Nikolay Levitskiy , Geotech Holding
Release Date: 2010-07-29
Nikolai Levitskiy, President of Geotech Holding, was interviewed by Russiaenergy.com for Oil & Gas Financial Journal to discuss the current development of Geotech Holding and its main activities as well as its prospects both on the Russian market and internationally.Geotech Holding was created four years ago and became the market leader in 4 years with 42% of the Russian market of seismic studies. How did Geotech Holding achieve this tremendous success in such little time?
We have managed to increase our market share after a series of acquisitions, so our share is also the share of companies that we have acquired, which had more than half a century of experience in the oil services market. This led us to employ nowadays more than 12,000 people and become one of the largest onshore seismic service providers in the world.
How did you spot the right moment to build the company four years ago?
The entire servicing sector was facing consolidation, and our team is very experienced in MNA and consolidation. The idea was to form a dedicated holding for geological exploration. Geotech Holding is the only company in the oil servicing market to have taken this niche.
Despite the situation in world markets during these four years, this period was crucial for Geotech Holding. Having acquired the assets of Khantymansiyskgeofizika OJSC, the Company became the leader of the industry. Our growth did not stop there; we started preparation for 2008-2009 season by implementing comprehensive technical modernization of the companies of the holding. The purpose of this modernization was to maintain the high quality of work and provide our clients with services that meet the latest requirements of the geological exploration industry. This was the largest modernization in the industry in the post-Soviet era – and we are now reaping the benefits of it.
What are the main advantages and strategy behind of consolidating Geotech Holding in this area and expanding into other niche areas?
The strategy is to develop in four directions. Firstly, our leading direction is onshore field seismic works. We’ll grow with the market. Our current capacity allows us carry out any project in the shortest terms. For instance, we have accomplished the largest project in Russia covering 1,700 sq. km over one winter season. We’re ready for any projects of any size in the shortest term.
The second direction is exploration drilling. We’re confident that exploration drilling in Russia will expand and we’ll make our niche in exploration drilling comparable with our niche in onshore seismics.
The third direction is equipment production based on our own developments for unique equipment for seismic studies used both for onshore and transit zone seismics. We plan to expand this unique method of seismic transients and implement it as much as possible. If we take the whole amount of our seismic exploration works, about 30% is done using the explosion method, 30% involves the method of seismic transients and 30% - our own method of unique complex sources. Last year Geotech Holding has made a few procurements to the USA, Canada and Iran. This model is very similar with that of CDG Veritas whose considerable part of the business is manufacturing seismic equipment but it does not mean that we only want to focus on manufacturing equipment.
We also plan to develop offshore seismics as the fourth direction. Geotech Holding, as the largest geological exploration company on the Russian market, will have to develop offshore business if Russia is challenged with offshore projects however we’re not yet ready to go international.
Last year Geotech Holding entered a government’s list of the main strategic companies in Russia which the recognition of your importance for the country. What are the main arguments of your strategic importance for Russia?
The entire list of strategic enterprises was published in 2009 and included 200 companies in every sector that can count on state support as the system-forming enterprises. Geotech Holding, as the biggest Russian company in geological exploration, was included in the list.
Since the foundation of Geotech Holding, you’ve been consolidating the company and looking for new partners such as Volga Resources that became one of the shareholders with 25% + 1 shares in March 2010. What is the importance of the new partnership with Volga Group for Geotech Holding?
Volga Resources has a lot of experience of successful participation in big oil and gas projects, so we expect this synergy to be very productive and useful for the success of Geotech Holding in terms of finance, experience and the further IPO.
Service providers in the oil and gas market were particularly affected but the crisis but now we’re seeing signs of new opportunities… How do you find the competitive arena in Russia for the new sectors that you’re trying to target?
Our main competitive advantage is our vast experience and perfect knowledge of the territories where we have been operating for a lot of years: East Siberia, Yamal, Timan-Pechora and Western Siberia. We also have cutting-edge technologies, advanced organization of the work and the available facilities. Our task is to comply with the highest international standards which makes us competitive with Schlumberger and the largest Russian companies in this segment. We apply the same equipment and the same methodology.
What will be the future role of Geotech Holding in the Russian oil and gas industry and how do you see the company evolving?
Our current priority is to contribute in the development of East Siberia. In general, Russia is one of the energy leaders in the world. Traditionally, geological exploration has been very well-developed in Russia, and Geotech Holding, as the Russian leader in geological exploration, should keep its market share in Russia, develop offshore and onshore projects internationally and, possibly, carry out exploratory drilling. In this regard, we want to implement a lot of international projects beyond Russia and the CIS: for instance, in Latin America and South-East Asia. Our task is to be part of the global community and keep the pace with the largest Russian oil and gas companies. In this regard, we’ll expand in the West to participate in international projects representing the capacities of Russia.
The world has its eyes on Russia, and readers from all over the world know that the opportunities are here. What would be your final message to the readers of OGFJ on the international arena?
Geotech Holding is a purely Russian company with Russian top management and mostly Russian technologies, so we feel we’re an ambassador of Russia on a global scale in our segment. Geological business is one of the faces of Russia, so Geotech Holding, as one of the industry’s majors in Russia, can also be considered the face of Russia.
| Company: | Geotech Holding |
| Position: | President |
| Country: | Russian Federation |