Kerui's Li Jinxu: Our Toughest Competitor Is Us

Kerui's manufacturing business unit in China encompasses six factories including the plant for manufacturing and assembly of drilling rigs in Dongying, the Shandong province

Kerui's manufacturing business unit in China encompasses six factories including the plant for manufacturing and assembly of drilling rigs in Dongying, the Shandong province

By Bojan Soc, July 27, 2015

United States or Canada yet?

Li Jinxu: Not yet, but we did have a contract in South America to supply fracking equipment for a client in Venezuela. As far as our cooperation with U.S. companies goes, in Beijing we have a joint venture with Cameron devoted to research of shale gas production. We also cooperate with a university in Canada on the same topic.

OGE: How is your manufacturing structured in China?

Li Jinxu: Kerui has three business units, and one of them is the manufacturing unit. It includes six factories that produce drilling rigs, compressor units, wellhead equipment, special units (cementing units, coiled tubing, fracking equipment), sucker rod pumps and tubular goods.

OGE: What types of Kerui oilfield services equipment enjoy highest demand in Russia?

Li Jinxu: The size of Russia’s OFS market is pretty big, and we chiefly supply compressor units and drilling rigs to our local clientele. After Russia was hit with the sanctions, U.S. companies halted deliveries of subsea wellhead equipment that is used in offshore projects. These developments offered us a chance to secure our position in this segment of the market. Our chances look solid: in the past, Кerui engineers had worked over many years for U.S. companies, they know the equipment very well, and we have bought modern, cutting-edge units to manufacture wellhead equipment at our Chinese plant. Back in the day we created on purpose a JV with a Singaporean company to manufacture wellhead equipment and it still continues to operate successfully.

OGE: Has Kerui had any experience in delivering equipment for Russian offshore projects?


Li Jinxu: Through our subsidiary in a third country we delivered wellhead equipment for an offshore project run by an international company partly owned by a Russian firm. We haven’t had any projects yet in Russia’s waters, but we are holding intensive talks with potential partners.

OGE: The sanctions ban Western companies from participating in Arctic and deepwater offshore projects in Russia. Their departure has apparently opened a niche for Chinese suppliers. Are you ready for this, do Kerui equipment specifications comply with the highest industry standards?

Li Jinxu: Of course they do. U.S. companies certify their products as per API. Our equipment is also API-certified and it’s perfectly suited as potential replacement.

Copyright, Oil&Gas Eurasia, 2015