佛赛沃洛德 克什巴姆, 俄罗斯石油和天然气设备生产商协会
Release Date: 2009-05-29
2009 is going to be a hard year for all sectors of the economy, and the oilfield services market is forecasted to contract by 20-25 as production companies freeze their development projects. How do you see the situation this year?I believe that one of the main problems of the Russian economy, specially now in times of crisis, is that it is not diversified and that policy corrections should be made to address this problem.
The well-being of the Russian oil and gas industry has turned into trouble: extremely high prices for carbohydrates have generated illusions of economic well-being, but the Russian authorities did not manage to form the necessary system of priorities to optimize the development of hi-tech industries, and this has made the country literally “oil-addicted”.
Which companies will be most affected by the current economic context? Do you think that only strong and large companies able to invest in development will survive?
Our association gathers some 200 members, and I can really say that some of them are real success stories. For example, INTEGRA, had, despite the crisis, amassed total revenue of half a billion US dollars last year. Eurasia and SK are also as “very serious” companies. It is not so much about the size of the company but about the talent of its management. The talent of the managers is what will make Russian companies survive. I think Mr. Lubashevsky, from INTEGRA, is an example of excellent management; a very talented young professional, he’s only 35 years old!, trained in the London School of Management, aged only 35…
But the current crisis is likely to affect R&D across the country, how is this to affect the sector in the long-term?
Most companies in the present circumstances cut their non-profitable assets and specifically R&D units, but that in my view this is one of the reasons they will not do well. INTEGRA is actively supporting its company’s Drilling Institute, whereas other companies such as RusAl (Russia’s aluminum giant) have just closed down their Scientific Research Division. Plus, there is not enough public investment in R&D. The US devotes 4% of GDP to R&D, Germany and Japan, 4% of GDP, while Russia invests less than 1% of its GDP in R&D. The cuts in the federal budgets together with the O&G companies in crisis cutting their non-profitable assets make competition very tough. There is a need for an industrial policy which does not exist at the moment. I have spent the last 10 years of my life talking about this: Education is a must! Unlike the U.S. program, Russia’s anti-crisis plans do not envisage additional financing of scientific research. It looks like the Government does not see the efficient role of science in solving anti-crisis problems.
So, what should be the main lines of a new Russian industrial policy in your view? What should be the role of the State and where is the line that divides State support from State interventionism?
Russians are not always very competitive for various reasons: Firstly, there is not enough Government attention, no federal programs of development and O&G equipment companies are feeling orphaned. Secondly, at present it is more profitable for Russian companies to buy equipment from abroad that Russian-made, because of the taxation regime of very high taxes. And thirdly, the O&G companies are not being stimulated to invest in the service sector.
For instance, out of 27 operating refineries located in Russia, only one is capable of producing petroleum compliant with Euro-4 standards. Oil refining is a specific topic: over 80% of the equipment is worn-out, far more than the allowed rate, and taxation of Russian oil companies does not motivate investments in this sphere. I am not calling for direct state financing of the machine-building industry, including the 400 plants that produce oil and gas equipment and components, but the actual task for the Russian lawmakers is to create a set of tax preferences through the legislative system to stimulate oil and gas companies to invest in the development of equipment production. As early as before the crisis, just a few months ago, 25% of the equipment used in the oil and gas industry was imported; in total, half of equipment operating at Russian fields is of foreign origin.
Russian oil and gas and service companies that buy foreign equipment complain about the insufficient competitiveness of Russian products, the imperfect financial relations with the customer and the breach of the terms of fulfilling the contract obligations. These complaints have a grain of truth: to some extent, equipment manufacturers are to blame themselves for their troubles. However, their guilt is just part of the problem. Again, we are forced to face the most important reason of low competitiveness of oil and gas equipment sector: the apathy of the Government in managing Russia’s industrial potential. The role of the Government is enforced only through the fiscal tax system - namely the fiscal system - as the enforced taxes do not provide any regulation.
There also seems to be a real problem with harmonizing standards and making them in line with international ones. How do Russian standards compare to international ones?
