Oilfield services as a locomotive of Russia's economy

Vladimir Borisov: Russian oilfield services can become a driving force for the economy of the whole country

Author: Marina Salnikova,, 10 June, 2013. Source:

Tyumen. Russian oilfield services may become the engine that would pull the whole economy of the country. So says Vladimir Borisov , president of Tyumen Association of oil and gas service companies.

He announced this at meeting in Moscow, devoted to development of Russian oilfield services. The event was held on June 7, chaired by Energy Minister Alexander Novak and Yuri Shafranik, the head of the Council of the Union of oil and gas producers. The meeting was attended by the Deputy Minister of Energy of the Russian Federation Kirill Molodtsov, deputies of Duma, representatives of drilling, mining and service companies.

Vladimir Borisov made a presentation, with particular attention paid to the loss of the Russian domestic oilfield services market: the share of foreign companies here nowadays is 2/3.

"Nobody is against the participation of foreign companies - they bring new technologies to market, as well as equipment, and invest money in training staff, - stressed Vladimir Alexandrovich. - But not at the expense of replacement and acquisition of domestic companies, which are converted to outsiders. "

Russian oilfield services, for various reasons, have difficulties in competition with foreign ones. Vladimir Borisov gave an example: some run on the cinder track, lightly dressed in sneakers and shorts. Other – run with dumbbells, and even jumping over hurdles ... "If Chinese companies get loans at 0-3% per annum, in other countries the interest rate - up to 5%, then the Russian companies are forced to borrow at 15-19%," - he said.

Fiscal burden in Russia is several times higher, according to Borisov. Thus the local oilfield service companies pay VAT upon completion of the work, and not on the fact of receiving money for this work. Payments by oil companies can be made in 2-3 months. This can be explained by only one reason: there is no State strategy in Russian oilfield development.

"By the way, I had the impression that there is understanding in the Ministry - said Borisov. – Specifically meaning the VAT, Alexander Novak acknowledged that this is a common Russian problem. But perhaps for oilfield companies it affects the most. The minister said he would announce this issue on the level of the Russian government. "

Vladimir Borisov has participated at many meetings on oilfield services issues. According to him, the last one was the most representative. "The minister was in no hurry, did not look at the clock, he was asking a lot of questions. I became confident that after this meeting, the situation for the domestic oilfield services is going to change for the better.

This all is more important because oilfield services can become a backbone sector of the Russian economy, the locomotive that would pull the whole economy of the country. After all, we buy tractors, rigs, ATVs, chemicals, tools, pipes, cement and other equipment that is made Russia.

Give us easy credit, reasonable fiscal burden, the official recognition of oil and gas services in Russia as a separate industry of equipment production and services - and we are going to pull the whole economy of the country ", - said Borisov.

The civilized market is impossible without the legislative and regulatory decisions of authorities. For example, set the limits to the role of foreign oil services can only the State. It may be worthwhile to adopt experience of China and Norway, where domination of their local manufacturers in oil and gas projects was legislated.

According to Borisov, the meeting members recognized that among oil companies "Gazprom neft" is the most advanced on building long-term, correct relationships with oilfield service companies, suppliers and contractors.

President of Tyumen Association of oil and gas service companies Vladimir Borisov was elected to the working group to finalize the outcome of the meeting and to prepare appeals to the government of the Russian Federation.