OIL IN THE 21ST CENTURY - EVOLUTION OF OIL AND GAS TECHNOLOGY RUSSIAN FUEL AND ENERGY SECTOR: DIGITISING - Neftegaz.RU

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OIL IN THE 21ST CENTURY - EVOLUTION OF OIL AND GAS TECHNOLOGY RUSSIAN FUEL AND ENERGY SECTOR: DIGITISING - Neftegaz.RU
EVOLUTION        RUSSIAN FUEL         OFFSHORE
                      OF OIL AND GAS   AND ENERGY SECTOR:   INTEGRATED
                      TECHNOLOGY       DIGITISING           LNG TERMINAL

4 [ 100 ] 2020

     OIL IN THE
     21ST CENTURY

Included in the list of VAС
OIL IN THE 21ST CENTURY - EVOLUTION OF OIL AND GAS TECHNOLOGY RUSSIAN FUEL AND ENERGY SECTOR: DIGITISING - Neftegaz.RU
OIL IN THE 21ST CENTURY - EVOLUTION OF OIL AND GAS TECHNOLOGY RUSSIAN FUEL AND ENERGY SECTOR: DIGITISING - Neftegaz.RU
Oil in         Oil and gas industry epochs            4   High-tech fasteners          GEOLOGICAL EXPLORATION

                the 21st                                                  of the BERVEL                The state of the hydrocarbon
                               RUSSIA main                                                             resource base of Russia                    58
                century                                                   factory
                               Oil in the 21st century               6                                 Recent trends in searching
                                                                                                       and exploration of hydrocarbon
                               The Russian government                                                  crude clusters                             66
                           6
                               purchased Rosneft's Venezuelan
                               assets                                8                                 10 technologies in exploration             74

Russian fuel and energy        FIRST LINE
                                                                          52                           Do sedimentary basins in Russia
                                                                                                       have shale gas?                            76
sector: digitising             The evolution of oil and gas               The state of the             Russia in titles                           85
                               technology                            10
                                                                          hydrocarbon resource         MARKET
                                                                          base of Russia
                               DIGITALISATION                                                          Oil and gas sector in Russia
                                                                                                       and the world                              86
                       14
                               Russian fuel and energy sector:
                               digitising                            14
                                                                                                       OIL SERVICE

C O N TE N T
                                                                                                       The deepest oil wells in the world        92
                                                                                                       Intensification number of wells
                                                                                                       at HVO facilities in Samaraneftegaz JSC

Corporate QMS Design.
                                                                                                  58   of high-viscosity oil production        94
                               DIGITALISATION                                                          10 technologies in the oilfield service   98
Key Elements Involved          International bidding and corporate        Recent trends in searching
in Building CQMS               security in the oil and gas sector    22   and exploration of           ECOLOGY
                               Downstream digitalisation             30   hydrocarbon crude clusters   Biochemical activity analysis
                                                                                                       at control of soil reclamation process    100
                               MANAGEMENT

                               CORPORATE QMS DESIGN                  34                                TRANSPORTATION

                                                                                                       Offshore Integrated LNG terminal          104
                       38
                               EXTRACTION

                                                                     40
                                                                                                 66
                               10 offshore platforms                                                   GOVERNMENT REGULATIONS
CP 38xx series additive        CP 38xx series additive for                                             Energy vectors of Kazakhstan              108
for pour-point depression      pour-point depression of crude oil    42   Do sedimentary basins        Economic growth points:
of crude oil                   Petrophysical model                        in Russia have shale gas?    Russian-Swiss partnership as
                               of the Bazhenov formation             44                                a mechanism for forming the sixth
                                                                                                       technological order                       112
                               IMPORT SUBSTITUTION

