The Rise of the Service Industry: Capitalizing on Russia’s Potential

OGE correspondent has met with Igor Melnikov, president of the Association of Russian Oil and Gas Field Services Providers, to talk about the challenges the Russian service companies are facing and the importance of supporting the service industry in Russia and the role his organization is playing in fulfilling this duty.

Oil&Gas Eurasia: What are the main objectives and accomplishments of your organization?

Melnikov: The Association of Russian Oil and Gas Field Services Providers (Soyuzneftegazservice) was set up for the purpose of integrating separate domestic oilfield service companies with various areas of expertise. The first step towards consolidation of the Russian services market was the foundation of the public organization Souyuzneftegazservice, which researched the demands of the Russian oil and gas services market.

As a result, the decision was made on the setup of the Scientific-Production Association Soyuzneftegazservice at the end of 2006, which originally incorporated the largest players in the Russian market of geological, technological and geophysical research of oil and gas wells. Our goal is to offer a full spectrum of oil and gas services, namely competitive local oil and gas services. Soyuzneftegazservice is one of the very few, not to say the first, organization with a successful record of developing the national standards. In December 2006, the Technical Committee 431 of the Federal Technical Regulation Agency “Geological Exploration, Exploitation and Conservation of Mineral Resources” adopted the draft national standard titled “Oil and Gas Wells. Geological and Technology Research Regulations” developed by the experts of Soyuzneftegazservice. TK431 regulation was devised with direct participation of Soyuzneftegazservice. Announcement has already been made about the launch of the project to adopt the important for us international ISO standards: ISO 10414-1:2001 Petroleum and natural gas industries. Field testing of drilling fluids. Part 1. Water-based fluids и ISO 10414-2:2002 Petroleum and natural gas industries. Field testing of drilling fluids. Part 2. Oil-based fluids.  

Throughout its existence, Soyuzneftegazservice has become the influential and respected public organization, whose opinion has been listened to and taken into account.

OGE: How important today are the oil and gas services for the Russian economy?  

Melnikov: I’d like to stress that the notion of the oil and gas services should not be taken literally since those are not the services of catering to artificial dependence of Russia on raw materials and technologies, but a method of obtaining information about the status and future prospects of the mineral resources country-wide based on results of geological surveillance works, seismic research, drilling, geophysical wells research both off- and onshore.  Moreover, the oil and gas services provide the required level of production and transport. This includes design of production and field development and wells workover as well as automation of fields, oil recovery enhancement, offshore platforms construction, etc.

OGE: How do you explain the strategic importance of developing the service industry?

Melnikov: This high level of hydrocarbon production does not protect from, but on the opposite, leads to dependence of the economy on raw materials, which increases manifold if the country’s mineral