General Meeting: the MNKT proposed to create an Association of Small Oil Companies under the government

Oil remains one of the most important sectors of the Russian economy. However, not all problems in this area remain resolved at the state level. That is why oil companies come up with proposals designed to unite disparate small oil companies (MNCs). For example, MNKT CEO Timur Shaimiev proposed creating an Association of Small Oil Companies under the Russian government and deconservating 26,000 old wells. Izvestia experts discussed how this initiative could affect the industry.

An urgent need

There is no single association in Russia today that would effectively coordinate the work of small oil companies, industry experts point out. There is a clear disconnect within the sector. For example, there is the Assoneft Association, which positions itself as a Russian organization, but it consists of only 3-4 companies and it has failed to speak for all of them. A petroleum consortium was established in Tatarstan almost 30 years ago. The tasks of this joint-stock company included the development of small oil and gas companies in the republic. This was the case in the beginning, but few people understand what the consortium is currently doing.

"At the moment, we are receiving invitations from them to events and requests for charitable contributions, to the oil and gas industry exhibition in Kazan or the annual Olympiad of young geologists, but we have not yet seen these geologists," the Director General of MNKT (Small Oil Company of Tatarstan) summed up sarcastically Timur Shaimiev.

This is where the idea of creating an association under the government of Russia appeared. According to Timur Shaimiev, the involvement of the state will bring oil workers together and solve the problems of the industry. Why should the state lead? This will save the Association from having to choose a leader, and the oilmen themselves will focus on something else. "The exchange of experience is important to us, we in small oil and gas companies depend on the use of advanced technologies," Shaimiev says, "yes, we in MNKT have our own practices for efficient production, someone has their own, and this exchange at the technology level is important."

At the same time, it is important that such an association is proposed not on the basis of a single tax agency, but under the patronage of the government, that is, with guaranteed equal representation of all businesses.

The issue of technology for small oil companies is really special. There is no refining from refineries in the company structure. They earn only on what they have mined and sold. At the same time, companies have licenses to develop 2-3 deposits, and work on some of them can only generate losses. And only through technology, MNKT believes, can costs be reduced, kept afloat and developed.
"Small oil companies are generally more mobile, they can quickly implement new technologies, it is very difficult to implement small technologies in a large oil company, and sometimes it is not necessary. And small oil companies are always ready to use any progressive methods to increase oil recovery," said Fialka Khasanova, an expert at the FAMOIL Innovation and Technology Center.

Small and daring

The work of such an association with the state or under the authority of the state should finally resolve the issue of the status of the small NC themselves. Today, these small enterprises have the same tax regime as large companies in Russia. At the same time, the economy and the conditions for doing business are completely different.

"Take the debit of the well, that is, the daily production of small oil wells," says Timur Shaimiev. — It is about 5 tons, which is not very much. The high sulfur content of this oil has a negative effect, which affects repairs, as there is corrosion and accelerated wear of equipment." The association, according to the oilmen themselves, will allow the state to get to know more about the economics of small oil companies, their costs and determine support where necessary.

MNCs themselves should take certain steps within the framework of the future association. So, oil companies need to open access to the primary documentation of their companies for the state right now. According to Timur Shaimiev, this, despite the existing tax monitoring, will allow the state to understand where companies are sinking and where they are on the rise. A full analysis of the industry will be carried out, which will make it possible to regulate the activities of companies more effectively.

The initiative to create a Russian-wide association of MNCs can significantly revive the situation in the Russian oil industry. Today, there are about 800 small oil companies in Russia, which have been granted 4,000 licenses to develop fields. The contribution of small oil companies to the total production is about 23% of the total production in the Russian Federation as a whole. This is already a separate industry. "Recently, there has been a lot of talk about problems with the resource base in the country, but 26,000 mothballed wells can be transferred to small oil companies," says Timur Shaimiev, "their development was unprofitable both in Soviet and Russian times, MNCs are able to produce from them and make a profit."

Small oil companies appeared in Russia in the mid-90s of the last century, after the privatization of the country's oil-producing sector. It was on these companies that unprofitable deposits were "dumped".

"Large WINKs (vertically integrated companies) refused to develop such fields, where oil is highly viscous and sulphurous, and the wells themselves with constantly falling internal pressure," said Fialka Khasanova. Today, companies have learned how to work with a problematic asset.

According to the MNKT, the involvement of the state in the association will allow oil companies to resolve the issue with universities. In fact, it will oblige universities to work closely with future MNCs in the development of modern equipment. In this case, not every MNC will individually apply to a particular university with its proposals, but common requests and technical specifications will be developed within the framework of the Association. Taking into account regional specifics, features of deposits, own developments. "It is important for us to use the scientific potential of universities, as the current situation is that imported equipment is still not of the best quality," says Timur Shaimev. "Gearboxes, screw pumps, rocking machines and other equipment are more energy—efficient, the period of inter-period repairs has been extended, they are more durable, in many respects superior to our equipment. and we need to work together to make it as good as a foreign one."

The possible effect of creating such an association, coupled with the deconservation of thousands of wells, was vividly described in the Federation Council of the Russian Federation by Gennady Shmal, President of the Union of Oil and Gas Industrialists of Russia, speaking at the Round Table "Improving the legislation of the Russian Federation on taxes and fees in relation to independent oil companies."

"Americans produce 400 million tons of oil from shale rocks, but this is today, and everything was done from scratch by small oil companies, of which there were about 10 thousand. No large company was engaged in the development and extraction of oil from shale. Only MNCs could quickly adapt to the new environment, flexibly use technology, and the result was not long in coming."