Gazprom Group’s PeterGaz Takes the Mystery Out of Joint Venturing in Russian Waters

April 22, 2012
   Moreover, to develop such offshore fields, Russian oil and gas companies need new production processes and technology allowing them
to operate under complex ice conditions, in stormy weather and at great depths.
The implementation of such large-scale development projects requires consolidation of vast material resources and financial assets, which explains why joint ventures tend to be the more prevalent form of cooperation in the development of offshore projects. Despite the fact that operations in Russia potentially are highly attractive to Western investors, there exist significant barriers that make entry into the Russian market difficult. PeterGaz LLC General Director Oleg Sergeev shares his views here on what makes that entry difficult and on how such difficulties can be overcome.

Oil & Gas Eurasia: Oleg Nikolaevich, tell us please about the main lines of your company’s activity.
Oleg Sergeev: Today, PeterGaz is the only true engineering company (in the full sense of the word “engineering”) within the Gazprom Group. What explains it is the fact that, within Gazprom, the various companies mostly operate within their respective separate areas of principal activity such as production, transportation, processing, etc. Our own company, however, has a high degree of flexibility, something that allows it to unite, in its activities, a powerful design office and a customer for investment projects. Operating as it does on the engineering services market, PeterGaz gets itself involved, among other things, in the entire range of issues associated with front-end engineering design. Naturally, our principal area of specialization is the oil-and-gas sector, in general, and in offshore projects, in particular.

OGE: It looks like a pretty wide range of areas to address. But how does that work in practice?
Sergeev: Altogether, I would say we concentrate on the following three main areas of activity.
Let’s start with the first one where we operate as surveyors and design engineers. In all such projects that we implement in Russia, Gazprom acts as the investor and PeterGaz operates as its contractor. That type of arrangement is a familiar pattern. So, I won’t dwell on that at any length.
In our second area of specialization, we concentrate on the management of investment projects, among which is the construction of sports facilities for the Olympic Games. At the moment, we are in the process of developing a design for the expansion of the Unified Gas Supply System to ensure the supply of natural gas to the South Stream gas pipeline. Under the name of South Corridor, the project will be implemented in two phases by December 2019. PeterGaz will be responsible for the management of civil engineering projects and will act as project contractor. All of that will involve a great deal of work. To give you just two figures to gage the scope of the project, let me tell you that it will involve the construction of 2,500 kilometers of gas pipelines and 10 gas compressor stations.
And, finally, here is the third line of our activity, which has a particular relevance to the topic of our conversation.
In our projects in Russia and in