Experts Discuss the Creation of an Oil and Gas Sector Development Strategy

12 august 2015

Together with the National Association of Oil and Gas Service, the Analytical Centre held a round-table conference titled “Prospects of Development of National Oil and Gas Service Sector” in the framework of which the experts discussed possibilities of providing oil and gas companies with services offered by Russian companies in the context of varying economic and technological environment, along with examining the major constraints on the development of domestic companies operating in the market of oil and gas services and the required measures of support. The participants went further to discuss the possibility of developing economical sound instruments to be used by the government to prompt oil and gas producers to use services of Russian companies.

In his opening address the Deputy Director of the Department for Administrative and Legislative Affairs of the Ministry of Energy of the Russian Federation Sergey Abyshev noted that this topic is extremely relevant for today’s economic situation, which is why identifying the current status of the sector and the existing problems is essential in the framework of the round-table discussion.

In his turn, Viktor Khaikov, the President of the National Association of Oil and Gas Service, highlighted the major problems faced by service companies – the extended payment periods. “The period over which companies receive payment from customers is extremely stretched in time. This hinders the effective development of these companies and their prospects of competing with foreign rivals. The payment period for some companies may reach 120 days or more. Borrowing would, however, lead to a rise in the production cost,” the expert concluded. He upholds the solution lies in working out measures in limiting payment period. “With the current sanctions in place, what we need is to boost domestic service and support domestic producers,” he believes.

Service companies that are already in the market are not really updated on the latest achievements of R&D organizations. What we propose is to create a technological platform that would serve as a communication platform providing interaction between new concepts from the business, science and government sectors

Kristof Yakubson, Deputy Director of the Oil and Gas Institute of the Russian Academy of Sciences

“We should not forget about university curricula altogether, considering that focused training of professionals for the oil and gas industry is still not offered there. There is no curriculum course that would be precisely in line with the modern-day requirements and train skilled professionals,” said Dmitry Shulman, the Integra Management Executive Director. The expert is convinced that the task of rectifying this situation should be on the agenda of the Russian Ministry of Energy.

The Deputy Director of the Oil and Gas Institute of the Russian Academy of Sciences Kristof Yakubson believes that fundamental research is essential for technological development. “This is our goal, something we are striving for, yet our constant hitch lies in bringing these concepts to technological implementation,” the expert stated, naming the limited number of available mechanisms promoting development as the main reason behind this. “No service company will ever begin to use a technology that has not been tested. We cannot do this because government-funded organizations are not allowed to participate in tenders or take out loans, while their working assets are simply not enough. For government-funded academic research and educational organizations this option is closed. Other mechanisms need to be sought here,” urged Mr. Yakubson. For example, some specific situations may be remedied by help from the government in the form of preferential loans, but there is another option too, and that is to create testing grounds where the proposed new technologies could be tested. “We have concepts of such testing grounds today, yet their implementation is hindered by meager funding and obstacles that have to do with use of intellectual property,” the expert reaffirmed.

Mr. Yakubson furthermore called the attention to another gap in the sector – the communication problem. “Service companies that are already in the market are not really updated on the latest achievements of R&D organizations,” the expert explained. He believes that a communication platform should be created to enable developers of innovative technologies to present their products every once in a while. “What we propose is to create a technological platform that would serve as a communication platform providing interaction between new concepts from the business, science and government sectors,” Mr. Yakubson pointed out, adding that this plan requires practical work to materialize.

The conference participants suggested developing an oil and gas sector development strategy.

Agenda