The flow of western capital and expertise into the U.S.S.R. has been reversed with the first Soviet investment in a western oil field supply business.
Almetyevsk Electric Submersible Pump Plant (Alnas), based in the Romashkino oil basin, has formed a 50-50 joint venture with Ramco Oil Services plc, Aberdeen, to market Soviet built electric submersible pumps (ESP) in Europe, North America, and the Far East.
The first 30 Soviet made pumps will be distributed in June for testing by multi-ESP users in Europe and North America. By yearend, Ramco Alnas Ltd. expects the business to be on stream.
WESTERN LEVEL QUALITY
Stephen Remp, chairman and chief executive of Ramco, said ESPs were the one area of the Soviet supply business where the quality of equipment was equal to that of western manufacturers.
After years of buying western equipment, the Alnas plant was set up 11 years ago with manufacturing facilities from Germany, Japan, Denmark, Italy, and the U.S. It is managed on principles borrowed from the aerospace industry.
Remp said Alnas manufactured every component for the pumps except for electric cables. Soviet pumps had run lives averaging 500-800 days, which he described as an excellent record even by western standards.
The Alnas plant can manufacture 16,000 units/year but was working at only 50% of capacity. It is putting together an export division, where top workers and prime components would be used to fabricate the pumps to be sold by the joint venture.
Remp said key to reliability of Alnas products is in extensive quality control facilities. Twenty four artificial wells in the plant simulate extreme operating conditions.
Every pump is tested and given a passport providing details of individual characteristics. The motor also is tested separately with a telemetry system and then stripped and inspected for any sign of wear before being reassembled and retested.
Remp said this 200% checking system was unique to Alnas, noting western competitors only batch test because they are unable to carry cost of such high quality control.
The weak link in the Alnas system is Soviet made cable. This would be replaced by western cable for units offered in Europe and North America.
MARKETING APPROACH
Remp acknowledged Ramco Alnas would have to overcome prejudice against Soviet equipment in western markets. The new company would introduce the principle of renting pumps in addition to normal purchase agreements that would cut capital costs for marginal operations and perhaps allow ESPs to eat into the market for beam pumps.
Ramco Alnas also will offer a 1 year guarantee for all its pumps, exchanging pumps at request without question.
Remp said the joint venture is not looking to flood the market with cheap Soviet pumps but noted the new equipment will be cheaper than its western counterpart.
Within 3-5 years, Ramco Alnas hopes to have 10-15% of the western market for ESPS. Given expected growth in this market, Remp said, meeting the joint venture's targets won't mean a drop in units sold by western companies, only a decline in their overall market share.
After penetrating onshore European and U.S. markets, the joint venture would look at Indonesia, one of the world's major markets for ESPS. Alnas pumps have capacities of 500-6,000 b/d but not higher capacity ranges for use offshore.
The Soviet company will have two members on the board of the joint venture and will foot cost of stocking pumps outside the U.S.S.R. in a distribution system based in the Netherlands. It will be paid in hard currency once sales are made. Ramco will be responsible for marketing the pumps.
Remp said successful growth of Soviet trade will depend on clear indications it is a two way affair with quality Soviet products having access to world markets.
Copyright 1991 Oil & Gas Journal. All Rights Reserved.