                               HIGH-TECH FASTENERS
                                                                                                       Neftegaz                                  116
                               of the BERVEL factory                 52                                Special section Classifier                118
                       42      Event calendar                        55                           76   Quotes                                    120
OIL IN THE 21ST CENTURY - EVOLUTION OF OIL AND GAS TECHNOLOGY RUSSIAN FUEL AND ENERGY SECTOR: DIGITISING - Neftegaz.RU
OIL AND GAS INDUSTRY EPOCHS

800 years ago                                                    Publishing house Neftegaz.RU
In 1220, during the siege of Bukhara, Genghis Khan
ordered his troops to fill pots with oil and charge their
throwing machines with them. When the pots of oil would          EDITORIAL OFFICE
break against the walls of the city, they were shot at with      Editor-in-Chief                           Analysts                             Design and layout
flaming arrows.                                                  Olga Bakhtina                             Arthur Gaiger                        Elena Valetova
                                                                 Managing editor                           Anastasia Sultanova                  Proof-reader

700 years ago                                                    Anna Pavlikhina
                                                                 Editor
                                                                 Anastasia Nikitina
                                                                                                           Journalists
                                                                                                           Anna Ignatieva
                                                                                                           Elena Alifirova
                                                                                                                                                Victor Blokhin

In 1320, a French missionary monk, Jourdain de Severac           Executive editor                          Denis Savosin
wrote in his notes about the extraction of oil in Azerbaijan:    Ilya Gromov                               Sabina Babaeva
"there is a place called Baku, where they dig wells, from
which they extract oil, they called it naphtha".                 EDITORIAL BOARD

600 years ago
                                                                 Ampilov Yu.P.                       Gusev Yu.P.                           Makarov A.A.
                                                                 Doctor of Physical and              C.Sc. in Engineering,                 Doctor of Economics,
                                                                 Mathematical Sciences,              Professor, National Research          Professor, Academician of the
                                                                 Professor, Lomonosov                University "Moscow Power              Russian Academy of Sciences,
                                                                                                     Engineering Institute"                Energy Research Institute of the
In 1420, in one of Israel von Mehli's depictions of the          Moscow State University
                                                                                                     Danilov A.M.                          Russian Academy of Sciences
Resurrection, he engraved the devil shooting Greek fire.         Alyunov A.N.                        Doctor of Engineering                 Mastepanov A.M.
                                                                 Vologda State Technical             Sciences, All-Russian
According to Maximus the Greek, Greek fire consisted of          University                          Research Institute of Oil
                                                                                                                                           Doctor of Economics,
                                                                                                                                           Professor, Academician of the
sulfur and earth oil (crude oil).                                Bazhin V.Yu.                        Refining                              Russian Academy of Natural
                                                                                                                                           Sciences, Institute of Energy
                                                                 Doctor of Engineering               Dvoynikov M.V.                        Strategy

500 years ago
                                                                 Sciences, Expert of the             Doctor of Engineering
                                                                 Russian Academy of                  Sciences, Professor,                  Mishchenko I.T.
                                                                 Sciences, St. Petersburg            St. Petersburg Mining                 Doctor of Engineering Sciences,
                                                                 Mining University                   University                            Professor, Academician of the
In 1520, Krystof from Gendorf, the advisor to King Louis         Danilov-Danilyan V.I.               Yeremin A.M.
                                                                                                                                           Russian Academy of Natural
                                                                                                                                           Sciences, Gubkin Russian State
Jagiellon, was granted the long-awaited right to mine ores in    Doctor of Economics,                Doctor of Engineering
                                                                                                     Sciences, Professor, Gubkin
                                                                                                                                           University of Oil and Gas (NRU)
                                                                 Professor, Corresponding
practically the entire Karkonosze region. Over time, mining      Member of the Russian               Russian State University of           Pankratov D.L.
                                                                                                     Oil and Gas (NRU)                     Doctor of Engineering Sciences,
gave life to the coal industry in Poland and the Czech           Academy of Sciences,                                                      Professor, Naberezhnye Chelny
                                                                 Water Problems Institute            Ilyukhin A.V.
Republic.                                                        of the Russian Academy              Doctor of Engineering
                                                                                                                                           Institute
                                                                 of Sciences                         Sciences, Professor,                  Polovinkin V.N.

