“The plasma-pulse treatment of the reservoir proved to be productive - like the multi-zone hydraulic fracturing, it was recommended by our specialists for application at the holding’s enterprises.”
Vice-President of OAO “LUKOIL”, General Director of OOO LUKOIL-Western Siberia.
One of the most important events of the past year, was LUKOIL reporting on its operations in 2011, marked by the stabilization of oil production in Western Siberia, along with such significant milestones in the Company's development as the launch of projects for the development of the West Qurna-2 field in Iraq, the signing of agreements for exploratory drilling on offshore blocks in Vietnam and Sierra Leone. The way out of the falling trend and stabilization of the level of production in the Tyumen North is indeed a vector event for the Company - today LUKOIL-Western Siberia provides for the production of 54% of LUKOIL oil and 63% of gas. How was it possible that against the general background of a decrease in oil production in Yugra, the enterprises of the holding came out of the “nosedive” and went into growth? What has been achieved in other fields of activities? This conversation takes place on the eve of the Day of the oil and gas industry with the vice-president of LUKOIL, the general director of OOO LUKOIL-Western Siberia Sergey Kochkurov.
New productive horizons
— Sergey Alekseevich, starting from this year the West Siberian holding plans a gradual increase in oil and gas production. What reinforces such intentions?
— Growth is already underway: in seven months, the collective produced about 50 thousand tons of oil plus - more than in the same period of 2011. And we plan to complete 2012 with confident stability and moderate growth. As they say, stability is a sign of mastery. Still maintaining a high level of production allows not only the development and drilling of wells in new areas but also the development of previously unused productive strata of deposits that have been in operation for more than a decade. Innovative drilling methods allowed to reach the horizons that were inaccessible a few years ago.
— Growing reserves is an important component of the development strategy of LUKOIL-Western Siberia. And first of all, this is facilitated by licenses for the development of new areas. How many are purchased in 2011? And what are the plans, in particular, for the Imilorsky license area, whose reserves are huge?
— In 2011, five new license areas were acquired. All of them in Yugra. 2D seismic surveys have already been carried out on Imilor, seismic 3D has also been completed and will continue in the North Vatyegansky area, and an exploration well has been drilled there. At Martalerovo, North-Eguryakhsky-1 and North-Eguryakhsky-2 this winter we will conduct a 3D seismic survey with a single field in an area of 600 square meters.
In 2012, we plan to acquire licenses for ten new areas. The most striking of them is Imilorsky. The auction will take place at the end of this year, most likely in December. And LUKOIL is preparing for it. The recoverable reserves at Imilor are estimated at 195 million tons of liquid hydrocarbons. But it is also of interest to the Company because it is located not far from the Tevlinsko-Russkinskoye field, where the entire infrastructure is already in place - oil-gathering, power grids, an oil metering station, and therefore the cost of area development will be minimal. So we will actively struggle for Imilor.
Natural Gas Territory
— A significant role in achieving the identified strategy is assigned to the development of the fields of the Bolshekhetskaya Depression. What progress has been achieved, and what is the future?
— The Bolshekhetskaya Depression is the future of the Company. Today we are actively working in this region of the YaNAO. Last year, 8.3 billion cubic meters of gas were produced - this is 90% of the natural gas produced by LUKOIL in Russia. And this is from Nakhodkinskoye field alone - it was put in operation in 2005, now there are 62 wells. The launch of the Pyakyakhinskoye is scheduled for 2016, and in 2020, the Khalmerpayutinskoye fields. To deliver products from there, the construction of two sections of the main gas pipeline to Nakhodka is underway. In total, in 2011-2012 we will lay about 200 kilometers of the pipeline. To maintain the optimum gas pressure during transportation, the head compressor station at Nakhodka is being built. At the first stage, at the end of this year, we will commission five gas pumping units with gas turbine engines, at the second - two more will be added to them. With the startup of the first train, the GCS capacity will be 18 billion, with the launch of the entire process chain - 27 billion cubic meters per year. It is in this volume that we plan to extract natural gas in the Bolshekhetskaya Depression by 2025. In addition, by the year 2022 about 6 million tons of oil and gas condensate will be produced there.
We associate the nearest growth prospects with the commissioning of the Pyakyakhinskoye field with an annual gas production volume of 4.5 billion cubic meters, and two million tons for liquid hydrocarbons. 13 wells were drilled there, geological exploration is underway. Recently, the drilling of the deepest well in the LUKOIL-Western Siberia well stock has been completed - No. 2011, its depth is almost five thousand meters. Right now testing of promising objects is being carried out, depending on the results we will be able to study the Jurassic layer, and find out its productivity. This will allow us to properly plan further development of the Pyakyakhinskoye field and, in general, see the prospects for developing the Bolshekhetskaya Depression.
— “LUKOIL-Western Siberia”, as far as we know, led the drilling of this deep well as a team with leading foreign oilfield services companies, is that right?
