MIOGE 2015: A civilized market is the key to developing the sector

June 25, 2015

The second day of work at the 12th Russian Petroleum and Gas Congress opened with a roundtable entitled "How to become a supplier to oil and gas companies". In opening the event, Alexander Romanikhin, the president of the Association of Oil and Gas Equipment Producers, briefly commented on the past and noted that much had been accomplished since the Soviet era to build relations between clients and suppliers in the oil and gas industry.

"I remember USSR State Supply which gave orders for oil and gas equipment", Romanikhin said, "When the Soviet system collapsed, there was a wild market in which there was a huge number of intermediaries. Then came a system of failed payments and we all remember how oil and gas equipment manufacturing turned into light vehicle manufacturing and there were mutual account settlements and veksels…And then the market started to become more civilized. In recent years a lot has been done so that the word "supplier" is not associated with the words "thief" and "corruption". A large role in this was played by the market approach taken by vertically-integrated oil companies which brought in highly-qualified employees who knew different languages and studied foreign experience and who could work with various financial instruments". 

Deputy director of the Metal Processing, Tool-Building and Heavy Machinery Dept. of Russia’s Industry and Trade Ministry, Sergei Kononenko, informed congress participants that the ministry had forwarded the Russian government a directive on a 30% minimum increase in advances for supplying oil and gas equipment and lowering payment terms to 60 days. "In the near future, this directive will be sent to all companies with state ownership", Kononenko said.

This measure will certainly stimulate Russian tool-building companies and innovative enterprises which want to carry forward the state program on import replacement.

Kononenko pointed out that on November 3, 2014, the government confirmed a plan of measures to lower dependence on imports in the fuel and energy complex. Specialists working in expert groups and acting as members of a scientific technological council formed by the ministry analyzed the needs of all of the largest oil and gas companies in Russia for imported equipment with the goal of identifying specific technologies which are currently purchased abroad. The result of this analysis identified "red zones" — groups of technologies in which the share of imports is critically high (over 70%) and a lack of which could lead to stops in production, and consequently could threaten national security. Each "red zone", the official added was being presented with an import replacement program which includes road maps through 2020 and a budget assessment of project costs.

Svetlana Solafilyeva, the head of the Slavneft department for efficiency and methodology, spoke about the principles of procurement in the large oil company she represents. Solafilyeva stressed the transparency of conducting open tenders. She said that after conducting technical assessments of equipment offered by tender participants, with all things considered equal, Slavneft gave preference to the supplier who could offer the lowest prices. "When