400 years ago
                                                                                                     Advisor at the Russian                Doctor of Engineering Sciences,
                                                                 Galiulin R.V.                       Academy of Architecture               Professor, Full Member of
                                                                 Doctor of Geological                and Construction Sciences,            the Russian Academy of
                                                                 Sciences, Institute of              Moscow Automobile and                 Engineering Sciences, Naval
                                                                                                     Road Construction State               Academy
In 1620, Jan Baptist van Helmont, placed a piece of              Fundamental Problems
                                                                 of Biology of the Russian           Technical University
                                                                                                                                           Salygin V.I.
marble in a solution of hydrochloric acid and observed           Academy of Sciences                 Kanevskaya R.D.                       Doctor of Engineering Sciences,
the release of "the forest spirit" which he called "gas". He     Gritsenko A.I.                      Full Member of the
                                                                                                     Russian Academy of
                                                                                                                                           Corresponding Member of
                                                                                                                                           the Russian Academy of
introduced the term"gas" into science and pointed out the        Doctor of Engineering               Natural Sciences, Doctor              Sciences, Professor, Moscow
                                                                 Sciences, Professor,                of Engineering Sciences,              State Institute of International
difference between gases and vapours.                            Academician of the                  Professor, Gubkin Russian             Relations under the Ministry of
                                                                 Russian Academy of                  State University of Oil and           Foreign Affairs of the Russian

300 years ago
                                                                 Natural Sciences                    Gas (NRU)                             Federation

In 1720, the lamps were first installed to illuminate the                                              Publisher:
streets of St. Petersburg, by the decree of Peter the Great.                                           Neftegaz.RU Information
They would use hemp oil.                                                                               Agency LLC

200 years ago
                                                                 Director                                 Representative in the
                                                                 Olga Bakhtina                            European Union
                                                                                                                                                Technical support
                                                                                                          Victoria Gaiger
                                                                 Advertising department                                                         Andrey Vereykin
In 1820, the oil extracted in the state of Kentucky was          Dmitry Averyanov                         Customer service                      Sergey Pribytkin
                                                                 Denis Davydov
shipped to Europe. Thus, the American businessman Beatty                                                  Maria Korotkova                       Eugeny Sukalov

                                                                                                                                                                                ADS
                                                                 Ekaterina Romanova
was the first to start the production of oil in North America.   Olga Shcherbakova                        Exhibitions, conferences,
                                                                 Valentina Gorbunova                      distribution                          pr@neftegaz.ru

100 years ago                                                    Andrey Toschev-Vasilyev                  Sofia Egorova                         Tel.: +7 (495) 650-14-82

In 1920, oil fields in Russia were nationalised. The             Neftegaz.RU business magazine                         Editorial office address:
Nobel brothers sold a significant portion of their Russian       registered by the Federal Service for                 127006, Moscow, Tverskaya str., 18,
assets to Standard Oil. The company was against the              Supervision in the Sphere of Mass                     building 1, office 812
                                                                 Communications, Communications                        Tel. (495) 650-14-82, 694-39-24
decision to nationalise, and refused to work with the Soviet     and Protection of Cultural Heritage                   www.neftegaz.ru
government.                                                      in 2007, certificate of registration                  e-mail: info@neftegaz.ru
                                                                 ПИ No.ФС77-46285                                      Subscription index МАП11407

In   10 years                                                    Reproduction of materials from Neftegaz.RU is impossible without the written permission of the editor-
                                                                 in-chief. The editors are not responsible for the reliability of information published in advertisements, as
                                                                 well as for political, technological, economic and legal forecasts provided by analysts. The responsibility
In 2030, Alberta's bituminous sands will produce 5 million       for investment decisions made after reading the magazine, borne by the investor.

barrels per day.

