New Rigs Key To Russia's Upgrade аnd Drilling Plans

By Bojan Soc, March 12, 2014

producer during Soviet era, it almost fell apart in the turbulent 1990s, but things are looking brighter today as new orders pour in. Since 2010 its list of clients has been expanding steadily and today it includes a host of major players such as Gazprom Burenie, Rosneft’s drilling arm RN Burenie, Investgeoservis, OBK, SBK, Udmurtneft Burenie, Eurasia Drilling, ERIELL Group, SSK, Belorusneft, Turkmenneft, Turkmengaz and Contest Oil. “We have already shipped around 90 highly efficient modern drilling rigs and tools to these and other clients,” Uralmash NGO Holding first deputy general director Vitaly Steshin told Moscow’s Promyshlenny Ezhenedelnik weekly newspaper in January.

According to Steshin, the manufacturer is currently finalizing production of one rig for Integra Burenie, four rigs for Gazprom Burenie, five rigs for VTB Lizing and four more for RN Burenie.

Trying to cope with the surging demand for new rigs, Uralmash introduced the so-called “advanced launch program,” manufacturing the most demanded types of rigs ahead of the actual placement of orders by clients. According to Steshin, Uralmash had launched production of 22 such rigs, including the most popular models such as BU 5000/320 EK-BMCH, BU 6000/400 EK-BMCH and MBU 2500/160 D (K) 160-ton capacity mobile rig for cluster drilling. Most of these should hit the market in the last quarter of 2014, he added. 

“Experience shows that drilling companies often need the rigs ‘urgently.’ Besides, by building the rigs beforehand we don’t just help drilling contractors accelerate the start of their work, but we also help them save money through shorter financing,” added Steshin. 

According to him, Uralmash NGO Holding plans to further boost its output and start manufacturing 50 rigs per year by 2015.

Chinese Dragon Expands Reach 

In recent years, the global rig market was inundated by relatively cheap Chinese units, and the Chinese manufacturers’ drive to conquer new territory focused on Russia, too. With Russia’s own rig manufacturing capability limited to less than 100 units nationwide, Chinese suppliers definitely have a chance to grab a slice of the market. One of the prominent players has been Honghua International, a rapidly growing oilfield equipment manufacturer.

“Honghua is partly owned by [Houston-based] Nabors Industries, so there was a lot of technology transfer from the U.S. They make very decent equipment and up until now they have built approximately 1,000 rigs,” OGE’s source says. “So if you talk about experience, I think they have quite a lot these days. They have been successful in the Russian market. I don’t know how much the import duty really affects them. If somebody decided to invest a lot of money and buy a Chinese rig, it would be important that they actually go to a plant in China and control quality. Only so can they be sure to get what they paid for. At the same time, I think Honghua makes decent equipment at very competitive prices. But you can’t buy off the shelf and neglect quality control.” 

But there is still a gaping deficit for new equipment that can’t