LUKOIL has recently been awarded a 5% stake in the Ghasha ultra-sour gas concession. What resources and expertise do you anticipate Lukoil will bring to this project?
LUKOIL is the first Russian energy company to enter Abu Dhabi's upstream sector. In Russia, our company holds leading positions in offshore development. Our benchmark project is the North Caspian integrated production complex, consisting of 10 fields and 10 prospective structures with the total recoverable reserves of 7 bln barrels of oil equivalent. In terms of technical complexity, the Caspian project is one of the most advanced in Russia. The company owned institute (LUKOIL Engineering) engineers this development. An Integrated Operations Center allows us to perform real-time control of production and this significantly increases operational efficiency. Moreover, LUKOIL has very strict environmental policies. All our offshore projects follow the Zero Discharge principle. We are ready to share our expertise in the fields of integrated offshore developments, digitalization and environmental protection with our business partners.
What are some of the synergies that you expect to be created between LUKOIL and the other concession holders; Eni, Wintershall Dea, and OMV across the various shared operating environments?
The Ghasha ultra-sour gas project is known for its challenging operating conditions. To ensure smooth synergy and positive outcomes, effective communication is necessary. I believe that for streamlined cooperation with the concession's partners and with ADNOC, it is beneficial to have a "think pot" for digesting solutions and articulating ideas. The success of the Ghasha project ultimately relies on the professionalism and mutual decision making from all the concession holders. Furthermore, I think that working on such challenging and sophisticated projects is a great opportunity to share the best practices of corporate culture.
As the global Oil & Gas sector actively seeks to create better cost-effectiveness and more sustainable production. What are some of the ways that Lukoil aims to drive efficiencies, reduce CapEx, and optimize assets across its operations?
The company approved a ten-year strategic program in 2017. It is primarily targeted at the efficiency improvements and growth in financial results. In the Upstream sector, we focus on the assets with high profitability and high growth potential. For existing assets, our main aims are to maintain production rates and improve operational efficiency. The main instruments here are: digitalization, reducing losses of any kind, increasing oil recovery, and saving drilling and completion costs etc.
The implementation of digitization, big data, automation, and the Internet of Things, is driving evolution and change across the Oil & Gas sector in the Middle East and beyond. What innovative technologies are you currently exploring and deploying across your operations?
LUKOIL is a recognized leader in Russia in integrated production modelling. In 2019, the company won the ComNews Award for the Best IT Project for its digital production system in Western Siberia. A key question that may be asked - what is the difference between LUKOIL's setup compared to our competitors? If we cast our mind back, it was not digitalization, but comprehensive modelling of the entire process in production operations, which was invented in the North Sea in 1990s. For Russian companies that operate onshore with significant well stock, it can be more challenging to establish a similar approach. We must follow each given well to ensure monitoring throughout development. We created a system for these processes; at present, this has been deployed in various regions in Russia. The approach, known as a Choke Model, is a standard that is followed by many organizations across diverse industries. We look for an opportunity to save in every aspect of the production chain. Energy efficiency is one such option. In this respect, I have to mention our latest innovative product - Permanent Magnet Motor for Electric Submersible Pumps. Comparing to asynchronous electric motors, PMM has a smaller size, higher efficiency factor (up to 92%) and lower energy consumption (25% saving in electricity costs). It is made of heat resistant materials that allows it to be used for production during well thermal stimulation. LUKOIL is already offering this motor to the Middle East market.
Looking ahead, in terms of scale and growth opportunity, what are your expectations for Abu Dhabi's' oil and gas sector in the coming years?
It is difficult to predict the future; however, we are optimistic regarding the Ghasha concession's development and Abu Dhabi's energy sector as a whole. With a strategic geographic location, high energy potential and an innovative leadership, Abu Dhabi's oil & gas industry has all the necessary components for future growth.