     20 years
                                                                 Printed in the printing house
                                                                 "MEDIACOLOR"
In
In 2040, global oil productions will reach their peak.           Claimed circulation
                                                                 8,000 copies
OIL IN THE 21ST CENTURY - EVOLUTION OF OIL AND GAS TECHNOLOGY RUSSIAN FUEL AND ENERGY SECTOR: DIGITISING - Neftegaz.RU
RUSSIA                                                                                                                                                                                                                                                                                                             RUSSIA
          main                                                                                                                                                                                                                                                                                                                 main

                               First human

                                                                                                                                                                                                                                                                                              Icebreaker

                                                                                                                                                                                                                                                                                                                                                  Interface
                                                                                                              Potter's

                                                                                                                                              Сamera
                                                                          Wheel

                                                                                                               wheel

                                                                                                                                                                                      Metro

                                                                                                                                                                                                                Car

                                                                                                                                                                                                                                                           TV
                        120,000                                       4,000                             2,600
                         years BC                                     years BC                          years BC                           1859                                1876                      1883                                     1941                                      1973

         200,000                             5,000                                3,000                                  1839                                           1863                  1879                    1923                                      1956                                                  2003
          years ago                          years BC                             years BC

                                                                                                                                                                                                                             Steam turbine
    STAGES OF

                                                                                                                                                                                                                                                                                                                             Cell phone
                                                                                                                                Sewerage
                                                        Use of fire

                                                                                                                                                                                                                                                                       Computer
                                                                                             language

                                                                                                                                                             Oil well
                                                                                              Written

                                                                                                                                                                                                 Phone
    TECHNOLOGICAL
    PROGRESS

    OIL                                                                                                                                                                                                                                      EVOLUTION FUEL
                                                                                                                                                                                                                                             AND ENERGY
                                                                                                                                                                                                                                             SECTOR

                                                                                                                                                                                                                                                                                               120,000
    in the 21st century

                                                                                                                                                                                                                                                                                                                                          Stoked with
                                                                                                                                                                                                                                                                                                           years BC

                                                                                                                                                                                                                                                                                                                                           firewood
                                                                                                                                                                                                                                                                                  year BC
                                                                                                                                                                                                                                             with coal

                                                                                                                                                                                                                                                                          1
    Anna Pavlikhina

                                                                                                                                                                                                                                              Stoked

                                                                                                                                                                                                                                                                                               20th century

                                                                                                                                                                                                                                                                                                                                          The use of oil
                                                                                                                                                                                                                                                                                                                                             as fuel
    The first adequately conscious human being appeared on

                                                                                                                                                                                                                                                                                                  Early
    our planet 200,000 years ago. Some 80,000 years later, his
    ancestors learned how to use fire. Another 70,000 years past,

                                                                                                                                                                                                                                                                          20th century
                                                                                                                                                                                                                                             Use of wind
    they crafted the bow and arrow, 66,000 years after that, they

