Hats Off This Month to a Couple of Russian Success Stories - Wood Group and RITEK

One of the investment banker told me that the biggest thing I had going against me was that I was operating my business in Russia. "Who's going to send their money there?" he said rhetorically.

Well mister, I've got to say there are plenty of Western companies that are willing to put their money into Russia and this month we have the pleasure of publishing an interview with the founder and chairman of one whose name is very well known around the globe, the UK's Wood Group. This international services company has been selling electric submersible pumps into Russia for a decade but now it is taking a new step into manufacturing. As Sir Ian Wood explains, to do business in Russia you need to become Russian. And that's just what Wood Group is doing, learning the culture and adapting itself to the business environment. Come to think of it, isn't that sound international practice wherever in the world you work?

But Wood Group is not the only success story that we'd like to single out this month. There is also RITEK which is celebrating its 15th year on the Russian market. Though today RITEK is part of LUKOIL, it came from very humble beginnings. In the early days of the post Soviet oil industry, RITEK went into the workover business, opening shut in wells and accepting payment as a percentage of the marginal production that those workovers brought on stream. Today RITEK produces oil and sells technology and services both at home and abroad, particularly for mature fields.

And dare I forget FIDmash? This month Oil&Gas Eurasia also talks with Leonid Gruzdilovich, founder of FIDmash in Minsk, the Russian market's leading coiled tubing rig manufacturer. Though FIDmash is technically in a foreign country, as a practical matter its coiled tubing rigs have for years been thought of Russian. In his interview with OGE, Gruzdilovich talks about how FIDmash was bought out by VARCO in the US. Much like Wood Group in the ESP line, VARCO is attempting to add value to the Russian market. With its involvement in FIDmash, quality is improving while at the same time costs can be contained because of the manufacturer's proximity to the oilfields.

So back to my investment banker friend in Chicago. I asked him, "So what's the problem with Russia?" And he finally answered, "I really don't know. My comment was related to the fact that I don't know anything about the market." So I sold him a subscription to Oil&Gas Eurasia and suggested he study the experiences of our three headline companies this issue. Happy reading!

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