Development of oilfield services market: successful practice of Rosneft Oil Company

UDK: 658.562
DOI: 10.24887/0028-2448-2019-11-8-12
Key words: contractor, efficiency, oilfield services, rating, performance, system
Authors: A.S. Isakov (Rosneft Oil Company, RF, Moscow), E.M. Liron (Rosneft Oil Company, RF, Moscow), D.A. Lunin (Rosneft Oil Company, RF, Moscow), A.N. Khoroshev (Rosneft Oil Company, RF, Moscow)

The quality of oilfield services provided by contractors to mining companies directly affects their performance. Rosneft Oil Company purchases a large number of oilfield services in order to provide the planned level of hydrocarbon production. That’s why reliably built long-term customer-contractor relationships are the key to successful oil and gas production. Russian producing companies use different models of such relationships: some companies provide themselves with oilfield services; others purchase oilfield services from the outside market. However, given the volatility of hydrocarbon prices, even large international oilfield services companies do not always demonstrate financial and economic stability, which negatively affects the availability of high-quality contractors in the market in sufficient quantities. And the situation with Russian oilfield service contractors is even more critical. In order to protect itself on this side, Rosneft provides a large share of key oilfield services in addition to external contractors with internal services. Volume of internal services of different types grew up significantly in different regions during last five years. Therefore the company pays attention to internal service’s development. The problem of contractor effective performance benchmarking is relevant to all producing companies, especially to the big ones due to their activities in many regions. In particular, in order to improve the quality of internal services and control the quality of services of third-party contractors, a Contractor Efficiency Performance Management System (CEPM) was developed and introduced. The analysis of development Rosneft oilfield services demonstrates its effectiveness.

References

1. Samoylenko V., Business models of oilfield services and the efficiency of oil companies (In Russ.), Ekonomika i upravlenie: nauchno-prakticheskiy zhurnal, 2016, no. 4 (132), pp. 87–93.

2. Kozhevnikov A., Uilson E., Upravlenie podryadchikami v neftegazovoy otrasli Rossii kak faktor ekologicheskoy bezopasnosti (Contract management in the Russian oil and gas industry as a factor in environmental safety), Moscow: Publ. of WWF Russia, 2010.

3. Smirnov D.B., Improving governance mechanism sustainable development strategy at the enterprises of the oil complex (In Russ.), MIR = MIR (Modernization. Innovation. Research), 2016, V. 7, no. 1(25), pp. 41–47.

4. Five principles of the TNK-BP contracting philosophy (In Russ.), Ekspert Sibir', 2012, no. 42, URL: http://expert.ru/siberia/2012/42/pyat-printsipov-filosofii-kontraktovaniya-tnk-vr/

5. Tokarev A.N., Petroservice as a basis of innovative development in oil industry (In Russ.), Innovatsii i obrazovanie, 2014, no. 4, pp. 91-99.

6. Zorina S., Sample efficiency (In Russ.), Sibirskaya neft', 2018, no. 156, URL: https://www.gazprom-neft.ru/press-center/sibneft-online/archive/2018-november/2067580/

7. Line continuous improvement program: Two-year performance (In Russ.), URL: http://www.up-pro.ru/library/production_management/lean/liniya-itogi.html

8. Kivizhe G., Shirov O., Efficient organization of work with contractors (In Russ.), Vestnik McKinsey, 2013, no. 28, URL: http://www.vestnikmckinsey.ru/transport-infrastructure-and-logistics/ehffektivnaya-organizaciya-rabo...

9. Isakov A.S., Liron E.M., Contractor effective performance management system (In Russ.), Neftyanoe khozyaystvo = Oil Industry, 2019, no. 3, pp. 18–21.



The quality of oilfield services provided by contractors to mining companies directly affects their performance. Rosneft Oil Company purchases a large number of oilfield services in order to provide the planned level of hydrocarbon production. That’s why reliably built long-term customer-contractor relationships are the key to successful oil and gas production. Russian producing companies use different models of such relationships: some companies provide themselves with oilfield services; others purchase oilfield services from the outside market. However, given the volatility of hydrocarbon prices, even large international oilfield services companies do not always demonstrate financial and economic stability, which negatively affects the availability of high-quality contractors in the market in sufficient quantities. And the situation with Russian oilfield service contractors is even more critical. In order to protect itself on this side, Rosneft provides a large share of key oilfield services in addition to external contractors with internal services. Volume of internal services of different types grew up significantly in different regions during last five years. Therefore the company pays attention to internal service’s development. The problem of contractor effective performance benchmarking is relevant to all producing companies, especially to the big ones due to their activities in many regions. In particular, in order to improve the quality of internal services and control the quality of services of third-party contractors, a Contractor Efficiency Performance Management System (CEPM) was developed and introduced. The analysis of development Rosneft oilfield services demonstrates its effectiveness.

References

1. Samoylenko V., Business models of oilfield services and the efficiency of oil companies (In Russ.), Ekonomika i upravlenie: nauchno-prakticheskiy zhurnal, 2016, no. 4 (132), pp. 87–93.

2. Kozhevnikov A., Uilson E., Upravlenie podryadchikami v neftegazovoy otrasli Rossii kak faktor ekologicheskoy bezopasnosti (Contract management in the Russian oil and gas industry as a factor in environmental safety), Moscow: Publ. of WWF Russia, 2010.

3. Smirnov D.B., Improving governance mechanism sustainable development strategy at the enterprises of the oil complex (In Russ.), MIR = MIR (Modernization. Innovation. Research), 2016, V. 7, no. 1(25), pp. 41–47.

4. Five principles of the TNK-BP contracting philosophy (In Russ.), Ekspert Sibir', 2012, no. 42, URL: http://expert.ru/siberia/2012/42/pyat-printsipov-filosofii-kontraktovaniya-tnk-vr/

5. Tokarev A.N., Petroservice as a basis of innovative development in oil industry (In Russ.), Innovatsii i obrazovanie, 2014, no. 4, pp. 91-99.

6. Zorina S., Sample efficiency (In Russ.), Sibirskaya neft', 2018, no. 156, URL: https://www.gazprom-neft.ru/press-center/sibneft-online/archive/2018-november/2067580/

7. Line continuous improvement program: Two-year performance (In Russ.), URL: http://www.up-pro.ru/library/production_management/lean/liniya-itogi.html

8. Kivizhe G., Shirov O., Efficient organization of work with contractors (In Russ.), Vestnik McKinsey, 2013, no. 28, URL: http://www.vestnikmckinsey.ru/transport-infrastructure-and-logistics/ehffektivnaya-organizaciya-rabo...

9. Isakov A.S., Liron E.M., Contractor effective performance management system (In Russ.), Neftyanoe khozyaystvo = Oil Industry, 2019, no. 3, pp. 18–21.




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