                                                                                                                                                                                                                                               energy

                                                                                                                                                                                                                                                                             Mid-
    invented literacy, an invention that accelerated and made key
    changes throughout history. Since then evolution took an                                                                                         Battle              Battle
    adverse course in the Mesopotamian region, as this invention
    belongs to the ancestors of the ISIS savages who destroy                                                                                      for earth              for resources
    monuments of antiquity today, but otherwise, progress made
    seven-mile leaps: 5 thousand years passed from the invention of
    writing to the steam turbine, from the turbine to the automobile                                                                                                                                                                         technologies, Russia needs to supply it with gas. At some point
    – 250 years, from the first car to the cellular phone – 94 years,                                                                                                                                                                        this seemed normal. Today, on the other hand, this arrangement
    from the phone to cloud technologies – 30 years. You get the
    picture, progress is picking up pace.
                                                                                                                                                         Battle          Battle                                                              seems unviable. Manual labour is being replaced by robots,
                                                                                                                                                                                                                                             whilst crude oil by renewable energy sources.
    The energy sector is the steam locomotive of history, the steps                                                                                    for food          for ideas                                                           So why did declining oil prices become the economic highlight
    in its evolution are becoming more grandiose by the century. The                                                                                                                                                                         this spring? Because the age of carbohydrates will prevail very
    transition from wood to coal took mankind 120 thousand years,                                                                                                                                                                            long. Although, time does change their role. Instead of being an
    from coal to crude oil – 2 thousand years, from oil to gas it took                                                                                                                                                                       energy source, they can become the raw material for high-tech
    50 years, today, we're already using the energy generated by the                                                                                                                                                                         products. Now is the time to consider shifting to a new phase
    sun and the wind.                                                                                                                                                                                                                        that will grant us unlimited possibilities for the third millennium to
    What's our next step going to look like? The beginning of the                                                                                                                                                                            come.
    21st century marked a new era for the developement of various                                                                                                                                                                            In your hands, you hold the 100th edition since the establishment
    human activities, including oil and gas. It's evident, that in the                                                                                                                                                                       of the publication. Particularly the evenness of this figure has
    near future we can look forward to another revolutionary leap.                                                                                                                                                                           served as the motivation to an overall generalisation. In the
    Today, Russia takes on an important global role as the timely,                                                                                                                                                                           pages to follow, you will come across articles dedicated to novel
    high-quality energy carrier. Like they say, every profession                                                                                                                                                                             technologies as well as references to a world in the not-so-
    is crucial. We can disregard political views and economic                                                                                                                                                                                distant past. These comparisons presented in parallel with the
    aspects; as neither good or bad. For oil refineries to function,                                                                                                                                                                         rapidly changing present, provide the most vivid image of where
    thousands of Indian nationals manually assemble fine-grade                                                                                                                                                                               science is going to take us, as well as, where the key points of
    catalytic converters. For Germany to spend billions on R&D of                                                                                                                                                                            economic development will be centered.

6 ~ Neftegaz.RU [4]                                                                                                                                                                                                                                                                                                          [4] Neftegaz.RU ~ 7
OIL IN THE 21ST CENTURY - EVOLUTION OF OIL AND GAS TECHNOLOGY RUSSIAN FUEL AND ENERGY SECTOR: DIGITISING - Neftegaz.RU
RUSSIA
           main

    THE RUSSIAN
                                                                                                             ratings
    GOVERNMENT
    PURCHASED                                              The Russian government bought out Venezuelan assets of Rosneft
                                                           in exchange for the transfer of state-owned shares of the company,
    ROSNEFT'S                                              in the hope that the US will lift sanctions from Rosneft. How will this
                                                           affect the activities of Rosneft and the entire oil and gas complex of the
    VENEZUELAN                                             country?

