Grigory Stratiy , Murmanshelf
Release Date: 2010-09-13
Grigory Stratiy, Director General of Murmanshelf, was interviewed by Russiaenergy.com for a Russia Special report for Oil and Gas Financial Journal to discuss the potential that Murmansk has to become one of the offshore oil and gas capitals of the world, its unique geographic position and its natural riches.Mr. Stratiy, you have just returned from the Subsea UK Offshore conference. How was the atmosphere there? Does your participation in the conference mean that we are going to see more international companies coming to Murmansk in the near future?
I visited this conference after signing an agreement with Subsea UK in October 2009 during the first International Economic Forum, which took place in Murmansk. Alistair Birnie, Subsea UK’s Chief Executive invited me to the conference, and gave me the opportunity to make a speech as the Director General of Murmanshelf. The association was founded four years ago with the participation of the Murmansk government. Its purpose is to unite companies in order to participate in projects on the Arctic Shelf, the first of these being the Shtokman project. Today, the association has 240 members, 60 of which are foreign companies. So far, there are only two from the UK. Murmanshelf’s cooperation with Subsea UK has only just begun, but I am optimistic after the reaction from the conference that the number of British companies in Murmansk will increase in the years to come.
Murmansk has the potential to become one of the offshore oil and gas capitals of the world. Obviously the infrastructure needs to be put into place before that can happen. Is Murmansk ideally suited for that at the moment, in terms of the infrastructure currently in place?
It’s a good question. In Gazprom’s 2030 strategy, development of the infrastructure in Murmansk has been designated as a priority. It is no accident that Gazprom has focused so much of its attention on the region. Murmansk is very close to the Arctic Circle, and its population is over 800,000 people. Murmansk is the biggest city in the polar region, with 310,000 people living within the city. Murmansk region has unique mineral resources: it is a very industrially developed region. Traditionally fishing, aluminium and iron production, nickel, copper and other mineral mining have driven the industry in the region.
Education is also very well developed in Murmansk. We have a technical university, and universities specialised in international languages, in preparation for the international city that Murmansk is set to become. We have branches of the biggest universities of Russia, and primary education is also at a very good level. It’s a young and dynamically developing region.
Of course, the future of the Murmansk region to a large extent relies on the development of the oil and gas sector. Murmanshelf has studied the experience of other oil and gas capitals, particularly our largest neighbours such as Stavanger, Aberdeen and St. John’s, and it is clear that the more the shelf is developed, the the more the region develops alongside it. Now we are at the beginning of this journey, and the activity of our association will contribute to the partnership of the Russian and international companies that will participate in projects such as Shtokman. We are sure that in the next 10-15 years, within the first stage of the Shtokman project, Russian companies will manage to gain experience which will be enough to produce work themselves, and that partnerships they will have with foreign companies during this first stage will develop through the following stages, and hopefully to other projects. In the future, we hope it will become global.
Murmansk is not, however, starting its oil and gas business from scratch. It is home to some of the most experienced oil and gas service companies in the country, such as Arktikmorneftegazrazvedka and Sevmorneftegeofizika who have been working from Murmansk for 30 years, and discovered all the resources on the Russian shelf.
I imagine there must be a slight conflict, as you want to promote Russian industry, but at the same time both the region and the projects there demand international expertise. Is there a conflict there, and how does your association work to help both international and Russian companies?
There is no conflict. We work in the interests of the project operators. Gazprom have given an excellent example by inviting international companies Statoil and Total to share in the Shtokman project. The opinions of those who know the Arctic and subsea work is that the Arctic Shelf is extremely challenging, and a fragile environment. We need advanced technologies in order to ensure that no environmental damage is caused. There is also the issue of dealing with the extreme location of the shelf, and all the challenges it brings. Implementation of this project is difficult, that’s why we will need international cooperation.
Murmanshelf is trying to put the correct conditions for this in place. The association organises seminars, conferences, B2B meetings, Just last year, we organised four conferences in Murmansk, together with Shtokman Development AG, which featured detailed discussions on what will be required for the project.
