out for small private enterprises that can't afford expensive equipment. For example, we planed to buy another МК20Т unit and a pump-compressor unit Н504, but at the moment we can't afford it. The share of well workover operations shrank by 30%. The demand in CT services is still alive and I agree with Khamidullin that it will be growing more. Our volume of CT service operations in Perm region reduced. In Udmurtia they are on the same level and in Orenburg region they have grown up. Geophysics, CT geophysical operations (both with autonomous devices and cable laid in CT) are in high demand. Radial drilling is in progress as well. The range of services, including repair-recovery operations and passage of emergency tubes, is expanding. I think that CT drilling equipment, demonstrated by development laboratory Novinka, will be demanded as well. Since CT technologies are expanding, it would be good to have Fidmash's service base in our region. We are also very interested in downhole equipment, related to CT technologies. It would be good to buy it right from the producer of the units.

 

L.M. Hruzdzilovich: We are about to create facilities in your region. We are going to do the overhaul of the units closer to our main customers. At the moment Russian companies started to produce a number of analogues of foreign assemblies and details, which were not manufactured here in 2000-2004 and now we can use it in our products. This is going to make the modernization of units cheaper, which is very important in the conditions of the crisis. Fidmash is going to continue to be very attentive to the requests of its customers. The wide range of its products is meant for various demands of service companies and any buying power. I suggest continuing our discussion in Coiled Tubing Times journal and at our site www.cttimes.org.