August 22, 2012
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Editor’s Letter

Live from OTC in Houston!
We Bring You the Global Oil and Gas Industry, 
Minus Russia
 
   I’m in Houston now, writing from the Offshore Technology Conference (OCT), one of the largest and most important international events on the oil and gas industry’s annual calendar. 
   I’m happy to report that, despite the recession, OTC drew the second largest crowd in its 40-year history – 66,820 visitors from 120 countries! This is encouraging given the fact that the highest attendance was in 2008 when oil prices peaked at $150 a barrel.
   What wasn’t so encouraging was the Russian presence – or shall I say, the lack of a presence. I know that Russian companies see the OTC as an American event. But comrades, please, it is international – and that means you too! 
I did hear two guys speaking Russian one day while crossing a street outside the Reliant Exhibition Center. And Gazprom did have a stand – but not in the main pavilion. That’s one Russian company among 2,500 exhibitors from 38 countries, come on guys! If I missed someone and you’re reading this, please e-mail me at [email protected] and I’ll feature your company in my next editorial (complete with an apology for having bypassed your stand at the OTC). 
   As for the OTC program, again Russia was nowhere to be found, other than an overview of Sakhalin I by project operator ExxonMobil. The OTC Industry Breakfasts which offer expert views on doing business in developing regions covered Brazil, offshore Asia, and the Caribbean this year. And in a news release, the OTC organizers talked about plans to create new events for Brazil and for the Arctic.  Would Russia show up for either of these?
   Last time I checked, Russia claimed title to two thirds of the world’s unexplored Arctic offshore reserves, and by yearend we expect a decision on moving forward with the financing on the world-class Shtokman project in the Russian sector of the Barents Sea. Gazprom, Total and StatoilHydro are partners and the service and supply companies that work with these global players are salivating over prospects of contracts.
   Why no Shtokman update at the OTC? I’m hoping people smarter than I know why because I’ve stopped trying to figure it all out. And I’m starting to believe my Russian friends might have a point when they try to blame everything unfathomable about Russia on the Mongol invasion in 1238 (give or take a year because we had no frontline reporting in the Dark Ages). 
   Anyway, for the record here are just a few highlights from companies with whom Oil&Gas Eurasia works in Russia. And they are, by the way, very interested in what happens to Shtokman.
   Ametek showed its Solartron line of wet gas and subsea flow measurement systems at the OTC and is planning to launch the same products into Russia during the MIOGE exhibition in Moscow, June 23-26 (visit www.oilandgaseurasia.com/advertising).
   Cummins launched its new QSK60 Offshore Drilling Power Module at a press event that surveyed the full line of Cummins products. Cummins works in Russia through a joint venture with the Russian company NG-Energo to develop and service drilling rig power systems for Siberia. (search “Cummins” at www.oilandgaseurasia.com).
   Emerson Process Management used the OTC as a platform to announce its acquisition of Norway’s Roxar. The deal creates the world’s first integrated automation solutions company offering products for subsea oil and gas reservoirs, platform and floating production, transmission and refining and processing. Emerson has a wide range of operations in Russia. The process automation and instrumentation manufacturer, Metran, located in Chelyabinsk region, is a wholly owned subsidiary of Emerson Process Management.
Expro, the international oilfield services company, launched its ActiveSONAR ™ next generation clamp-on sonar metering technology at OTC. At a news conference, Expro CEO Graem Coutts called 2009 “a hugely significant year for Expro.” Expro, by the way, did well testing on Shtokman and has active operations in Russia.
