The Gazprom Neft Board of Directors considers priority projects and tools in upstream technological development

27 October 2017 — the Gazprom Neft Board of Directors has reviewed information on priority projects and tools for technological development in exploration and production.

Managing innovation within the Upstream Division has, since 2014, been based around Gazprom Neft’s Technology Strategy. Eighty-four projects are currently being implemented under this strategy, across nine technological areas, including enhanced oil recovery (EOR), development of unconventional reserves, oil-leg reservoirs, oilfields with carbonate and fractured reservoirs. Key competencies in all areas are concentrated in the Gazprom Neft Science and Technology Centre, which provides specialist project support. The total effect of implementing projects under the Technological Strategy is expected to result in more than 20 million tonnes of additional production and 100 million tonnes of additional reserves under development by 2025 — comparable to commissioning a major new field.

Thus far Gazprom Neft has put in place unique competencies in engineering at complex facilities and the management of major projects, as well as establishing a system for implementing cutting-edge solutions. The development of technologies including multi-stage horizontal fracking, construction of multilateral wells, underbalanced reservoir drilling, water flooding, and “green seismic” are allowing the company to secure additional production, reduce costs, and shorten lead-times in key operations, as well as improving workplace and environmental safety. Bringing ever more complex reserves into development is ensuring the long-term stability of the company’s business even under a volatile macroeconomic environment.

The implementation of one of the key projects in the company’s long-term strategy for technological development concerns creating a range of technologies for developing reserves at the Bazhenov formation — directed at bringing new resources (of up to 760 million tonnes of oil) into production. Thus far, commercial oil flows have been obtained, the world’s first fracking simulator for the Bazhenov formation has been developed, and agreement has been secured from the Government of the Khanty-Mansiysk Autonomous Okrug to establish the Bazhenov Technology Centre — the first technological test site in the Russian Federation dedicated to the development of vital solutions. In the current context of international limitations and restrictions, the company is developing an extensive range of domestic technologies for developing the unconventional reserves of the Bazhenov formation: an initiative which, in 2017, was accorded national status — confirming its importance to both the industry and the state.

A further long-term objective in terms of technological development concerns the use of digital technologies. The company’s digital transformation in exploration and production is being undertaken across five key areas, aligned to key competencies — geology, design in field and infrastructure development, drilling, project management, and production management. Against a background of ever increasing complexity in geological features and rapid growth in the volumes of information available, demands on the exactitude and quality of specialist solutions are ever more stringent. The company sees considerable potential in utilising cutting-edge digital technologies including machine learning, predictive analysis and cognitive decision making.

In conjunction with various partners, Gazprom Neft is implementing a breakthrough project for the oil industry in information analysis and the development of geological solutions. This includes both the evolutionary development of existing production processes in geological prospecting and modelling (the development of specialist and predicative systems and intellectual advisors) together with an innovative solution for the development of a cognitive platform. The outcomes of this project will allow exponential efficiency improvements in developing geological solutions: data processing speeds will more than double.

Gazprom Neft has seen significant improvements in drilling efficiency in recent years: drivage efficiency is up 25 percent, while drilling times for horizontal wells are down 30 percent. By far the greatest potential for future efficiency gains lies in optimising well design in the early stages of project implementation. To which end, the company is developing digital well simulations that allow both well trajectories and appropriate technological solutions to be optimised. Together with its partners, Gazprom Neft is developing a predictive analysis tool which will offer the opportunity of determining optimum drilling practices, while preventing problems and complications. Managing projects in 3D is another promising technology which allows to combine all key stages of a field infrastructure project through the use of a digital model.

Gazprom Neft takes a pragmatic approach to developing and implementing new technologies, using commercially available technologies as tools for improving the company’s effectiveness and efficiency. At the same time, the company is, independently, developing a market for technologies, encouraging partners in developing new solutions and acting as an initial purchaser — the world’s first wireless seismic technology and the first domestic rotary controlled systems having been created on that basis. Unique solutions — such as predictive analysis tools — are being developed by the company in conjunction with domestic and international partners.

Alexander Dyukov, Chairman of the Management Board, Gazprom Neft, commented: “The company has achieved average production growth of 10 percent over the past 10 years. Return on invested capital (ROIC), moreover, stands at 12.5 percent — significantly above the industry average. To maintain that pace it is essential that we develop new oil-producing regions, bring new categories of reserves into production, maintain production at mature fields, and remain effective regardless of economic conditions. None of which is possible without implementing new and effective technologies — which is why technological development remains one of our overriding priorities in achieving our strategic objectives.”