No. 1, 2004

The Barents Sea, the very rim of the Arctic Ocean's southern coast, is where the Perm oilmen have completed the supplementary exploration, construction and bringing into service of Tobeiskoye, Myadseiskoye and Medinskoye fields in the Timan-Pechora oil- and gas-bearing province (today they form the Tobeiskoye oil field).

Manmade islands

North is north: local weather is seldom what people would like it to be, the more so in an off-season period like now. If from Perm to Naryan-Mar, the capital of the Nenets Autonomous Area (NAA), the airlift is more or less normal thanks to the existing airline served by Tu-134 and An-24 aircrafts, the rotation crews occasionally have to wait hours and even days for flying weather to set in in order to make the last 280 km separating Naryan-Mar from Varandey and the Tobeiskoye oil field, where they work. This time, however, an interim shift crew from JSC LUKOIL-Permneft, our companions on the way to well No. 47 and on, were just lucky. The coastal tundra enjoyed several hours of a truly fine weather when even the low “polar” sun that can warm no one in this time of the year appeared on the horizon. True enough, a milky mist swathed the ocean right after noon and soon was all over the tundra. It was so thick that it took us five attempts and almost the entire fuel tank to land on a next helicopter pad where we were due to take on board a crew that had worked its 30-day stint (the shift lasts that long in these parts).

The “manmade island” sprang into view unexpectedly amid a boundless snow desert. It was like a mirage – with drilling rigs, the orange-colored units that leapt to the eye, a cluster of all-track vehicles, dump trucks and bulldozers, a village of clean, neat site huts. Several rows of bending pipelines ran from a booster pump station toward the ocean. Unlike their “mainland” counterparts, these were high above ground on concrete piles, not in underground hollows: permafrost dictated laws and requirements of its own. For example, in these parts a sand “cushion” several meters thick has to be made before a drilling rig can be installed. An entire sand island (precisely what we saw appear under our chopper) is needed for the Central Oil Gathering Station (COGS), our first landing destination, where all units and housing for the crews are located.

A similar “island” dotted with huge oil tanks is far away on the very edge of the ocean front. A subsea pipeline runs from it to a marine terminal several kilometers away, where the ocean is deep enough to accommodate tankers. Incidentally, the ocean in that place was mostly free from ice. Five reinforced ice-class tankers were rocking slightly on the waves, obviously waiting for their turn to load. And yet, an icebreaker was circling round the nearest one, the Usinsk, crushing what remained of the ice.

For several months, the new arctic oil field has been exporting crude oil to Rotterdam via the Arctic Ocean, providing the treasury with additional currency earnings.

Truth to tell, it's hard, almost impossible, to believe that just a year ago today's industrial landscape was a piece of the denuded tundra.

Says Nikolay Sobyanin, Deputy General Director and Director for New Projects for LUKOIL-Permneft: “But that is really so. When I first came here in November 2002, the place was, in fact, the tundra pure and simple. We put pegs in the snow to mark out where a booster pump station would be. And that was how it began.”

Russian geologists discovered these and many other fields in the Far North quite a while ago, almost fifty years. But their development required too much in the way of investments, which the country didn't have at the time of discovery and even less so today. Thus for a long time oil production in northern Timan-Pechora seemed an insoluble problem. But things changed with the coming of LUKOIL, which used state of the art processes to start development of the local fields. The Company also found a cheap and convenient way to ship crude oil by tankers along the Northern Sea Route.

As far as the three fields forming the Tobeiskoye oil field are concerned, everything, to be utterly precise, began with the tenders held by LUKOIL. It was the Perm oilmen who proved better than numerous other contenders, winning the contract for their supplementary exploration, construction and commercial development, which was, in effect, the contract for breathing a new life in that territory.

To quote Vadim Mitroshin, oil and gas production chief at the Tobeiskoye oil field, a thing of no small importance for hitting it off in the North was an in-house contest for northern jobs held among LUKOIL-Permneft workers and engineers. There was no getting rid of those who wished to put themselves to a test in an unaccustomed, forbidding environment.

Nenets Autonomous Area is the administrative division in the extreme North-East European Russia (176,700 km2). Formed in 1929, the area forms the northern part of Arkhangelsk Region and extends along the tundra coast of the Barents, White, and Kara seas. Naryan-Mar, the capital, is a lumber port on the Pechora River. The area includes the northern section of the Pechora coal basin, with mines at Khalmer-Yu and along the Silova River. Until the discovery of oil and gas fields, reindeer raising, fishing, fur trapping, and seal hunting were the chief occupations. Fish canning, sawmilling, and hide processing are also important to the area. Many of the formerly nomadic Nenets live in agricultural settlements. Russians make up the majority (66%) of the population, while the Nenets have shrunk to 12% of the population.

Both LUKOIL-Permneft General Director Nikolay Kobyakov and his deputy, Nikolay Sobyanin, and Naryan-Mar territorial production division chief Vadim Kozlov were well aware that working in the tundra within a stone's throw from the Arctic Ocean, an area with exceedingly difficult natural and climatic conditions, was an outstanding trial. So the selection of candidates was unusually stringent, the probe extending not only to business and professional qualities of each applicant but also to his health and proclivity to alcohol (the dry law is practiced during the shift).

