Denis Prikazchikov , Acergy
Release Date: 2010-08-05
Denis Prikazchikov, Head of the Representative Office for Acergy Russia, has been interviewed by Russiaenergy.com for Oil and Gas Financial Journal to discuss the current market trends in the Russian offshore industry, Acergy's first steps in Russia and its main achievements.Acergy set up its offices in Moscow in 2007, in order to capitalise on the offshore potential that was present in Russia. Today, three years later, how do you think market trends have evolved for the Russian offshore industry, and how have they affected the way that Acergy has approached the market?
With the financial issues of today, the prospects for the Russian offshore segment are not quite as bright as they once were. However, the whole of the Russian hydrocarbon industry understands that there is no option other than to move to offshore. There are fewer fields left to be discovered onshore today. This activity needs to start in the near future, because it will take time to develop the technologies and the personnel necessary to take advantage of Russia’s offshore assets when exploration becomes a necessity. Many Russian oil and gas companies now have overseas assets, in place like West Africa and Venezuela. Having domestic offshore activities can only help these companies better understand the nature of shelf exploration.
And so, Acergy remains optimistic, because the company has such experience in developing the offshore industry. Russia has already had offshore success, at Sakhalin, in the Caspian, and at Shtokman, and can fully capitalise on its future offshore potential with the help of international companies who have both experience and expertise.
Acergy’s first projects in the Russian market were at Sakhalin. How was that as a first step for the company?
Acergy’s very first step in Russia was establishing office in Sakhalin. After two small projects on Sakhalin, sub-contracting, the management decided to close the office on the island, but understood the potential of Russia as a whole. As a result, in 2007, a year of prosperity for the oil industry, Acergy decided to open an office in Moscow, the place where all the stakeholders in the Russian industry are based.
I imagine that Acergy head office is still asking similar questions to those being asked in 2007: is this worthwhile? Are we making money here? What do you tell them?
Although Acergy has not won any Russian contracts since establishing its office here, it has succeeded in becoming visible in the marketplace, and has positioned itself as a strong player, having taken part in a number of large tenders, such as Nord Stream. The management team in Norway and the UK have their hands in the Russian market, and understand the difficulties and obstacles associated with establishing a business here, which are the classical issues a company faces when entering any new market.
Business culture in Russia is founded on establishing personal relationships with the right people, and on past experience. For these reasons, it is important for Acergy to choose its first project very carefully, and complete it to perfection. This project will not only create the start of Acergy’s track record in Russia, but will also allow the company to gain valuable contacts within the industry.
Where is Acergy focused in looking for those projects?
The company is primarily focused on the Shtokman field, as there is a huge scope of work to be done on such a large project. As a result, many different international contractors will be involved. It is a perfect first step for Acergy: the site is close to Norway, which will allow the company to capitalise on its existing infrastructure, as well as its experience in the North Sea, which is very similar to the Barents Sea.
Acergy has a very long relationship with Statoil, through projects on the Norwegian shelf, and all over the world. Will this help the company in terms of competing for tenders on the Shtokman project?
Phase I of the Shtokman project is operated by Shtokman Development AG (SDAG), and although Statoil, Total and Gazprom are shareholders in this consortium, it is very definitely and clearly distinct from its member companies. The only leverage that Acergy might gain at Shtokman is the knowledge of the Statoil specialists about the company, and their awareness that the company provides its services on time, and within all other requirements. I appreciate the position that Shtokman Development has taken in this respect. It is crucial that this project be open to all stakeholders, Russian and international.
Acergy realises that in the long term, Gazprom is and will be the main player in the Russian offshore market. Working with Shtokman Development is much like working with an international company, and this is very comfortable for Acergy, but at the same time, the company is working very hard to position itself well with Gazprom and its subsidiary companies, profiling itself as the partner of choice offshore and competing for contracts operated by Gazprom.
Gazprom is different to other clients, not because it is state-owned, but simply because of the scale of the company, and that it is rooted in Russian business culture, which involves a very different style of decision-making. It takes time to fully understand how a company like Gazprom operates, and takes decisions.
Do you find that Acergy’s competition in Russia comes more from national service providers, or the other international players looking to gain a foothold in the country?
The nature of Acergy’s area of expertise means that competition comes predominantly from other international companies. In order to build subsea structures, a company must have a fleet of specialised vessels, and only a few of these are operated by Russian companies today.
Lukoil has a relationship with Acergy in the Netherlands through Seaway Heavy Lifting, a joint venture between the two companies. Here in Russia, Lukoil uses a Russian company to service its offshore assets in the Caspian. Do you feel like Acergy is missing an opportunity?
Acergy is aware of the opportunities. However, the Caspian Sea is a very special case: it is essentially a lake, albeit the world’s largest, and as such, it is impossible to bring the company’s large construction vessels to the region. It would be possible to build new vessels specifically for work in the region, but this would require a large investment on behalf of Acergy.
Murmansk is an ideal region for Acergy to invest in. Murmansk is a region currently undergoing a transformation. The offshore projects that are being based out of the region mean that there are many investment opportunities, for any type of business, from infrastructure, to transportation and logistics. The demand for regional development created by these large projects such as Shtokman means that all types of businesses will flourish there: the market is empty, and bursting with potential.
So far in Russia, Acergy has been focused and aggressive in the offshore regions that can be developed in the near future: Shtokman, the rest of the Barents Sea, and Sakhalin. The Caspian, Black and Azov Seas definitely have potential, but would require high levels of investment for uncertain returns.
In the longer term, areas such as the Kara Sea, and the Yamal Peninsula are extremely promising, but are beyond existing technologies. Acergy’s R&D department is aware of the prospects of these regions, but development is only really happening in the places where the level of development demands it. From a global perspective, this currently means that technology development is focused on finding solutions for exploiting ultra deep-water reserves in regions like the Arabian Sea, Brazil and West Africa.
If anyone can develop the technologies to work in these Arctic regions, Acergy can, but until the level of development, and enthusiasm for developing such projects comes from the oil and gas companies, there is no impetus to move in this direction. It makes much more sense today to concentrate on areas such as the Barents Sea, where more companies are more enthusiastic about developing.
What makes you think that after years of deliberation, time has finally come when tenders will start to be awarded in the Barents Sea?
Entering new markets always brings risk, which can rarely be estimated well. Acergy took the decision to enter the Russian market, and to stay for the long term, because the company believes in the potential for doing business here.
Acergy has world-class technologies and a perfect track record, more impressive than any of its competitors. The company’s strategy of being focused on one particular segment of business, subsea construction, will prove to have been the correct strategy for Russia in the long term. Our competitors often have the support of parent companies, or have very diversified business. Over the last two years, Acergy has succeeded in convincing its Russian counterparts that Acergy is the best at what it does. This means that we do not have to diversify to other business lines, which provides a very good basis for cooperation with Russian businesses.
This strategy will be more successful in the long term. When a large, diversified company enters the Russian market, it faces competition from the Russian companies. We are trying to compete in the very narrow segment so that we can face no competition from within Russia.
| Company: | Acergy |
| Position: | Head of the Representative Office for Acergy Russia |
| Country: | United Kingdom |