    ASSETS                                                   The Russian government bought out
                                                             Venezuelan assets of Rosneft..
                                                             What to expect?
    Rosneft has signed an agreement with the
    company, which belongs entirely to the Russian            16 %
    government, to cease its operations and sell its
                                                              Venezuelan oil and gas control makes Russia a super-
    stake in all Venezuelan projects.                         influential oil and gas country
    The name of the purchasing company was
    never mentioned, but on the day when Rosneft              30 %
    left Venezuela, Rosimuschestvo established                The USA also wants to control Venezuelan oil, now a
    Roszarubezhneft with a Cap of 323 billion                 conflict between the US and Russian authorities may
    rubles. Presumably, Rosneft's Venezuelan                  happen
    assets were transferred to this company.
    The top three leaders in oil production have not          13 %
    changed for many years: Russia, Saudi Arabia,             US imposed sanctions against Rosneft "for work in the oil
                                                              sector of Venezuela", now sanctions should be lifted
    and the USA, moreover, the United States has
    practically doubled its oil production in the past
    10 years. Amid the growing influence of the               42 %
    US in terms of oil, control over Venezuelan oil           This is a signal for foreign partners that all work is being
    and gas automatically makes Russia a super                transferred under the control and reliable protection of the
                                                              Russian government - and not only for existing assets
    powerful oil and gas country. Together, Russia,
    Iran and Venezuela would be able to control the
    oil market.
    While Russia has been the leader in oil                D. Trump signed a decree on the right of the United States to use
    production among this informal union,                  the resources of the moon. The USA does not consider space as
    Venezuela leads the way in terms of oil reserve        a “global commons” and believes that it can conduct any activity
    volumes. Venezuelan oil reserves amount to             outside the Earth without additional international agreements
    298.4 billion barrels! Iran – 157.8 billion barrels,
    Russia – 80 billion barrels. By controlling              Can the Americans arrogate to themselves
    approximately 33% of global oil reserves, the
    informal alliance could be a very powerful force.
                                                             the Moon?
    The deal is aimed at getting Rosneft out of               29 %
    harm's way. On February 18, 2020 the U.S.                 Yes, if they conquer the territory before China
    Treasury Department imposed sanctions
    against Rosneft Trading, a subsidiary of                  16 %
    Rosneft.
                                                              No, the natural satellite belongs to all humanity
    The sanction was imposed "for operating in the
    oil sector of the Venezuelan economy".                    12 %
    The American authorities accused the company              Yes, if after the development they prepare the military space
    of supplying oil from the country to foreign              fleet
    markets. Rosneft shifted Venezuelan oil
    exports to another subsidiary, TNK Trading                23 %
    International, however, sanctions were imposed            No, by resolution of the UN General Assembly, the Moon is not
    against it as well. The US Treasury Department            subject to national appropriation
    stressed that the restrictive measures would
    be lifted when the company takes concrete,                15 %
    tangible and verifiable actions. Rosneft                  Yes, the USA knows how to interpret laws to their advantage
    now patiently waits for sanctions imposed
    against it to be lifted. On top of that, Russia's         5%
    shift into Venezuela does not mitigate the
                                                              No, Trump’s order alone is not enough.” Extraction of minerals
    situation. Previously, if the U.S. authorities            on the moon is a complex process, one state cannot manage it
    imposed sanctions against companies, how
    will sanctions against the Russian government
    be imposed?

8 ~ Neftegaz.RU [4]
OIL IN THE 21ST CENTURY - EVOLUTION OF OIL AND GAS TECHNOLOGY RUSSIAN FUEL AND ENERGY SECTOR: DIGITISING - Neftegaz.RU
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                                                                                                                                  # 4/2020

                                                                                                                                                          BUSINESS-ACCENT
BUSINESS-ACCENT

                  THE EVOLUTION
                                     RUSSIA HAS ENTERED THE NEW CENTURY AS A WORLD LEADER IN OIL AND GAS RESERVES. HOWEVER,
                                     AFTER THE COLLAPSE OF THE “NINETIES”, THE INDUSTRY LOST MANY OF THE COMPETENCIES ACCUMULATED
                                     DURING THE SOVIET PERIOD, AND RUSSIAN COMPANIES WERE “CATCHING UP”. THE NEW ERA ALMOST
                                     DID NOT GIVE TIME FOR A QUIET DEVELOPMENT. ON THE ONE HAND – UNFORESEEN TECHNOLOGICAL
                                     OPPORTUNITIES, ON THE OTHER - CHANGING MARKET CONDITIONS, STIFF GLOBAL COMPETITION,
                                     AND ESSENTIALLY, THE REDUCTION OF HYDROCARBON RESOURCES. THE CUMBERSOME AND –

                  OF OIL AND GAS
                                     AS IS CONSIDERED – CONSERVATIVE INDUSTRY MUST ADAPT TO NEW CONDITIONS

                                     Same for all                                               FACTS
                                                                                                                 pandemic, which resulted world oil
                                                                                                                 and gas consumption in a “free fall,"
                                     The globalization of markets, including energy,                             the consequences of which are not