Modern harmonization of standards is in process but, so far, not there yet. Standards at present are absolutely different. In Russia the ‘GOST’ standards are mandatory, and the international ones ISO are recommended. But let me point out that we don’t have any GOST standards for offshore operations as Russia lacks the western specialized knowledge in this sphere. Also, in Russia standards are revised every 10 or 15 years, whereas in the US revision comes every 5 years and in Germany and Japan every 4 years! This basically means that Russian standards do not reflect the latest trends and we are literally 10 years behind everyone else in standardization requirements.
But not everything is negative; there are many positive developments. We are working at the moment on developing a new standard system that will include best from GOST and international standards (API, GOST, EN, ISO...). We want to create something new and good. It is a topical subject, firstly, because a Federal Law “On standardization” is being drafted, and now, during the initial stage, it is extremely important to correctly base this law on modern ideas of the role, methodology and other concepts of the system of national standards.
How is this lack of standards and technology situation affecting Russian competitiveness?
The Russian service and equipment market is divided between international companies with 30% of market share and Russian companies controlling the other 70% of the market. In the drilling segment, at least, this ratio will prevail. One of the main disadvantages of the Russian companies is that they can not tackle a whole project by themselves but only do separate operations, which means there is a main contractor which then involves other companies in the process. On their part, the main disadvantage of international companies in Russia is that they are very expensive because they offer very high quality due to very advanced technology.
However, there is a new situation developing with the arrival in the market of Chinese service companies which offer a very cheap price but whose standards are “unpredictable”. There are hundreds of these Chinese companies all over the border between China and Russia. The Chinese basically try and reproduce US or European equipment, but the result is not so good. Russian companies are somewhere in the middle; their equipment is rather good and not expensive, but not super specialized. At the other end of the spectrum, Westerners have very high-tech equipment. The Russians buy this equipment - sometime second hand and they upgrade it, and this is not a secret. We buy equipment from companies such as MOLEPAC and HATTON, we renovate it and successfully use it.
Partnerships between Russian and Western companies are one of the best ways to improve the quality of the Russian equipment and services companies and make them competitive, by means of JVs etc. But I am aware that it is more profitable for Western companies to sell here than to enter into JVs with local partners. There is a need to create powerful holdings and JVs, private, of course, but I wouldn’t exclude the State either.
Can Russian procurement and service companies develop the national offshore projects in the Arctic Shelf and in the East Siberian fields by themselves?
Whether Russia will be able of exploring the Arctic Shelf by itself... I think not. The shelf projects will have to be international and in fact, they already are, for instance in the Stokhman field is being explored and developed by a Joint Venture of Gazprom, Total and Statoil.
But Russian legislation heavily limits foreign and even non-state Russian company’s access to the Arctic Shelf development or any fields considered ‘strategic’…
The Russian law might change. The Russia law is very dynamic and keeps being amended. We had a very negative experience in the Sakhalin Product Sharing Agreement and as a result it is difficult for foreign companies to operate here, but I believe this is temporary and that the imperfections of the law will change.
The Arctic Shelf has no analogue in the world and we can not rely on Russian companies dealing with these issues alone. The conditions in the Arctic Shelf are incredibly difficult and have never before been faced... even the North Sea’s conditions - which are tough - are not comparable! We realize we need foreign expertise, without the international experience we can not solve the problem at all. But the Stokhman field will be explored within this cooperation so let us gain the experience. I don’t think there is a discrimination of foreign companies. I think we lack the experience at the moment, but I am confident everything will be ok in the end. I am a specialist not a politician and from my point of view, Russia alone can not develop the Arctic Shelf. Russia has other areas of expertise; let’s not forget Lukoil which has great E&P in the Caspian Sea, Nigeria and Venezuela.
Europe, China and India need huge amounts of oil and gas. If China’s economy continues to develop despite the crisis; the Russian shelves will be in demand. I believe that after a crisis, prosperity comes...As Lenin used to say: ‘come back to us in 20 years’ or even in 5 years, where active drilling will be underway in the Prirazlomnoye field in Stockhman.
Thank you Mr. Kershenbaum for talking to us!
| Company: | 俄罗斯石油和天然气设备生产商协会 |
| Position: | 联合主席 |
| Country: | 俄罗斯 |