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- They won't take you into exploration: they want to squeeze foreigners out of an oilfield service in Russia
They won't take you into exploration: they want to squeeze foreigners out of an oilfield service in Russia
Priority in state contracts for drilling and repair of wells is planned to be given to companies from the Russian Federation and the EAEU countries. The authorities are working on the relevant legislative changes, which should be prepared by the end of June, Izvestia found out. Today, domestic and country-friendly companies are often inferior to foreign players who, despite the sanctions, continue to operate in the Russian market. Their share in the oilfield services sector is about 15%, with a total market volume of about 2.5 trillion rubles. How the new measures may affect competition in the oilfield services industry — in the Izvestia article.
A national regime for oilfield services is being prepared in Russia
The authorities are preparing to introduce a national regime for public procurement in the field of oilfield services. He assumes that customers will be required to reject foreign applications if there is at least one proposal from the EAEU countries. Proposals for legislative changes should be prepared by the end of June, follows from a letter from Mikhail Ivanov, Deputy Head of the Ministry of Industry and Trade, addressed to the Ministry of Finance, the Ministry of Energy and the Ministry of Natural Resources, which was reviewed by Izvestia. Oilfield service companies are responsible for drilling, repair, geophysical research of wells, drilling support and seismic exploration.
"These issues [...] require consideration by the Ministry of Industry and Trade with the participation of interested stakeholders and taking into account the volume of demand for the product, the volume of its turnover in the territory of the Russian Federation, as well as the number of business entities producing such goods in the territory of the Russian Federation," the Finance Ministry told Izvestia.
The Ministry of Natural Resources and Environment recommended Izvestia to contact the Ministry of Industry and Trade. The ministry said that the topic was discussed at the coordinating council for import substitution of oil and gas equipment and is currently being worked out by relevant structures in terms of preparing proposals for the priority use of domestic equipment.
The Ministry of Energy stressed that Russian oilfield service companies already provide a wide range of services, meeting the needs of customers within the framework of current requirements. Izvestia sent inquiries to oil and oilfield service companies.
— The introduction of a national regime for the procurement of oilfield services will ensure guaranteed sales for Russian developers and manufacturers of high-tech equipment. We can talk, for example, about telemetry systems, rotary controlled systems, various types of software, etc.," said Valery Andrianov, associate professor at the Financial University under the Government.
Such a proposal can generally be supported as a tool to protect technological sovereignty and stimulate localization, Yuri Stankevich, deputy chairman of the State Duma Committee on Energy, told Izvestia. According to him, oilfield services are a key element of the sustainability of the entire oil and gas industry: the level of production and the effectiveness of the development of hard—to-recover reserves directly depend on the quality of drilling, hydraulic fracturing, geophysics and seismic exploration.
By 2022, the share of the largest international companies (including service units from the USA and the EU) in certain high-tech segments could reach 20-30%, and in niche areas even higher, the deputy noted.
Most of the foreign presence in the Russian market was provided by the so—called "big four" companies - Baker Hughes, Halliburton, SLB (formerly Schlumberger) and Weatherford. In 2022, they announced the suspension of operations in the Russian Federation. Halliburton and Baker Hughes left our country, selling the business to local management (now these are, respectively, Burservice and OFS Technologies). The Russian divisions of two other companies, Weatherford and Schlumberger Technology Company, continue to operate in the country with restrictions, the media reported.
In fact, we are talking about the fact that they want to squeeze foreigners out of the oilfield service — after 2022, some Western companies formally sold the business to local management, but continue to operate under new signs, and some did not leave at all, said Dmitry Tortev, a member of the expert council of the State Duma Committee for the Protection of Competition. At the same time, some organizations continue to report to their head offices in the West — such a "double loyalty" creates risks in the event of an escalation of sanctions, the expert believes.
In 2023-2025, a significant part of Western companies either withdrew from projects or localized their business through the transfer of assets to Russian management: currently, the total share of direct foreign participation is estimated at less than 10-15% of the market, while it is concentrated in certain technological niches, said Yuri Stankevich.
The main countries of presence are China (drilling equipment, drilling support services, technology supply), individual companies from Asia and the Middle East, and in some cases, structures formally localized in Russia, but with foreign technological roots, he added. By the end of 2025, the Russian oilfield services market grew by 4%, to about 2.6 trillion rubles, the media reported.
The potential effect of the introduction of the national regime is to reduce dependence on external suppliers of equipment and technologies, especially in high—tech segments such as directional drilling, multistage hydraulic fracturing and digital services. In addition, the measure can stimulate investments in localization and R&D by Russian and Eurasian companies, as well as create a steady demand for domestic solutions, increasing their competitiveness, the deputy said.
How not to lose access to technology
When imposing restrictions on foreigners' access to the domestic market, it is necessary to take into account the capabilities of Russian companies to provide the industry with the necessary technologies, said Dmitry Gusev, Deputy chairman of the Supervisory Board of the Reliable Partner Association.
Among the possible risks, according to Yuri Stankevich, are a shortage of certain technologies and equipment at a transitional stage, an increase in customer costs with limited competition, and a decrease in the pace of implementation of advanced solutions if the mechanism is too rigid.
"It is advisable to introduce such a special regime in stages, with a list of specific services and technologies for which sufficient localization has been confirmed in Russia and in the EAEU as a whole," the parliamentarian said.
Earlier, the head of the Tyumen region, Alexander Moore, said that although Russian companies have made great progress in developing the production of oilfield service equipment, dependence on imports of high-tech equipment remains.
In general, the introduction of a national regime can become a tool for structural restructuring of the market, but its implementation must take into account the balance between the objectives of technological sovereignty and the need to maintain the efficiency of oil production, said Yuri Stankevich.
Russian equipment may still be inferior to Western equipment in a number of areas, which is fraught with a decrease in the efficiency of developing the most difficult geological deposits, Valery Andrianov added. At the same time, the reduction of competition, in his opinion, can lead to higher prices for domestic equipment.
— It is estimated that it may rise in price by 5-10%. In addition, the national regime, which applies to the EAEU countries, will strengthen the positions of manufacturers from Kazakhstan and Belarus, which also offer some types of products for oilfield services on our market," the specialist said.
At the same time, the national regime does not mean the complete displacement of foreign companies from the market — in those areas where Russian enterprises will not be able to offer an alternative, they will have to resort to the services of foreign companies, Valery Andrianov added. But the positions of Chinese mass-market products, which can be replaced by domestic analogues, may be noticeably squeezed, the expert added.
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