lshat 瓦利乌林 , 俄罗斯天然气工程集团
Release Date: 2010-08-10
lshat Valiullin, Director General of RusGazEngineering, has been interviewed by Russiaenergy.com for a Russia Special report for Oil and Gas Financial Journal to discuss the main challenges he faced as one of the founders of RusGazEngineering, its development and internationalization since 2003.As the founder of Rusgazengineering in 2003, what have been the main challenges you faced in order to create this company with only 2 people up to its almost 1,000 employees nowadays?
When we just started this endeavor we had one task to achieve: to transform paper into iron. I was hired by companies that were producing technical design projects and wanted Rusgazengineering to transform its projects into procurement and possibly even construction.
The initial idea was simple, but its implementation was quite a challenge. The biggest obstacle was that we didn’t have experience in procurement. We had very new technological processes and a very good view on how to design equipment but we weren’t completely aware of what procurement really was about and the difficulties we would face. The learning curve included very basic things such as price formation and which factories and plants would provide us with equipment; thus our list of producers was constantly changing. Ultimately, in order not to have to deal with all these changes we decided to purchase our own plants.
Finding the right providers and the know-how to assemble the equipment acquired were the first challenges that had to be overcome. Due to the company’s competence – and indeed a certain amount of luck – Rusgazengineering’s first partner was Lukoil West-Siberia. When they first approached us we were only a one-office-underground company whose main asset was my recognized previous experience.
By offering tighter controls, higher quality, the lowest price and a commitment to deliver the procurement project in the shortest term we won the competition against a Canadian firm. It is also important to acknowledge that our employees took full responsibility for this first challenge and they were the ones to merit from its success. With this first procurement project Rusgazengineering tested all logistics, assembling and maintenance capacity. The bottom-line was that we knew this first project would determine Rusgazengineering future, so we gave our full dedication for its complete success.
As evidence of our achievement, last year Rusgazengineering completed a second stage of work in the same site and Lukoil West Siberia became our best client. Even with changes in their management board since our first project they stuck with us and our win-win relationship has been maintained thanks to our complete compliance with their requirements.
Nowadays we are one of the few companies in Russia who has increased its competences in project management and procurement, entering areas such as automation, design of sites and technological engineering, to name but a few.
What are the main assets Rusgazengineering offers its partners which explain for its considerable growth during its short 7 year history, and what differential can you bring to both Russian and foreign clients and partners in such a competitive market?
Nowadays, project management is our main asset. Rusgazengineering offers advanced standards of engineering projects’ management. For instance, we have mastered 3D PDMS automation modeling for both equipment and engineering. Thus, nowadays Rusgazengineering deals with Western companies at the same level of quality and expertise as them.
Naturally, we have a few problems with efficiency because it is easier to change the mentality of people who deal with project management than that of the technical staff. But here we have to differentiate the so-called Russian expertise.
Why are Russians different from other nationalities? First of all, we are very creative. We will always need to innovate the standard solutions because the reality is not encompassed in a model as some Westerners tend to believe. Western companies think that everything should be classified by standards situations. They strictly separate people with ‘creative tasks’ from those who will apply it. For instance, the French IFP (Innovation, Energie, Environment) has a huge research center which has produced more than 2000 licenses but they don’t apply this knowledge themselves, they outsource it. Whereas at Rusgazengineering we have a scientific department responsible for more than 200 patents and based on those discoveries we produce our own equipment and apply these advances to our internal procedures. Uniting both the R&D and its application is an important link that Rusgazengineering focuses on. This can be said to be somewhat typical of a real Russian player.
Naturally, being in Russia also poses challenges. We're still carrying the burden of the lack of managerial skills from Soviet times. American efficient labor management systems spread quickly to places like Japan but only now are they being applied to Russian companies, so there is still a long way to go. Furthermore, last year’s crisis showed us that even though Rusgazengineering is well ahead of its Russian competitors we still have to advance in efficiency of production.
Thanks to our international partnerships with companies such as Technip, Lurgi, BP, PETRONAS, etc, Rusgazengineering has untapped the potential for improvement that was lying ahead of it, and this is what we are aiming at right now.
You mentioned the challenge of changing people’s mentalities and attitudes especially when these qualities have also positive connotations, such as experience and creativity. How has that actually impacted Rusgazengineering and how are you trying to overcome it?
