most of it.” In fact, it is high time to move on to piece work with wells, the way it is done in Tatarstan, for example. They have been exploiting the deposits for so many years and, still, not a single field is closed yet. There is a very large database in Tatneft, they know how to work with it. This brings results. Once all the oil companies learn that, then the service would be more in demand.
The attitude of oil companies to project documents is very formal. The main purpose of a field development project is just to keep the license. Then it is on the shelf and forgotten. No hurry. It is clear that there is a poor control by the owner of the subsoil, which is the state. Regulatory authorities are constantly restructured; they do not have any real leverage, being prone to turnover and sometimes to bribery. It is appropriate here to give an example of how the work is organized in Canada. In Canada, the entire Energy Agency, including supervisors, has a staff of 760 people. The agency was created 70 years ago and it has never been transformed since then; the name has not changed either. The Agency has an extensive database on all deposits, which helps maintain control.
OGE: What can the non-fulfillment of project documents lead to?
N.A.: I know one field with 3,000 wells. First, they suspended 1,500 wells, then it turned out that out of that amount 750 were producing. If you are using all the net of the wells specified in the project, some oil reserves are selected, but then a substantial part may be buried forever. Sometimes a well with 98 percent watercut and only 2 percent of oil should be left to work because it contributes to hydrodynamic flows that enhance oil recovery in general. Non-compliance with the development project is one of the reasons why we have low oil recovery ratio. This is where the state, the owner of the subsoil, must intervene. It should monitor the methods and technology being used by subsoil users and whether there is a neglect of the country’s interests. Up to 40 percent of wells are now idle in Russia, it is way too much.
OGE: There is a global financial and economic crisis raging. Is there a danger that small and medium-sized Russian service companies will be acquired by more powerful Western competitors?
N.A: This very well may be. Some always go bust in a crisis, while others might profit. International Western service companies, unlike the Russian ones, put a far greater portion of the profits in the company development, they have bigger financial capabilities. So, it is possible that Western companies will buy some of the Russian service companies facing difficulties, especially if those smaller companies have interesting technological solutions of their own.
OGE: Please, tell us about your concept of a rating agency for service companies.
N.A.: Our oil service is making a real breakthrough. Service