The Catalyst of Profits

Oleg Belyavsky Interview with Oleg Belyavsky, Director of the Omsk Oil Refinery

Gazprom Magazine

— How would you define the current status of the refinery in the Russian oil industry?

— We are in a golden age of oil refining. We need to take advantage of the situation, to invest in development to build a strong foundation for the next years. 2011 saw the approval of the Omsk Oil Refinery Development Program till 2020. We are currently at the design stage of a development program for petrochemicals production. We’ve already defined that our first task will be to modernise the aromatic hydrocarbons processing complex.

— You headed the NIS refining block in Serbia for two years. How does working in Serbia differ from working in Russia?

— It is very different. After the NATO bombings the NIS plants were damaged, but they were restored using Western technology. As a result these enterprises are compact and efficient, with large tank farms. Whereas in Russia, as you have seen, we have a lot of space and interplant racks. Accordingly, the constant energy use makes it very expensive. The Serbs are very hard-working, but they have less experience than we do. At the same time, they are really open-minded.

— And what would you change here based on your Western experience?

— First and foremost, of course, I would implement elements of Western design engineering. It’s a fact that we need to revise, sooner rather than later, our approach to engineering. Investment projects in Russia are usually implemented traditionally: the client selects the project organisation, a team of contractors, equipment suppliers, etc. The Western format, which is called EPC/EPCM, is far more progressive. We practically never use this approach here, while the order portfolios of major Western players are dominated by all-inclusive services, with a much smaller proportion of particular services. From my own experience I can say that using EPC/EPCM scheme would reduce costs and allow us to operate more efficiently. This format means more control, not only over the financial aspects, but also over the timing of equipment delivery.

— And when do you intend start using this scheme?

— Here at the Omsk refinery we want to make the changeover in the next year. But in general, I’m sure it will be implemented throughout Russia over the next five years.

— And what, in turn, did you take to Serbia from your Russian experience?

— Accounting, analysis procedures, etc. NIS had no regulations, no emergency plans. They just had a few design notes, and we felt that this was wrong. People need to understand their responsibilities, this gives more efficiency. A lot was moved over to outsourcing, control procedures were established and losses were reduced. Control procedures are essential. We brought over specialists from Omsk and other regions, who brought their expertise in maintaining business processes.

— Is the Omsk Refinery also developing outsourcing?

— Yes, in Omsk too, a number of service units have been brought out from the company or outsourced. In addition, some units are now working as subsidiaries. For example, the Maintenance Plant, which provides repair services for pumps and compressors, and moulding. This plant now works, not only for the Omsk Refinery, but also for enterprises in other regions. Or Neftekhimremont, which specialises in repairs to installations, valves, heat exchangers, etc. It is almost completely focused on our refinery. Avtomatika-Servis maintains our instrumentation and the accounting system.

— Are you planning to increase the number of subsidiaries?

— In 2012 we will be outsourcing our sanitary-hygenic laboratory and rail service. Most importantly, we are concidering the possibility of establishing a subsidiary based on the catalyst production facility. The Omsk Refinery is the only one in Russia producing catalysts, and we are capable of providing other enterprises with all their catalytic cracking needs. Our catalysts are of a very high quality and we feel that the company will be profitable.