August 31, 2011
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Home / Issue Archive / 2011 / June #6 / Soviet Petroleum Ministry Prefered Lufkin Beam Pumping Units

№ 6 (June 2011)

Soviet Petroleum Ministry Prefered Lufkin Beam Pumping Units

Ulfat K. Mukhametzyanov is an expert in artificial-lift services, an oilman with decades of experience in the oilfields of Tatarstan and Western Siberia. In Soviet times, he headed the Tatarstan Oil Engineering Research & Design Institute and was a Departmental Director at the Soviet Oil and Gas Ministry.

By Elena Zhuk

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Here, Mukhametzyanov tells Oil&Gas Eurasia how the U.S. oilfield equipment manufacturer, Lufkin Industries, was picked to supply beam pumping units to the USSR 20 years ago. He also explains the advantages of Lufkin pumping units and controllers that have allowed the Texas-based company to continue to expand its footprint in the CIS to this day.

Oil&Gas Eurasia: Ulfat Kasimovich, please elaborate a bit on when Lufkin Industries entered the CIS market?

Ulfat Mukhametzyanov: This year marks 20th anniversary since the installation of the first Lufkin products on the territory of the former Soviet Union. In Soviet times, a large amount of upstream equipment (including beam units, rods, deep-well pumps) was manufactured at factories in Baku. In the early 1990s, many Armenians – experts in computerized machine units – left these factories as a result of ethnic conflicts in the Azerbaijan capital, Baku. This effectively brought those plants to a standstill.

There was now no supplier of equipment that had been earlier purchased in Azerbaijan and, to a lesser extent, in Romania. This brought up a question of finding a company that could supply the necessary machinery.

At the time, an intermediary company “Bat Trading” and its manager Bob Taylor operated in Russia, representing several American companies, including Lufkin. Taylor visited the USSR Oil&Gas Ministry and agreed on a visit by a Russian delegation to North America to select the companies that could supply us equipment. This was how Lufkin and a Canadian company were selected. Initially, the USSR ordered a test batch of 100 Lufkin machine-tools. These got a "thumbs-up" from Russian oilmen and that lead to another trip to the Western Hemisphere to choose appropriate model sizes.

This was the beginning of collaboration between Lufkin and oil companies in the former Soviet Union. At first, the oil companies did not even know where the machinery was coming from as it was purchased by the Ministry. At the time, I worked in the Ministry as Head of Production at the Chief Technical Office and my task was to ensure, together with other colleagues, supply of equipment to oil producers so that they can achieve the planned production levels.

The first Lufkin oil production equipment started arriving in 1991, some 30 units per month; also the company separately supplied reducers for Russian beam units. Oleg Dmitriev (VNIIneft) and I were appointed by the Ministry as receiving inspectors for all equipment supplied for the Soviet oil industry.

At the same time, a number of Russian plants started to master beam unit production: Sibmash (Tyumen), Uraltransmash (Yekaterinburg), Izhneftemash (Izhevsk), and Motovilikhinskie Zavody (Perm). Sibmash launched production of beam units but failed to produce reducers for the units, so Lufkin supplied the reducers and other component parts for these machines.

OGE: Where were the first beam units installed?

Mukhametzyanov: The first beam units were sent to Tatarstan, Bashkortostan, to Surgut, Noyabrsk and the Urai region. I’d like to mention that Lufkin can manufacture beam units with up to 6-meters length of stroke and up to 2- tons capacity, but initially the company was supplying equipment with 3-meters stroke and 8-tons capacity, because Russian companies are used to this type of machinery – there was no other model at the Bakinskiy Rabochiy factory (Baku).

When the Soviet Union collapsed, Lufkin had an open-ended contract. The company had prepared to shipment 30 pumping units and 40 reducers, but the payment wasn’t transferred and the equipment stood gathering dust at Lufkin's warehouses. Then came stagnation; in 1994 and the first half of 1995 there were no sales. By this time the Russian plants, including factories which had converted from defense industry works, started manufacturing beam units, becoming competitors of Lufkin (although the quality of domestic units was, and still are inferior). On the other hand, Russian units were much cheaper than Lufkin equipment, and they started to sell.
But Lufkin had other advantages.  

