The largest oil field service companies in Russia are counting on the market getting back on its feet as oil prices rise, RBK Daily reports. Specifically, France’s Schlumberger expects “double-figure” growth by expanding services in East Siberia and on Sakhalin, the company announced during a presentation for investors. Still, the sector will likely reach pre-crisis only in two to two and a half years. Last year, crude production maintained its levels mainly due to Rosneft’s Vankor field. In order to keep production capacity above 10 million barrels per day, Schlumberger executives say fields in West Siberia must be more actively developed.
After significantly curtailing their work in 2009, Russian oil service companies are also hoping for more contracts this year. In 2009, Integra’s drilling volumes dropped 50 percent off 2008, while seismic work was down 11 percent and the number of wells turned over to clients dropped 30 percent. Still, the company hopes to increase its portfolio of orders and also the level of its capital investments by 10 to 20 percent in 2010 compared to 2009. The head of Gazpromneft-Nefteservis, Valeriy Kolotilin told RBK in an interview that his company’s contracts in 2010 would be “somewhat more than last year”.
Experts estimate that the volume of the Russian oil service market could grow 5 to 10 percent over the next 12 months. Oil service companies suffered heavily during the crisis and the accompanying drop in oil prices. Ernst & Young has calculated that while oil service contracts were worth $20 billion before the crisis, in 2009 this figure fell nearly 25 percent to $15 billion. According to other estimates, last year the oil services market was worth about $8 to $10 billion, not including capital construction or production.
This year, the growth in the volume of oil services work will affect all of Russia and could increase at least 100 percent, but much will depend on the situation on the oil market in the second half of the year, Univer Kapital investment analyst department head Dmitriy Aleksandrov said. He added that growth in the oil services segment began in the middle of last year and fully recovery could take up to two and a half years. “A lot here depends on the company, its projects and the tax regime in the country”, he said.