   Flowserve had on show at the OTC two items currently sold into Russia: its TSP twin screw rotary pump and its Azimuthing Thruster for offshore use including semi-submersible drill rigs, FPSOs, drill ships, crane and pipelay vessels. Flowserve’s oil and gas marketing manager, Marc Fontaine tells OGE that Flowserve sold the azimuthing thruster to Gazflot for its CS50 semi-submersible drill rigs that will drill at Shtokman. Flowserve plans to compete in the multiphase pump market in Russia as well.
   GE Oil&Gas which is actively growing it’s presence in the Russian market (along with GE Energy and Jenbacher engines) pulled out all the stops educating press to its ever growing line of products for the oil patch. Among other things, GE had on show the Hydril pressure control business it recently acquired from Tenaris. GE Oil&Gas was awarded also the coveted “Spotlight on New Technology Award” by the OTC for its next generation subsea electronics module, the VetcoGray SemStar5. The VetcoGray SemStar5 (previously codenamed SEM5) is a fifth generation Subsea Electronics Module for use in subsea production control systems. 
   And last but not least, here’s the latest from Oil&Gas Eurasia. 
First, our American colleagues can expect to be hearing now from our new North American sales representative, Jim Heath (that is, if you didn’t already meet him at the OTC). Jim is no stranger to oil and gas, as he previously represented Hart Publications after they were purchased by Phillips Publishing. Jim knows his way around an oil rig and he knows his way around the oil patch in the United States and Canada. And he’s a true believer in where the oil and gas industry is headed these days – reserves in places like Russia, Africa and Brazil – controlled largely by national oil companies; and demand coming from China. Welcome aboard Jim!
   Our Russian friends will be interested to know that Oil&Gas Eurasia now represents Cairo-based Petroleum Africa magazine (www.petroleumafrica.com) to Russian companies wanting to advertise to national oil companies throughout the African continent (North Africa and Sub-Saharan Africa). OGE can plan your media program and adapt your marketing materials to Petroleum Africa’s English-speaking audience. Contact our Moscow sales team leader, Anna Bovda, for details: [email protected].
   UPCOMING CONFERENCES – Remember MIOGE is just around the corner and Oil&Gas Eurasia is your best value MIOGE Media Partner. We distribute up to 8,000 bonus copies of OGE at the show, in addition to our usual 12,000 controlled qualified circulation throughout Russia. And we’re the only publication that proves this with a BPA audit. Contact [email protected]
And  while we’re just getting into summer, it is not too early to start talking about the RAO CIS 9th International Conference & Exhibition on the Russian Arctic Shelf held biennially in St. Petersburg. Oil&Gas Eurasia is proud to have been chosen General Information Sponsor for this important event. We will be one of only two publications in all delegate bags and we’ll be producing a daily conference newspaper as well for the event organizers. For information on marketing and advertising opportunities, contact [email protected].
So that’s about it. I have a plane to catch to Chicago, and then back to Moscow. I’ve flown American Airlines non-stop between Chicago and Moscow three times since November and the first two times, the flight was only half full. You could you could sleep across three empty seats! Not so anymore. The Chicago flight is now as full as Singapore Airline’s non-stop between Moscow and Houston. Perhaps better economic times are just around the corner! Heck, considering that United Airlines recently launched non-stop service between Washington Dulles and Moscow, those Russian companies that stayed home this year can take their pick of airlines for OTC 2010.