OGE: Such as?

Mukhametzyanov: Firstly, the key advantages – high reliability, quality, energy efficiency and a competitive edge in oil production rates.  Secondly, the potential to manufacture and supply a range of beam units – six models with a capacity ranging from 2.4 to 20 tons, and stroke length – from 0.8 to 6 meters. Third, in conditions where the main hub of the beam unit is a reducer, the takeoff shaft (the one with the highest load) has a powerful friction bearing system, while the shafts’ ends house a hydroseal which prevents oil leakage from the casing.

With regard to CIS supplies, I want to highlight MARK-II beam units which use altered geometry to ensure slower movement at the moment of maximum torque. Stem peak load is reduced, allowing in certain conditions the use of a smaller-capacity engine and a reducer with lower maximum torque.

Lufkin acquired automation units, Delta X and Nabla, which provide SROD software for equipment selection. In parallel, Lufkin started offering MARK-II units for complicated production environments where oil production using ordinary Russian units was difficult. For such wells, Lufkin started to supply the entire set: beam units, rods, pumps, tubing anchors and wellhead equipment. Complicated environments are the deep wells, gas-rich wells, wells with deviated hole, with paraffin, mechanical impurities, etc. With the traditional Russian setup, a pump could be lowered via existing rods and beam units for about 1,000-1,400 meters. With high-strength “Norris” rods and MARK-II beam units – for 3,000 meters and more. The range of application for 80-100 tons/day sucker-rod pumps has also been expanded.

If earlier, the company was delivering only beam units, now it began using proprietary software to select rods, pumps and controllers for wells in West Siberia and Kazakhstan, according to the geological and engineering parameters of wells and the physicochemical properties of liquids and gases.

The Lufkin Well Manager controllers (formerly theSam Well Manager) made by Lufkin are the brain of the entire pumping system. They inform the operator about future failures in time, and they regulate the engine speed in case of a mismatch in the productivity of pumps and wells. That is, you can control the operation of equipment from the office of the oil company.

This is how Lufkin found its niche in the Russian market by addressing the issues of difficult wells. The first such equipment sets and mobile beam units were acquired by Varieganneft in West Siberia.

Also, there is such a thing as “saturation pressure”. If the pressure in the well is below the saturation pressure, oil in the reservoir starts to release the dissolved gas, and when this free gas enters the pump, the latter gets into the pump starvation mode. For these wells, we proposed that the pump should be lowered below the perforated interval. In this case the released gas practically bypasses the pump, ascending via the annular space.

OGE: This has all been done specifically for local conditions?

Mukhametzyanov: Yes. Moreover, the units were manufactured not only to local specifications, but individually for every well. Local conditions also were taken into account. For West Siberia, on-ground equipment was manufactured to Arctic parameters. For the Zhanazhol field, downhole equipment was manufactured to be corrosion-resistant as the field has up to 6-percent hydrogen sulfide content.

OGE: How long is the life of equipment?

Mukhametzyanov: Beam units serve for about 30-40 years. Twenty years have passed since the delivery of the first machinery and they are so reliable that, to the best of my knowledge, only two or three companies have ordered spare parts (belts and bellcrank bearings).

Lufkin supplies also benefited from the fact that the company manufactures products that are not produced in Russia, like gas-engine beam units. For example, Lukoil (Arcticneft) is developing a deposit at Kolguev Island in the North, where there is no electricity. Our unit makes it possible to draw gas from the oil production well and using it, to operate the gas engine.

There is also a small generator for lighting and for control-panel instruments. There are no manufacturers of gas-engine beam units in Russia. Also, Lufkin manufactures a mobile version of the unit, which is placed on a trailer and can be moved on the production field. It takes 20 minutes to set up the unit and then it is ready for operation.

