The Leading Event for the Oil & Gas Sector in the Russian Far East

24 - 26 September 2019

“Stolitsa” Business Centre

Interview with Alexander Korobkov, General Director of Gazpromneft-Sakhalin

Published on 16 August 2018 by Julia Sadieva

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– Mr. Korobkov, could you please share some news about the Neptune, your new field in the Ayashsky license block?

 

The prospecting well drilled by Gazpromneft-Sakhalin in the shelf of the Sea of Okhotsk last year confirmed the presence of oil in the Ayashsky formation, which our company is authorized to explore and develop under the license obtained in early 2017. It also showed that the deposit has an influx of commercial oil and conclusively proved that a new promising oil deposit has been discovered in the Far East.

 

The in-place reserves of the Neptune field exceed 250 million TOE. However, our experts still have to analyse the entire body of information obtained during the drilling operations and make final conclusions based on the results of this analysis.

 

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– Were there any specific features or technological challenges that had to be taken into account when constructing the well? What kind of innovations did you use in the process?

 

The regional conditions are not as challenging as those in the Arctic, so the drilling schedule was not as intense as at some other projects. Still, this project had its own issues. One of the biggest troubles was the shallow gas. Shallow pockets of gas with a high formation pressure may cause drilling accidents at offshore field development projects. Accidental penetration of such pockets can lead to an uncontrolled discharge of formation fluids, i.e. a gas blowout, which is a frequent cause of complications when drilling offshore wells. The abnormally high formation pressure also required extreme caution in selecting the well design.

 

Since there were no existing wells in this area, office studies and prior experience of drilling technicians and geologists played a big part in this project. In order to avoid any accidents, we used a new hazard identification technique for shallow gas forecasting. We also decided to employ the riserless drilling method, which eventually helped us drill the first several hundred metres with minimum risk.

 

The usual practice is to use seawater as a drilling fluid when drilling wells for the surface casings at offshore fields. In this case, the rock is washed out of the well straight to the sea bottom. With the riserless method, you can start drilling with the drill mud that is supplied into the well from the platform via the drill pipes and then pumped out together with the slurry. This completely prevents the ingress of cuttings into the water. The cuttings are then exported to the shore and recycled. The riserless drilling method helps minimize the risks of wellbore collapse and improve the quality of cementing of the surface casing sections. It also helps prevent gas blowouts.

 

This project in the Ayashsky area was the first successful application of the riserless drilling method in Russia. Then again, the shallow gas challenge is not unique for Sakhalin: you will face it in the Gulf of Ob and in the Kara Sea – basically any place with potentially high gas content.

 

Riserless drilling was not the only innovative technique employed at the Neptune field. During the well tests, we used a wireless telemetry system for the online transmission of bottomhole parameters. This approach helped reduce the time of testing significantly and provided substantial savings.

 

Successful logistics solutions allowed us to increase the operational efficiency of the project. The supply depot at the port of Korsakov was basically built from scratch, but the more convenient location and smaller port terminal throughput than the alternatives allowed us to reduce costs and secure timely material support to the project.

 

– Is there an approximate date for the completion of geological exploration and the start of oil production? Have you identified future partners for Gazpromneft-Sakhalin in the joint commercial development of this oil field?

Based on the existing roadmaps, production at the Neptune field is to begin in 2025–2027. Still, it may happen that the first oil will come sooner than forecasted.

 Because offshore projects are typically cost-intensive and technically challenging, oil companies traditionally favour the idea of the partnership-based delivery of such projects, both to share the financial risks and to exchange experience and technologies. We are also looking at this opportunity today. Our potential partners in this project include both the companies that are already present in the region and those than might take interest in expanding their operations to a new region with the prospects for future development.

 At this time, several companies have shown interest in the project, but naming future partners right now would be a little premature.

 

– How are you planning to develop Russian innovations for oil and gas projects, import substitution and the localization of imported products? How effectively do you think this task is being handled in Russia, in general? And what do operators, the government and other market players have to do to support this initiative?


Thank you for this interesting and important question. A separate aspect of our company’s operations is maximizing Russia’s local content in our projects, which is secured, among other things, by implementing the import substitution programmes. We are currently working with equipment manufacturers to identify import substitution projects and developing terms of reference for a number of R&D projects to design new equipment prototypes.

Gazprom Neft fully understands the importance of existing offshore projects for the development of Russian industry. Russian industry today faces some technological challenges that are frequently associated with the development and commercialization of new unique products, which requires substantial background research, manufacturing efforts, government incentives and coordination with customers.

And we have already secured tangible success in this domain.

For example, we are working together with the Ministry of Industry and Trade of the Russian Federation and the Ministry of Energy of the Russian Federation to identify potential government support measures and formulate scenarios for the development and upgrade of production assets, as well as determine steps that might be taken to engineer commercial prototypes of domestic equipment. It is also worth noting that the amount of government support for import substitution programmes implemented by Gazprom Neft exceeded two billion roubles in 2016–2017. We expect that this year the Russian government will also be able to support domestic manufacturers with an equivalent amount through the import substitution programmes delivered in cooperation with Russian industry players.

Another aspect of note is the cooperation with design institutes. The focal point here is engineering of offshore oil and gas facilities and installations, as well as the development of hi-tech drilling and wellhead equipment for offshore applications.

Today, Gazprom Neft has more than 20 priority areas, for which the company is developing strategies for promoting the expansion of Russia-based manufacturing capabilities. Within these priority areas, we offer extensive support to Russian manufacturers in developing and commercializing new products and technologies.

Another scenario involves establishing joint enterprises and localizing the production and R&D capabilities of leading overseas manufacturers in Russia. These strategic areas include equipment for carrying out offshore seismic surveys, directional and horizontal drilling support, hi-tech well completion services, pumps and compressors for oil refining applications, catalysts for oil refining and petrochemical applications, etc.

 

– Sakhalin has always been at the forefront of Russia’s oil and gas industry, serving as a starting ground for innovations in oil and gas. What are your expectations about the future of this region?


As you said, Sakhalin has always been at the forefront of Russia’s oil and gas industry, and this is no coincidence.

Quite remarkably, the projects carried out in the Russian Far East – and in Sakhalin specifically – face challenging climate conditions on the one hand. On the other hand, these are innovative projects implemented with the use of state-of-the-art engineering and technological solutions. Suffice it to recall the first LNG plant commissioned in Sakhalin in 2009, the construction of unique gas pipelines under Gazprom’s Eastern Gas Program, the operation of Rosneft’s Berkut Oil Rig and the development of the Kirinskoye field (the only Russian offshore field right now where oil is produced using a subsea production module [SPM] with no platform or other surface facilities). I also take pride in mentioning that discovery of the Neptune field, one of the largest deposits found on the Sakhalin shelf in modern history, which was made by Gazprom Neft in 2017, has put a stamp in the history of operations in the area.

And I am confident that this trend will continue. Today, the oil and gas industry brings almost half of Russia’s consolidated revenue, largely defining the employment and income of the country’s population and, consequently, the amount of tax payments. We should also remember that up to 80% of all work on oil and gas projects fall to the share of so-called petroleum industry suppliers: service providers, construction, transportation, research and training companies, and many others, meaning that oil and gas projects have significant multiplier and complex-building effects.

Projects that are being implemented in Sakhalin will not only drive the growth of advanced offshore solutions, but will also promote a breakthrough in the development of industry and technologies in general.

I wish all of us new discoveries and nothing but success in offshore projects!

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