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Gazprom Neft R&D Center to Set Up Assembly Line for Innovations Implementation

Mars Magnavievich KhasanovInterview with Mars Magnavievich Khasanov, General Director of Gazpromneft NTC

«Oil&Gas Eurasia» (open in new window)

Information on the day-to-day operations of the research centers of major Russian oil companies rarely appears on the pages of industry journals. OGE tried to redress the balance. Mars Magnavievich Khasanov, General Director of Gazpromneft NTC, gave his first interview since taking office in December 2011.

— Mars Magnavievich, please, tell us what is the purpose of the R&D Center?

— The task of Gazpromneft NTC (Gazprom Neft R&D Center) lies in scientific and technical support for such business processes as exploration, upstream, field development, drilling, equipment selection; ensuring full utilization of the wells’ potential during their operation, development and selection of the latest new-generation technologies that increase the oil recovery factor. Another goal is to control the efficiency and to optimize operating and capital costs. For new technologies, the R&D Center is often both the tool and the design office for the creation of an “assembly line” with regard to technology implementation, assessment, ranking of technology- related challenges, and controlled introduction of technologies into production via projects.

— How old is the Center?

— Gazpromneft NTC celebrates its 5-year anniversary this November. The center is actually a successor to Gazprom Neft’s R&D Department. At the time of founding, the R&D Center was organized along three strategic directions: geology and exploration, upstream design and monitoring, and engineering and technological project support. It started operating in Moscow in the corporate headquarters of Gazprom Neft, but in the spring of 2008, the head office of Gazpromneft NTC moved to St. Petersburg. The Center also has separate departments in Moscow, Tyumen and Noyabrsk.

— What new technologies has the Center developed for maturing fields in Russia?

— To boost the efficiency for current assets, increase the oil recovery factor and reduce the cost of oil production, we introduced the ERA Programme (“Electronic Research of Assets”), a set of computer technologies for controlling the upstream production process. Between 2013–2015, several technologies will be implemented within this programme, such as the smart selection of segments and wells for geological and technical actions, selection of filtration flow technology, as well as increasing the production capacity of the wells. This will reduce the rate of production decline, and simultaneously boost the efficiency of geological and technical measures by 20 percent, thus ensuring up to 6 million tons per year of extra oil by 2020.

Our current assets include less productive zones with very low permeability; these currently stay idle because of the very low profitability. At such zones we drill, for example, multi-stage horizontal wells (with five to seven fractures per 700-1,000-meter horizontal well). This is the most effective method for developing unproductive, low-permeability and low-yield reservoirs. The volume of horizontal, branched, multicore, multi-directional wells is on the rise in the company. Sometimes the wells have to be drilled with fine precision, horizontally up to three meters wide. To ensure such high-precision drilling, we established the Geosteering Center. With remote online access, rotary systems and geosteering, our specialists use the field model to control the drilling process online in near-real time or per-hour mode. With the application of new drilling technologies, efficiency of installing a well in the reservoir grows from 60 to 85-90 percent, and the drilling rate by 10 percent. Similar R&D centers exist in many foreign companies, now we have it, too.

Overall, the company’s technology portfolio is divided into three groups (1 — enhancing the productivity of current assets; 2 — developing difficult reserves; 3 — implementing breakthrough potential), depending on the tasks that need to be addressed. All the promising fields of the company (which by 2020 must produce about 50 percent of total production) provide new technological challenges.

We estimate that even at the already-producing fields of the company, implementing cutting-edge technologies could add 700-950 million tons of oil production. By 2020, applying these technologies could help our company reach up to 35 percent of the planned production of 100 million tons of oil equivalent.

— It is often said that the industry is short of qualified personnel, experts of 30-40 years of age, and that there is no succession.

— Yes, we do feel this and we study the problem closely. Every half-year there is a new project, and it needs scientific and engineering support. That is why retaining students and graduates who recently interned with us is paramount for forming a talented team. This is why we develop our cooperation with universities. For example, this year, a lab was created in the St. Petersburg State Mining University, where graduates work on our projects, among others. A new department of geology of hydrocarbon systems, recently opened in the Gubkin’s State Oil and Gas University, was jointly organized by the university and Gazpromneft NTC. The department prepares the MSc personnel for the oil and gas industry. In June 2012, the first 11 Masters graduated — all of them are now employed in leading oil and gas companies.

In Moscow Institute of Physics and Technology, we opened the “Petroleum Engineering” specialization. By the way, being an oil university graduate is not obligatory for fetching a job at an oil company’s R&D center. Modern oil engineering is so hi-tech that it requires in-depth knowledge of physics, math, chemistry and materials. One of the objectives of the Center is to accept young people from other (related) branches, switching them to the oil industry.

— To what extent do the projects of the Center reflect international science trends?

— Maybe this sounds immodest, but I am living with the idea that we are at the cutting edge of petroleum engineering. Perhaps, in some ways we’re behind, in others ahead, but I believe that our level does reflect global developments. In general, we see our shortcomings and develop appropriate programs for improvement.