Testing and interviews with psychologists were used to analyze one's disposition, habits, sociability, and compatibility with others. As a result, all 70 oilmen, who passed the contest and became crewmembers, are not just top-notch professionals skilled in several related jobs, but also exceptionally cordial, responsive, tolerant and non-quarrelsome individuals. The majority are young men (the average age bracket is 26 to 30 years) with families. Many, like selfsame Vadim Mitroshin, are hereditary oilmen. As a rule, all were through a college or technical school, a university or even two universities, and all held oilfield jobs in their native Kama area.

Seemingly, this sort of people will not be cowed by any difficulties. But what they had to face on the Arctic coast was worse than the most pessimistic expectations. At times, the crewmen admit, even they doubted their own capacity to cope.

The northern trial

In the first place, they built winter motor roads, all ice and snow, to bring sand for their “island” from a quarry 20 kilometers away, and the necessary materials and equipment from Usinsk and Haryaga, several hundred kilometers away. Said Vadim Kozlov: “We had to make haste fetching all things we needed: a winter road lasts only from December to May. In summer, the tundra is impassable and we can be reached only by helicopter.”

On top of that, last winter was a series of blizzards in the Nenets Autonomous Area. They had to mark time almost throughout February: the available equipment was mostly represented by “willful” foreign-made jobs that required ideal European standard roads. Moreover, spring came unusually early for these parts. Occasionally the temperature reached 0° C; the winter roads thawed, vehicles got stuck in holes. Occasionally work had to be stopped in the middle of the day. Once or twice Vadim Kozlov even doubted that they would have time enough at least to heap sand for the booster pump station. But they did, meeting the deadline and laying in considerable stocks of sand for the summer. They coped where the equipment was concerned, too, achieving a timely delivery and installation.

There were further emergencies when well No. 47 in the Myadseiskoye field, the first in the entire Tobeiskoye oil field, was being put into service. Northern crude oil is heavy, viscous, sour and paraffin-based. Its freezing temperatures vary between + 14° C and - 20° C . Says Tobeiskoye oil field department chief Alexey Abramov: “It means that this kind of crude has to be heated while it is in the pipeline. We seemed to have made every precaution: we installed two gas diesel power plants for a total of 3 MW. We welded thin pipes with specialized “heating” cables inside to the pipeline to prevent crude from freezing. But it turned out unexpectedly that some water had lingered in the pipeline, and it later froze solid.” So, they launched the well and let in a flow of warm crude that began eroding the ice and pushing it forward. A plug formed a day later: the well was in operation, the pressure was mounting, but the pipeline was hopelessly plugged. Luckily, a Permneftegaz ERRT had been invited specifically to attend the launching. A group of as highly competent specialists, they found the plug within an hour and heated the pipe in that place. Everyone heaved a sigh of relief. Alas! The same thing recurred again and again for the next few days.

After three days of this extremely intense work, operators were so tired that they dozed off the moment they were in bed. It was Deputy General Director Nikolay Sobyanin, a guest of honor at the launching, who stepped in to handle the control panel.

That was the kind of trial the Perm rotation crew had to stand at the launching of the first well located near the edge of the Arctic Ocean. To be sure, nothing of the kind would have happened had the well been launched in summer. But they promised to meet the deadline, April 25, 2003, LUKOIL heads had imposed for the first well. And they were as good as their word. It was precisely on April 25 that the Tobeiskoye oil field produced its first 500 tons of commercial crude.

One good turn deserves another

Starting from scratch, accomplishing the most difficult work associated with the construction and putting into service of new fields, and coming to like this part of the world with all their heart, the overwhelming majority of crewmen accepted the offer to go on working on the Arctic Ocean coast. But it transpires that LUKOIL-Permneft will have to hand over the Tobeiskoye field to LUKOIL-Naryan-Marneftegaz as early as December rather than two years later as originally planned.

We asked Vadim Kozlov this indiscreet question: “Isn't it a pity to let others operate the oil field that it was so hard for your people to launch and make fit for living? After all, it was thanks to you, Perm oilmen, and in many respects to your permanent contractors from the Perm Region that so graceful and convincing a victory became possible.”

Said he gravely: “What can I say? Humanly, it's certainly a pity: we are handing over not only the developed and livable oil fields but also, so to speak, the flower of the Perm oilmen. But they aren't falling into strange hands; it'll be a LUKOIL division like ours. Again, a while ago, skilled oilmen from Azerbaijan, Tatarstan, Bashkiria, Orenburg and other regions had come to the Kama area to help train local personnel and develop our own oil fields. The school of Perm oilmen they had created became famous far and wide outside the country. And one good turn deserves another, as they say. Now is the time we pay the debt.”

Besides, LUKOIL-Permneft itself is none the worse off. According to Vadim Kozlov, the northern project was such a shot in the arm, such a steeling experience, such a good lesson for all Perm oilmen that each became wiser and a lot more experienced. Says he: “Previously we were used to stationary production; in the North, we had a feel of what it was like to launch a new field away from the central base, when one has to plan not only the production scheme itself, but also some delivery arrangement, the communications, a life-support system for the village where rotation crews will dwell, and much else. On top of that, we've had an experience of the project method whereby oil is produced all over the world.”

In his time Great Russian scientists Mikhail Lomonosov said that Siberia would be a source of power for Russia. Applying his words to the present situation, one might say that the North will be a source of riches for LUKOIL. As early as two years from now the three fields in the Tobeiskoye complex will produce 3.5 million tons of oil a year. By 2010, the Company's fields in the Timan-Pechora province will yield a total of 20-30 million tons of oil a year. The PermNIPIneft Institute has already got down to designing an unprecedented marine terminal for Varandei that prospectively will be capable of handling between 10 and 12 million tons of oil a year.