Main Article

SPE Moscow Section meeting: Senergy offer ADT technology for mature oil fields

The challenge of mature fields  is very acute topic in the oil and gas industry nowadays. This is why Society of Petroleum Engineers ( SPE) Moscow Section   monthly meeting, which took place recently in Moscow was dedicated to this problem. This month’s presentation was made by George Maitland , commercial manager  of wells for Senergy Ltd. Company.

Featured Article

Shtokman Project: Monitoring the Environment

   Guaranteeing environmental safety is one of the key constituents for a sustainable development of a region. This surely applies to large oil and gas projects 
in the Russian north, such as Shtokman gas condensate field in the Barents Sea and at the Kola Peninsula.

More Top Features

Love Thy Neighbor StatoiHydro’s Bengt Lie Hansen Seeks to Expand Cooperation with Russia

   StatoilHydro is the world’s largest offshore operator in waters more than 100 meters deep. 
The company produces 1.7 million barrels of oil equivalent per day, and has more than 6 billion (BOE) in proven reserves.

Thermal Impulse to Serve Oil Industry Will the Solution of the Russian Scientists Be Marketable in Russia?

   An average man often associates oil production from a drilled well with black gold blowing out of the depths. However, this is not a frequent situation. The image of modern oil fields is built by beam pumping units, which drive the pumps lifting the oil from the depths.  

DMNG Mega-Report
Details Opportunity on Russia’s Far East Shelf

   For over 40 years of exploration on Russia’s Far East, a substantial geo-geophysical data has been collected, providing informa-tion on general geologic structure of the region and enabling to evaluate the hydrocarbon potential of the region and first discoveries.

Outstaffing in Russia: What? Why? How?

   The technology that helps to reduce personnel administrative expenses and risks appeared fairly long ago and was called outstaffing.

Minenergo, Integration Honor Young Innovators

   Since 1993, Russia’s Ministry of Energy and the NGO Integration (All-Russia public organization “National System for Developing the Scientific, Creative and Innovative Potential of Russian Youth” – “INTEGRATION”,) have conducted annual country-wide contests to honor young specialists in companies and institutions of higher education in the fuel and energy complex.

Offshore Structures in the Arctic
Keppel Meets the Challenge with New Materials and Designs

Over the last few years, Keppel Offshore & Marine (Keppel O&M) has invested its resources to investigate the unique challenges to offshore structures in Arctic regions because of the extreme cold temperatures and ice loads.

When It Comes
to Processing Really Large 3D Offshore Surveys, LARGEO Does it Best

Like a “good news, bad news” joke, the good news in 2009 for geo-science companies is that the data processing and interpretation side of the business has remained strong, even as projects to acquire new data (the “bad news”) are being cancelled or delayed.

Novaya Zemlya Pipeline 
Offers Economical Alternative


   Falling oil prices force Russian oil professionals to initiate far-reaching cost reduction policies. Sizeable savings could be provided by cutting transport costs. 

Shtokman Launch 
Proceeding as Planned

   Launch forecasts remain on target, including projected costs. Shtokman Development AG (51 percent shares – Gazprom, Total – 25 percent, StatoilHydro – 24 percent), project operator, expects no change and the LNG plant is on target to be put on stream as planned in 2014.

VBM-Group:
Our Clients Vote 
by Their Orders

   The VBM-Group engineering company consists of four drillbit plants: Volgaburmash (Samara), Uralburmash (Verkhnie Sergi, Sverdlov region), Drogobchesky drillbit plant (Drogobych, Ukraine) and Sarapul drillbit plant (Sarapul, Udmurtia).

Vyborg Dockers Build Rigs
for Use by Shtokman Development

   First records about Vyborg shipbuilding knack tail back to the second half of 1400’s. Now the city is a regional center for the Leningrad Region, located on the shore of the Gulf of Finland. And after six centuries it still retains the shipbuilding tradition.

Weatherford Develops a New Frac Services Model

   Weatherford entered the Russian hydrofracturing market in early 2008, having imported a new hydrofracturing fleet into the country. 

Gazprom – PetroVietnam
New Partnerships on the Horizon

   “Stability is a sign of skill,” they say. It’s easy to mull about stability in “peaceful” times, or to compare profit ratios to currently trendy EBITDA figures. It’s easy to forecast, and it is even highy probable that the forecasts would come to fruition.

Gazprom CEO Alexei Miller Predicts $85 a Barrel Oil by December

There are "sufficient objective grounds" to believe the price of oil will hit $85 a barrel by the end of 2009 and, if capital investment isn’t restored, it may hit $150, said Alexei Miller, chief executive of Russia’s state-controlled natural gas monopoly OAO Gazprom (GAZP.RS), is reported to have told a conference in Porto Cervo, Italy this week.

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