                  TECHNOLOGY                                                                          30
                                     has become the leading trend of the 21st century.                           yet entirely predictable.
                                     Thanks to the development of technology, transport,
                                     communications, local and regional oil and gas markets                            The Age of Hard
                                     are increasingly removing borders. At the same time,       For              years Recoverable Oil
                                     international cooperation is increasing: complex oil       enough oil in Russia
                                     and gas projects, as a rule, require a large number of     and enough gas   Domestically, Russian oil and gas
                                                                                                for 50 years
                                     participants, often from different countries.                               industry faced a reduced availability.
                                     At the same time, competition between the oil and gas                       According to the estimates of the
                                     producing countries is getting tougher. Over the past                       Ministry of Energy, Russia will have
                  Irina Gerasimova                                                                               enough oil for at least 30 years, and
                                     two decades, Russia has been cultivating its traditional
                                     sales markets, and is also fighting for new ones –                          gas for 50 years. But at the same
                                     primarily China and other Asia-Pacific countries.                           time, the raw material base, mainly
                                                                                                                 for oil, is deteriorating.
                                     Two powerful pipelines were built to supply oil and gas
                                     to the Celestial Empire: ESPO and Power of Siberia.                         In the key region for the domestic
                                     At the same time, gas transmission capacities in                            "oil industry" – Western Siberia in
                                     the western direction were increased (Nord Stream                           2008-2018 production dropped by
                                     and subsequent Gazprom projects). New oil loading                           10%, although drilling meterage
                                     terminals (Ust-Luga, Kozmino and others) were built.                        grew. Over the past ten years, the
                                     Russian Gazprom and NOVATEK began to produce                                production rate of new wells in the
                                     and supply liquefied natural gas (LNG) to international                     region dropped by an average of
                                     markets.                                                                    34%, and watering increased from
                                                                                                                 33% to 50% (data from the Ministry
                                     An important challenge was the American "Shale                              of Energy).
                                     Revolution", which turned the United States from
                                     an exporter into a net importer of gas and seriously                        For new reserves, oil companies
                                     redefined the energy market. Consumer countries                             have to move to uninhabited regions
                                     got the opportunity to conclude contracts on more                           with extremely harsh climates in the
                                     favorable terms (which is not in Gazprom’s favor), spot                     north and east of the country. Until
                                     trading volumes of “blue fuel” began to grow.                               2014, high hopes were pinned on
                                                                                                                 offshore production, including in
                                     In the competition between hydrocarbon suppliers,                           the Arctic, but drop in oil prices and
                                     tough measures are used: price wars, sanctions                              sanctions forced to push a number of
                                     and restrictions. Thus, the sanctions of the United                         planned projects "to the back of the
                                     States and the EU introduced in 2014 limited the                            drawer". Production in the Arctic is
                                     access of Russian oil and gas companies to Western                          conducted only at the Gazprom Neft
                                     technologies and capital markets and, as a result,                          Prirazlomnoye field.
                                     undermined a number of important projects for the
                                                                                                                 However, production continues on
                                     Russian Federation – in particular, on the development
                                                                                                                 three offshore projects off the coast
                                     of the Arctic shelf.
                                                                                                                 of Sakhalin. There are major new
                                     A positive point: sanctions stimulate Russian                               discoveries: the Neptune and Triton
                                     companies and their partners to develop their                               fields of Gazprom Neft in the Sea of
                                     technologies, equipment, and software. If this problem                      Okhotsk, and the Pobeda of Rosneft
                                     is successfully solved, Russia in the global energy                         in Kara Sea. LUKOIL operates in the
                                     market will also be able to assume the role of leading                      Baltic and the Caspian Sea.
                                     source of innovation, and not just supplier of raw
                                                                                                                 A certain "margin of safety" is
                                     materials.
                                                                                                                 retained by traditional areas of
                                     Globalization also strengthens the dependence of all its                    oil production. Oil workers are
                                     participants on each other and does have many threats                       trying to support oil production
                                     in common. The most striking example is the COVID-19                        by increasing oil recovery at