Speaking generally, one of the main task of our association is to work towards the equalising of the different cultures, international and Russian. Apart from the natural challenges related to the project, there are also big difficulties at the cultural level, as well as different legislation, traditions, and language problems.
How is the atmosphere with Murmanshelf’s member companies? I imagine with so many companies, there must be quite a competitive attitude between them.
Competition only serves to contribute to better results, and paradoxically, we even try to sustain this atmosphere. From one side, we help to bring the companies together, but from another side we try to sustain this spirit of competition within the association. Shtokman Development also tailors its policies to sustain this atmosphere of competition. The tender procedures that they organise are done to international standards, openly, and with great respect to all participants. In any work, there is always some friction between parties, but we try to put it in a civilised way.
I imagine that most of the companies that have been attracted to Murmansk so far have come because of the Shtokman project. The latest announcement was that the project would be pushed back three years from the original completion date. Are there projects other than Shtokman that can keep these companies in Murmansk?
We do not take the decision that was taken on February 5th 2010 by the Board of Directors of Shtokman Development AG as the announcement of a three-year delay. Rather, it’s about the investment decision, which was pushed back one year. The terms are already defined. They decided to divide it into two parts, defined the partners for the project and decided that by March 2011, the final decision on pipeline gas will be taken, and the LNG decision will be made at the end of the next year.
The project is not postponed, but is alive and going. Shtokman Development is still working to develop the project. Gazprom, from its own finances, is building a road from Tiribirka to the site of its future LNG plant. It is clear that these companies are not abandoning the project, but rather continuing to invest in the region. The view from the Subsea UK conference is that the companies are also viewing the project in this way, and this is shown by the fact that new companies have decided to join our association. Projects like this have their life cycles. It is not always clear how it will go, but we know that the project is alive and moving.
When do you think Murmanshelf’s job, as an association, will be complete, if ever?
Here, Murmanshelf needs once again to look at the experiences of my colleagues, associations such as INTSOK and Petroarctic from Norway, or Subsea UK. They have the same goals as us, but have been working for decades, and still look very fit, and useful, as associations.
Mr. Stratiy, your colleagues at Subsea UK are now bringing UK companies to Russia. Do you think one day you will bring the Russian companies abroad?
The cooperation that we have now in Murmansk will enable Russian companies to achieve certain competences and gain the technologies in order to work globally with other partners. Murmanshelf is sure that in the next 10-15 years in the territory of the region, there will be successful international clusters of industrial companies working on the shelf and providing related services.
All over the world in the oil and gas industry there is a deficiency of qualified workers. Nearly all countries have the same problem. That is why education is one of Murmanshelf’s purposes. We founded the Arctic Centre for the preparation of specialists, headed by Dr Olga Butch. She has great expertise, and has been working for 18 years in the Murmansk Technical University as Deputy Dean. She is a very good organiser with great analytical skills. Murmanshelf helps her to raise interest from the industrial companies in this Arctic Centre, which is aimed at the integration of all types of forces within the region, and concentrating them on the development of industrial clusters.
When these international companies and institutions come to Murmansk, what are they the most impressed with?
They are normally impressed that the reality exceeds their expectations. They see it is a young, energetic city where there are great conditions for both working and living. Many Norwegian and Finnish companies already know and love our region. I think that any company who comes to the region very quickly begins to feel part of the city. A very good example is Reinertsen, a Norwegian company that builds platforms and other construction projects for subsea infrastructure for Statoil and FMC amongst others. They are 100% Norwegian company based in Murmansk. Now, in Murmansk, they have built a workshop and in they do work there for tenders in Norway. A recent tender they won means they will double their personnel in Murmansk.
Is there something else you would like to add to our readers?
For those that are considering Murmansk as a potential business location, please contact Murmanshelf, and we will be happy to provide you with any information and help you need. For those companies already in the association, I would like to thank you for your continued belief in what we do; and for those companies that have just arrived, the message must be: Welcome to Murmansk!
Thanks, Mr. Stratiy, for talking to us!
| Company: | Murmanshelf |
| Position: | Director General |
| Country: | Russian Federation |