— Yes, Baker Hughes, Schlumberger, Eriell Group specialists helped us - they offered new design solutions and modern drilling technologies. We have been working with these companies for years, as well as with Halliburton, Weatherford. They are mainly engaged in support of the drilling of horizontal wells and are actively involved in projects for the development of innovative PNP technologies. Flow rates keep improving
— What modern methods of enhanced oil recovery and new technologies are used today in the fields of the West Siberian holding?
— It's hard to list everything. Last year, in the framework of pilot projects, we conducted 525 ops with 32 technologies. One of the most effective is the drilling of horizontal wells with multi-zone hydraulic fracturing. In 2011, we commissioned 148, the average oil increment for each well was more than 50 tons. This year we continue to work actively in this area - we have already drilled 72 wells and are extracting 50-52 tons of oil from each.
And we try to increase the number of zones with interval fracturing. Recently, a maximum of five packers were installed in a horizontal section, this year, as part of pilot work, two wells were drilled with 8-zone hydraulic fracturing. The Langepas well has an excellent flow rate - 90 tons per day, the Pokachevskaya was just launched, today it produces 35 tons, but the well has not yet reached a stable mode of operation. We were the first in LUKOIL to use multi-zone hydraulic fracturing in sidetracks. At Tevlin, such a well has been working for two months, producing 45-50 tons per day. This year we will drill about 14 wells using this technology and hope for a good result. A double-bore well is being drilled as part of the pilot project. The company already has such wells, but here, in Western Siberia, it is the first.
The plasma-pulse treatment of the reservoir proved to be productive - like the multi-zone hydraulic fracturing, it was recommended by our specialists for commercial application at the holding’s enterprises. 2-4 times increase in the flow rates by under-balanced drilling of horizontal wells. Among the new topics are the commingling (simultaneous-separate production from layers) and CI (simultaneous-separate injection), which allow the drilling of multi-layer deposits to work not with one, but with several productive layers, and this significantly reduces the cost of drilling and servicing of wells. Experimental pilot works are continuing on such innovative technologies as the drilling of horizontal wells with oil-based solutions (without aeration), highly inhibited drilling mud, etc. A great help in the development of innovative technologies was the creation in the West Siberian holding of a Center for support of drilling.
Geological specialists observe online how the drilling process is going on and can stop the process at any time if deviations from the project have occurred. Excellent Center and the experts are good. Many companies that come to us for the exchange of experience, have adopted this idea.
The big role of small energy generators
— Today, the Company is building a number of new power generation facilities. Will the enterprises be able to overcome the shortage of electricity with their input?
— The problem of shortage of electric power capacity appeared several years ago, as it was a deterrent in increasing oil production. Therefore, we began to build power plants at the fields. Today there is no shortage of electricity in the Company as a whole. Nine gas piston and gas turbine power plants were commissioned, they generate more than 1.2 billion kW/h per year. And what is also important, the cost of our own electricity is lower than that for power received from external networks by 15% in 2011. By 2014, with the commissioning of three more power plants, which are under construction at the Pokachevsky, Povkhovsky fields and the Nakhodka gas field, the Company's energy capacities will increase to almost 1.8 billion kWh per year. Nearly 450 million cubic meters of associated petroleum gas will be used at our own generation facilities.
— A project on energy-saving technologies is being successfully implemented in Pokachevneftegaz. When will it go beyond the framework of this division, and energy efficient workshops will appear in Kogalym, Uray, Langepas, at Yamal?
— Energy efficiency is one of the key issues. It is so significant that 4 years ago a new business sector, Electric Power Industry, was created in LUKOIL. The company’s Pokachevneftegaz became the Company's pilot site for introducing innovative, energy-intensive equipment with high efficiency. Recently, an automated system for technical metering of electricity has been introduced there, the stock of CPS pumps has been replaced with Sulzer units with higher efficiency and time to failure, electric centrifugal pumps with valve engines equipped with smart control stations are being introduced. And this work is ongoing not only in the Pokachevneftegaz division but also in other enterprises. The same Sulzer pumps, for example, are installed at the Kogalym Central pumping station. Energy efficient technologies, equipment are being introduced everywhere. Quite recently, ten stations have been used at the wells equipped with sucker-rod pumps, control stations with a frequency converter - at Kogalymneftegaz fields.
Fit for purpose
— Since the beginning of the year, new requirements for the utilization of associated petroleum gas have been in force in Russia. How does this affect “LUKOIL Western Siberia”?
— We have come to grips with the use of associated petroleum gas back in 2005, having developed a program of actions until 2010. And we began to build power plants and booster compressor stations, introduced modern gas metering devices in the fields, and modernized the flare equipment. Under the program, investments amounted to 10 billion rubles, 42 facilities were built. As a result, by 2011 the level of gas utilization exceeded 95% in four company associations. Urayneftegaz fell behind all of them - newly licensed areas were transferred to this company, where there was no gas collection system. In record-breaking time, we built gas compressor stations at the Lovinsky and Severodanilovsky fields, gas piston power plants on Eastern Tolum and Severnaya Danilovka, gas turbine power plants on the Krasnoleninsky field, laid the required gas pipelines. At present, this program has been completed, the level of utilization of APG in Urayneftegaz has exceeded 95%.
