LUKOIL has recently been awarded a 5% stake in the Ghasha ultra-sour gas concession. What resources and expertise will Lukoil 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 developments. Our benchmark project is the North Caspian integrated production complex, which consists of 10 fields and 10 prospective structures with total recoverable reserves of 7 billion 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 also allows us to perform real-time control of production and significantly increases operational efficiency. Besides, LUKOIL has strict environmental policies. All our offshore projects follow the Zero Discharge principle. We are ready to share the company's expertise in the fields of integrated offshore developments, digitalization, and environmental protection with our business partners.
What are some of the synergies you expect to be created between LUKOIL and other concession holders, Eni, Wintershall Dea, and OMV, across 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 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. Moreover, I think that work on such challenging and sophisticated project is a great opportunity to share the best patterns of corporate culture.
As the global oil and gas sector seeks to create better cost-effectiveness and more sustainable production, how will Lukoil drive efficiencies, reduce CapEx, and optimize assets across its operations?
The company approved a 10-year strategic program in 2017 primarily targeted at efficiency improvements and growth in financial results. In the upstream sector, we focus on 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 all kinds, increasing oil recovery, and saving on drilling and completion costs etc.
The implementation of digitization, big data, automation, and the IoTs are driving evolution across the sector. What innovations are you 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 West Siberia. A key question that can be asked is: what is the difference between LUKOIL's setup compared to our competitors? Let's think back. Initially, it was not digitalization, but a comprehensive model of processing production operations, which was invented in the North Sea in 1990s. For Russian companies that operate onshore with significant well stocks, 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 seek opportunities to save in every aspect of the production chain. Energy efficiency is one of such options. In this respect, our latest innovative product, the permanent magnet motor for electric submersible pumps. Comparing this 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 using it for production during well-thermal stimulation. LUKOIL is already offering this motor to the Middle East market.