— To evaluate your own level you must compare it with the world. Do you work with international organizations?

— Thirty employees of the Center are SPE members. In July, the Northwestern section of SPE was established in St. Petersburg on the basis of Gazprom Neft. Experts of the Center attend all SPE conferences in Russia and some conferences abroad. We work closely with Shell R&D center; since we run joint projects with TNK-BP, we also work closely with the Tyumen Petroleum Research Center.

— In what fields is Russian know-how sufficiently hitech, and where do we need to learn from colleagues abroad?

— In my opinion, today the oil companies have access to all technologies. There are many servicing firms on the market that are engaged in R&D and generate new technologies, there is a huge number of equipment: drilling rigs, platforms, etc. In today’s world, the competitive edge of an oil company lies in its ability to design and apply technologies to constantly improve it’s own know-how, rather than in the proprietary technologies. Successful players differ from the others because they use the technologies correctly, use 100 percent of the potential offered by the technologies, and change them in due time. We believe that in the medium-term we should be smart buyers and move quickly but consistently, in particular with regard to technology.

— But after all, being a smart buyer is not easy.

— We are working in this direction; we want to set up the “assembly line” for innovations. And that means the technological management system, or TMS.

— What do you need to make its operation more efficient?

— First, we need to develop and enhance the system itself as a project for monitoring, searching for and implementing technologies. We must set up a project office, corporate culture, to ensure correct implementation and full utilization of technologies. Another important aspect is the system of technological learning. Advanced technologies always have huge added masses. We do have such a system of technological learning; we have a course of lectures in the R&D Center, visit production and foreign facilities. Also in 2012, on the basis of Gazprom Neft’s subsidiaries four regional expertise centers were created. Their purpose is to prepare and implement programs for testing new technologies, as well as to ensure the exchange of experience with other companies in such areas as finalizing of the fields using the hole branching technologies (Gazpromneft-Noyabrskneftegaz (open in new window)), development of low permeability reservoirs (Gazpromneft-Khantos (open in new window)), development of fractured reservoirs (Gazpromneft-Vostok (open in new window)), efficient operation of the pipelines (Muravlenkovskneft (open in new window) branch of Gazpromneft-Noyabrskneftegaz). It is also important to engage a knowledge management system and to expand a technology bank.

— What is the technology bank?

— The work is just beginning. We see this as a structured database of best technological solutions, ideas, algorithms, links to software, instructions and standards that define how to work with technologies. Currently, as a pilot project, experts of our Tyumen branch are creating a database of technology solutions for installing the surface facilities. Another key direction is providing instructions, templates, guidelines that explain where, how and what technology must be used. It is not right that we approach each field as a new object, start modelling and the research — this requires at least two-three years to establish what technology should be used. We need such generalizations, which I call the decision-making templates for the use of technology. This is a kind of smart product, on entering the properties of a field (permeability, thickness, presence of gas cap, oil viscosity, etc.). It results in a field development solution. It is very important to get this initial solution that is like an advice of highly experienced specialist: always ensures that we stay on the right track.

— What technologies and methods do you focus on to manage production efficiently?

— In the field of hydrocarbon production, we pay great attention to issues of automation and computerization of the technologic processes. One of such high-tech projects is the intelligent adaptive control of low-yield wells. In the Adaptive Well Control (AWC) mode, lowyield wells are equipped with high-performance pump units turned on periodically for short periods. Precise options are selected by experts using control algorithm developed by the company. As a result, oil production grows 10-15 percent while power consumption is reduced by 30-40 percent. By 2016, this technology will be implemented on 100 percent of suitable wells, which is 15 percent of equipped well stock. The expected economic effect is over 500 million rubles a year.

— How interested is Gazprom Neft in oil production from shale rock and tight reservoirs?

— In Russia, similar properties to shale deposits are present in the Bazhenov Formation. According to our estimates, about 150 million tons of such oil is in our zone of presence, though the success of foreign oil companies in this field have further boosted our interest. We started with a pilot project that will be run on the basis of Salym Petroleum Development (SPD), our joint venture with Shell. Experts at the R&D Center together with SPD specialists are researching geologic modeling, geo-mechanical properties of the layers, search for so-called “sweet spots” for drilling the first well. This year, we will hone the technology and will be ready to start drilling horizontal multiple-fracture wells. We hope to master this technology and to replicate it in the future.

— Most developments of the Center are focused on the fastest returns. Is there an option to engage in theoretical study?

— I do not believe in the so-called “pure science” in petroleum engineering. Moreover, all projects, especially the new projects are the source of new challenges, intensifier for both technologies and people. I personally witnessed how the young guys changed and opened up from completely new sides when they were given a particular project. A tough project, too — the one that had to be done in a short time, within three weeks rather than three years, for example. Oil technologies cannot be developed without diligent running of the groundwork.