In the near future, the reconstruction of the Lokosovsky gas processing plant, which receives associated petroleum gas from the fields of the Langepassky, Pokachevsky and Kogalym regions. It was built in the eighties near Langepas, and at the beginning of the two thousandths, LGPZ was acquired by LUKOIL in order to create a plant for processing of light hydrocarbons on its base. The plant and the booster station were reconstructed, a commodity park was built with a loading ramp for shipping broad fraction of light hydrocarbons. Now we are planning a large-scale reconstruction of the plant - with the introduction of advanced technologies and an increase in APG processing capacity. We have defended the project at the Company discussion board, protocols were signed, a tender will be held this year, then the contractor will be determined. We will invest a lot in this large-scale project. But the costs are worth it. Drilling volumes are increasing, oil production is increasing, which means there will be more associated gas. For its processing, we need high-tech production, which will increase the production of NGL, dry stripped gas, stable gasoline, and technical propane.
Small business in the oil industry
— Recently, at a meeting with the governor of Yugra Natalia Komarova, small business representatives expressed a desire to provide services to oil and gas companies that operate in the Khanty-Mansiysk Autonomous Okrug. How are relations between the West Siberian holding and small enterprises developing? What opportunities are available for them?
— Small businesses are actively working in the overhaul of oilfield facilities, in the reconstruction of pipelines. Among them are very small firms that can handle small amounts of work. And there are enterprises whose capacities allow developing large-scale projects. A company from Surgut operates there, from Nizhnevartovsk and Tyumen too. The doors are open to all. Everything is transparent with us, we hold open tenders. You can go to the LUKOIL-Western Siberia website, see which tenders will be held, and take part in them.
— And the quality of work of small enterprises today - is it at the required level?
— Experienced specialists work in the tender commission of the holding. A careless contractor simply will not pass pre-qualification, respectively, and will not work with us.
Preparing the leaders
— Since you are talking about staff, here is a question. By 2013, the pilot project "Leader" will acquire a firm shape. You've already created several offices in the structure of the holding. What else is underway?
— We have been working for two years under the “Leader” project. Its main task is to reduce production costs, to reduce duplicate functions.
The number of employees will not decrease, the wage fund remains at the same level. We simply restructure the services in such a way as to reduce the time taken to make a decision on a particular issue and to pay more attention to new technologies, production development issues.
— Could such a centralization become an obstacle for the recruitment of young specialists this year - graduates of higher educational institutions and technical schools?
— The number of employees does not decrease, just the opposite. Because every year we commission more than 500 wells, respectively, they give new jobs. Every year more than 100 young specialists join the enterprises of the Company. We have signed an agreement with the leading oil universities of the country - in Moscow, Ufa, Tyumen. And 90% of graduates who come to us are from these universities. There is a program for working with young specialists, there is a Collective Agreement, targeted programs, mentors are assigned - the guys do not get unattended. In the course of our work, we offer the training not only in Russia but also abroad. So the young staff in the West Siberian holding feels comfortable. Yes, it gets hard ... Siberia, difficult climatic conditions. But there are good prospects, interesting work, many opportunities for self-realization.
Company's regions
— Sergey Alekseevich, as a deputy of the Okrug Duma, what is your guiding light when making decisions?
— I have been living in Western Siberia for a long time, so I understand well that the work of deputies, the authorities and the laws and decisions they adopt should be aimed primarily at improving the well-being of people who live and work in our difficult northern region. It is impossible to solve problems individually, in any case, it is a collective work. Today, voters report many social issues related to kindergartens, educational institutions, housing, and health care. Ugra Duma is actively working in these areas, district programs are being adopted, and they will definitely yield results. Parliamentary activity is interesting in a way that you can make your contribution to the preparation of the draft law, which will be useful for people.
— It is clear that it’s unrealistic to solve the problems of everyone without exception who is addressing you. Still, how many people do you manage to help to?
— you can always find leverage to solve any problem. Most of the issues addressed by voters, can be solved.
— LUKOIL radically changed the looks of our region. Will the effectiveness of cooperation between the oil company and the Government of Ugra keep increasing?
— Each year, LUKOIL participates in social projects and charitable programs not only in Ugra but also in the Yamal-Nenets Autonomous District. In 2012, the Company will spend more than a half billion rubles on their implementation in two autonomous districts. Last year about 1 billion 360 million rubles were spent for these purposes. So there is a slight increase in social investment, as well as in oil production. Together with the district authorities, we build houses, kindergartens, sports, educational, cultural, medical institutions in cities, urban-type settlements, indigenous settlements. We are fully fulfilling our obligations to representatives of small indigenous peoples of the North. We help to implement socially significant projects within the framework of the Strategy for Success contest. We support elderly people and young talents, creative teams and public organizations, athletes and people with disabilities. And I can say for sure - we take part in all these programs with pleasure.
We live and work in these regions, which means we are responsible for their development.