OGE: How did automation develop on the Russian market?

Mukhametzyanov: In 1990, there was the Nabla laboratory in Midlands, West Texas. Before Lufkin bought the facility in 1997, another company, Delta X, was already was supplying Tatneft the equipment for upstream automation. But then in 1998, Lufkin also acquired Delta X. Lufkin Automation signed its first CIS contract for the supply of controllers (50 pieces) that same year, with Belorusneft.

After the success in Belarus and modernization of existing controller models, Lufkin Automation began working with two companies in Tatarstan, initially with TATEX (a JV of US-based Devon and Tatarstan state-owned oil producer Tatneft), then directly with Tatneft.

In 2008 the company started to supply equipment sets to TNK-BP, too.

OGE: What share of total Lufkin sales does automation account for, and where is it produced?

Mukhametzyanov: The share is small, I do not know exactly how big it is. The price of the controller is negligible compared to Lufkin beam units or transmissions for all industry segments. Ive heard that over the past five-six years the company produced 100,000 controllers.Automation systems are manufactured in Houston; beam units in Lufkin, Texas, a two-hour drive from Houston.

OGE: Why has automation become the market leader and the market was so open to this, at the same time being much less favorable for beam units?

Mukhametzyanov: First and foremost: when the company unrolled controllers to the market, Russia did not produce such equipment at all. Second, the Lufkin controller costs about $5,000. If the controller is manufactured in Russia, the price will be about the same. But the Lufkin beam unit is 1.5-2 times more expensive than a Russian one; plus shipping from the U.S. Though in 2012 Lufkin expects to start manufacturing beam units in Romania which is bound to lower the transport costs. Third, the Lufkin controller has many features, including some that simply have not been mastered in Russia before.

OGE: How can one measure the efficiency of Lufkin equipment?

Mukhametzyanov: By comparing the new parameters obtained after the introduction of new equipment with the old parameters. Above all, this applies to production rates and energy efficiency. Still, the growing cost of electricity attracts little attention so far. Yet Lufkin selects a mode with minimal power consumption. Selective floatation collar, SFC, is also an important indicator. When the unit fails, downhole equipment must be lifted and changed, which is very expensive. Earlier, one problematic well required two, three or more repairs annually, But with Lufkin equipment, the number of repairs falls to once every two years on average (if the operation manual is followed).

Of course, this reduces operating costs. Implementing Lufkin automation systems entails significant economic benefits. By the way, together with Leonid Zakharov, CEO of Varieganneft, I once visited an oil field in West Texas. The oil field has 160 wells, including 63 injection wells, a metering station and a pressure maintenance station. All the wells are automated, with only eight operators controlling production. Communication with well automation is installed both on the cars and in homes of the operators. I think that very soon all Russian oil producers will be similarly automated. This will help to reduce dramatically the cost of producing crude oil.

OGE: What is the extent of geographical spread of Lufkin pumping units throughout CIS?

Mukhametzyanov: The northernmost beam unit, a gas-powered machine, installed at Kolguev Island to the east of Murmansk. The most eastern – in the Yamal-Nenets and Khanty-Mansy Autonomous District, most southern – in Kazakhstan, on Mangyshlak peninsula in the Caspian, most western – in Belarus.

OGE: How are operators trained?

Mukhametzyanov: There are Houston-based courses for assembly training. Usually, a Houston expert comes to Russia for the installation of the beam unit and educates the local staff at the same time. There is also a Russian operating manual.

OGE: What are the company's plans for this year?

Mukhametzyanov: I know that Lufkin bids in tenders for supplying mobile E&P beam units and hydraulic pumping units. The company will continue supplying its controllers to Russia and Belarus. There are also plans for market research for unfamiliar to Lufkin products, such as piston gas-lift units, hydraulic pumping units, hydraulically activated pumps.

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