RECRUITING U.S. OIL PERSONNEL TO HELP RUSSIA?

A key energy legislator has proposed the U.S. recruit several hundred oil industry technicians to help maintain oil production in the Russian republic.

Rep. Phil Sharp (D-Ind.), House energy and power subcommittee chairman, offered the idea at a subcommittee hearing last week on the Soviet oil industry turmoil (see related stories, pp. 22-25).

Meantime, that turmoil notwithstanding, the parade of companies seeking business opportunities in the disintegrating Soviet Union shows no sign of letting up. Here's a roundup of some recent deals and progress on established ventures:

• Kuibyshevneft Production Association of Samara, Russia, has signed a protocol of intent and contracts with Edinburgh consultants County Natwest Wood MacKenzie to facilitate foreign investment in the area. The association is responsible for oil field development and production and other industry operations in the Middle Volga hydrocarbon province.

• Ramco Oil Services plc, Aberdeen, has negotiated a second development joint venture in the former Soviet republic of Azerbaijan. In association with Brown & Root, it will undertake a feasibility study of further development of the 28th of April field in the Caspian Sea.

• Tatex joint venture expects to receive about 36,000 bbl of export crude in November and December in exchange for stock tank vapor recovered by eight vapor recovery units (VRUs) on wells in Tataria in the Russian republic (OGJ, Oct. 7, p. 28). Tatex plans during 1992 to install another 16 VRUs in Tataria, 5 VRUs in 1993, and 24 flare gas recovery units the next 2 years,

  Tatex is a joint venture of regional Russian oil and gas amalgamation, Tatneft, and Texneft Inc., an 80% owned subsidiary of Global Natural Resources Inc., Houston.

• White Nights joint venture is producing oil from the first well the venture has brought on line in western Siberia's West Varyegan field.

• Gardes Directional Drilling Inc., Lafayette, La., formed a joint venture with Orenburgneft (OBN) oil production association in the Russian republic's Orenburg region to develop Vorontsovskoe and Rodinskoe fields in the Volga-Ural region near the Caspian Sea. Combined potential reserves of the two fields are estimated at more than 290 million bbl of oil.

Gardes plans to produce joint venture reserves with patented radial drilling technology that combines elements of horizontal drilling and oil mining technology. The technique allows several radials to be drilled from one horizontal wellbore.

In the first phase of the multimillion dollar deal, Gardes will draw up development plans based on existing geophysical data.

SHARP'S PROPOSAL

Sharp proposed the U.S. send an Emergency Oil Conservation Corps (EOCC) to Russia, which produces 90% of the oil in the former Soviet Union.

"I believe that a few hundred U.S. pipeline technicians, production engineers, well maintenance experts, reservoir engineers, and others could survey the problems of the Soviet oil system and recommend solutions to the appropriate oil and gas associations in the Russian republic."

Sharp said the corps would try to improve oil conservation and production without duplicating efforts of U.S. companies to obtain oil field development and exploration concessions.

"A team of 8-10 Americans, for example, would be matched with the Russian production association responsible for each major field. I believe that 28 teams, one for each Russian oil association, could inventory and prioritize the problems of the major Soviet fields and pipelines in less than 6 months. Some of the problems so identified may be simple, involving little or no new equipment, and could probably be solved on the spot.

"The next step would be to bring in oil service and pipeline companies to solve the remainder of the most pressing short term problems. Funding of this costlier second phase would have to involve an international effort with assistance from other countries or from agencies such as the World Bank.

"Oil service companies would be paid to correct the most serious short term problems, but also to give the Russians the knowledge to prevent or solve other similar problems." Sharp said the final step, an important one long term, would be to facilitate U.S. investment in the discovery and development of new fields. "With the current depression in our oil service industry, I believe very qualified U.S. experts who may be currently unemployed or recently retired could be recruited for the EOCC at a reasonable cost.

"These teams, followed by oil service companies, could potentially save millions of barrels of oil for world markets and help stabilize the former Soviet republics.

"Soviet and Russian spokesmen have repeatedly stated that technical assistance, not money, is the only long term solution to their problems. We have recently voted $100 million in food aid for the former Soviet Union.

"The EOCC would cost less than $10 million and could lead to much, much larger and longer lasting benefits, both to Russians and to Americans."

ADMINISTRATION VIEW

Deputy Energy Sec. Henson Moore said the administration would study Sharp's "creative" proposal but indicated it was unnecessary.

"We have good knowledge on what is needed. They are way behind us in technology and equipment. The problem is how to fill the need."

He said President Bush has been urging the Department of Energy to take steps to help maintain Russian oil production. He detailed a number of actions DOE has taken to encourage the export of U.S. technology and expertise to the former Soviet Union.

Industry witnesses at the hearing said the Soviets must provide a more attractive investment climate.

They also recommended the Overseas Private Investment Corp. do more to support energy loans, the Internal Revenue Service should allow firms to credit Russian taxes against U.S. taxes, Congress should repeal restrictions on Export-import Bank guarantees for Soviet ventures, and the U.S. government should renegotiate investment and tax treaties with the Russians.

RAMCO VENTURES

The 28th of April field, operated by local production association Kaspmorneftegas, currently produces about 120,000 b/d of oil from nine platforms in water depths of as much as 490 ft.

Ramco said the largest part of the field's reserves lie in deeper water beyond the Soviets' technical capabilities but well within the reach of western offshore technology.

Ramco and Brown & Root will submit to Kaspmorneftegas technical and commercial proposals for further development of the field. A 4 month, two part study beginning in January next year would cover boosting output from the existing production area and look at new production from the deeper water area using low cost proven subsea techniques. The 28th of April field, said Ramco, is considered to have substantial remaining reserves.

Azeri was discovered by Kaspmorneftegas in 1987 about 93 miles off Baku in water depths of 410-650 ft. Ramco said that, subject to further negotiations, the western group will participate in development and operation of the field alongside Kaspmorneftegas.

Ramco currently is part of an Amoco Corp. led group undertaking a detailed feasibility study of development of Azeri field, which is near the 28th of April field.

Ramco also is negotiating to establish a western style offshore supply base to service Caspian operations and through its Ramco Alnas unit is marketing Soviet made downhole submersible pumps to the west.

If the results of the study are favorable, the parties would begin negotiations for a development agreement intended to lead to first revenues within 2 years. The exact size of Ramco's holding would result from these negotiations. Ramco has a 1% stake in the Amoco operation in partnership with BP Exploration, Den norske stats oljeselskap AS, Unocal Corp., and McDermott International.

WHITE NIGHTS

Gil Labbe, president of Anglo-Suisse L.P., Houston, one of White Nights' two U.S. partners, said 26-2 Vera flowed 1,015 b/d of 40.8 gravity oil and 1.2 MMcfd of gas through a 1/2 in. choke with 400 psi flowing tubing pressure from perforations at 10,441-97 ft in upper Jurassic UV sands.

Labbe said the well was drilled as frigid Siberian weather drove temperatures to as low as -60 F.

Including production from 26-2 Vera, White Nights since starting operations in April 1991 has increased production in its operating area to about 30,000 b/d, a gain of about 36%.

White Nights is the first Russian-American oil and gas joint venture to drill for, produce, and export oil from Russia.

Partners are Anglo-Suisse, Phibro Energy, Greenwich, Conn., and Varyeganneftegaz, a Russian production association.

The joint venture is drilling the first two of several hundred horizontal wells planned on joint venture acreage.

Copyright 1991 Oil & Gas Journal. All Rights Reserved.