Let me answer the first question with a joke. A pilot is greeting the passengers: ‘welcome to the best aircraft ever, you have a swimming pool onboard, a sauna, a restaurant; there are volleyball fields, mini-golf… and now please fasten your seatbelts as we'll try to take off with all this stuff’. So yes, we do have the best experts with enviable experience, but now we need the right managerial tools to take-off not only in Russia but also internationally.
It is a fact that Rusgazengineering developed considerably since 2003. But as the business reaches a new scale, better management governance gains even more importance. All the Russian creativity and higher expertise actually has a down-side – Russian people tend to think that the top management is often mistaken and take contradictory decisions. They begin to doubt the decision taken by top their management, thinking that there may be a way of doing it better. As you can imagine, this makes management even harder.
Russia is not only geographically between the East and West, but also in the mentality of the people. Our main task is to take advantage of the ups and overcome the downs by making our employees understand the benefits of combining the hard work and determination of the Chinese, with the Russian creativity, and adhering to western standards. This is the point from which we are trying to take-off.
In order to so in the best way, Rusgazengineering is now standardizing its different divisions, solving its internal discrepancies and building synergies. This will better position the company among its clients. To have a single firm voice is essential if you want to build credibility in the market. Nowadays Rusgazengineering is widely recognized by the quality of its products and services. Our aim is to keep improving and offering better services at lower prices.
How much of Rusgazengineering activities depend on international activities and what’s the importance of these international operations when the company already sits on one of the biggest oil and gas markets of the world?
The internationalization of Rusgazengineering is a result of our expanding portfolio. We have developed our technological solutions not only to gas processing areas such as LNG, LPG or associated gas, but also by entering the special chemicals market. The petrochemicals part of our business is strongly developing in countries like Uzbekistan and Azerbaijan and a number of other CIS countries, whilst also reaching far away partners such as Venezuela and we are currently discussing opportunities with partners in the United Emirates.
In Uzbekistan, Rusgazengineering has already acquired an engineering institute for petrochemicals, which is the same institute we bought in Ukraine and we are now developing this line of business. As the person who actually developed these businesses and traveled to speak directly with the clients, I believe that within 3 years half of our business will come from abroad.
After all, if you want to create a stable international company it is not only a matter of volume of orders. Incidentally we do have enough orders from clients in Russia, but if money was the most important thing I would only stay here and deal with Russian clients. But it is also a question of experience. All these foreign countries bring valuable experience of working with international partners. The experience is gained not only from clients but also from counterparts – it allow us to combine forces with international clients on foreign markets and also learn with competitors. It is fundamental to experience different situations which will add not only to me but also to our entire team.
This is why I am so much interested in expanding Rusgazengineering abroad. We will take a very specific niche and position ourselves halfway between very expensive Western companies and very cheap – of questionable-quality – Chinese. Rusgazengineering is present on emerging economies, markets that know Russia and the expertise of Russian engineers. Russia is really famous for its high-ranking engineers. Of course, provided all these problems we mentioned before, but still we are very good in terms of expertise and foreigners really value that.
The fact that Rusgazengineering uses our own technological advances and integrate these with western technologies – not copying anyone – only adds to our international credibility. Rusgazengineering and its Western partners are showing the way to create true and complementary synergies between the Russian oil and gas industry and the world.
This report is not only about the opportunities in Russia but also about the opportunities that Russian companies can offer to partners
worldwide. Therefore, what will be Rusgazengineering founder’s final message to the readers of Oil and Gas Financial Journal?
Rusgazengineering works as the perfect integrator of Western technologies on Russian markets and the bridge to Russian innovative technologies into emerging economies – CIS, Venezuela, Iraq, Africa and so on. We speak the same language as engineers from those countries, literally! For instance, when I met the Minister of Oil of Syria we spoke in Russian.
In the coming years we shall see Rusgazengineering’s integration into the international market increase, together with the further integration of technological engineering for gas chemicals, sites, R&D, and so on. It is important to highlight that we provide not only technology solutions but also finance services to our partners when necessary.
Regarding Russia, our aim is to integrate technologies and efficient management procedures and, based on this, further develop our own R&D capacities. The final aim is to recover the competence Russia had 25 years ago during Soviet times and allow Rusgazengineering to capitalize on the full potential of the Russian expertise and creativity.
| Company: | 俄罗斯天然气工程集团 |
| Position: | 俄罗斯天然气工程集团董事会主席 |
| Country: | 俄罗斯 |