     10                                                                                                                                                       11
OIL IN THE 21ST CENTURY - EVOLUTION OF OIL AND GAS TECHNOLOGY RUSSIAN FUEL AND ENERGY SECTOR: DIGITISING - Neftegaz.RU
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                                                                                                                                                                                                                                                      # 4/2020

                                                                                                                                                                                                                                                                              BUSINESS-ACCENT
BUSINESS-ACCENT
                  Brownfields, introducing the remaining deposits, as                                   new samples of domestic drilling                                                                                             Russia has every chance in
                  well as engaging in the development of unconventional       FACTS                     equipment, etc. are being                                                                                                    ten years to become one of the
                  reserves: the Bazhenov and Tyumen Formations, the                                     developed.                                                                                                                   three leaders in gas liquefaction.
                  Achim deposit, and bitumen oil. This gives a definite
                  result. So, in the Khanty-Mansi Autonomous Area-            Hydraulic                 Intellectualization and
                                                                                                                                                                                                                                     However, the Americans believe
                                                                                                                                                                                                                                     that Qatar and the USA will still

                                                                              fracturing
                  Yugra (42 % of Russian oil production in 2019), over                                                                                                                                                               remain ahead.
                  the past two years they have managed to stabilize oil                                 digitalization
                  production at the level of 235 – 236 million tons.
                                                                              it is used to increase    The last decade in the domestic                                                                                              «Green» future
                  Hard-to-recover reserves (TRIZ) should be mentioned         oil recovery, the         oil and gas industry has been
                                                                              development of                                                                                                                                         In parallel with the depletion of
                  separately. According to estimates by the Ministry of                                 marked by the active introduction of
                                                                              unconventional                                                                                                                                         hydrocarbon reserves in the
                  Energy, the share of such in the overall structure of oil   deposits of the           «smart» technologies. Drilling and
                                                                                                                                                                                                                                     world, the trend towards the use
                  reserves reaches 65%. At the same time, production          Achimov strata, the       exploitation of the same multilateral
                                                                              Tyumen and Bazhenov                                                                                                                                    of environmentally friendly fuels of
                  from unconventional deposits is growing all over the                                  or ultra-long horizontal wells would
                                                                              formations                                                                                                                                             renewable energy sources (RES)
                  world, and it is another important industry trend. In                                 not have been possible without high-
                                                                                                                                                                                                                                     is intensifying.
                  Russia, TRIZ accounts for about 7% of production,                                     tech equipment, numerous sensors,
                  but the largest companies are working on technologies
                  that will increase production.
                                                                              Digitalization            and specialized software that
                                                                                                        continuously collects and interprets
                                                                                                                                                                                                                                     So far, oil has a leading share in the
                                                                                                                                                                                                                                     overall structure of global energy
                                                                              increase the efficiency
                                                                              of production
                                                                                                        data.                                                                                                                        demand with a share of 31.5 %,
                  A special focus is on the search for cost-effective ways    processes, allow more                                                                                                                                  and for gas – 23 %. According to
                  to develop the Bazhenov Formation; the extraction of                                  The first intellectual wells in Russia
                                                                              flexible and faster                                                                                                                                    forecasts by the IEA and OPEC,
                  this oil could give a “second wind” to Western Siberia.     response to market        were built in the second half of
                                                                              requirements and
                                                                                                                                                                                                                                     in 2040 oil and gas will be the main
                  Forecasts estimate the geological reserves of Bazhen                                  the “zero”. On the shelves and in
                                                                                                                                                                                                                                     types of fuel.
                  as huge – 18 – 60 billion tons. Gazprom Neft promises
                                                                              reduce company costs
                                                                                                        inaccessible areas, several “smart”       LNG Growth                                                 FACTS
                  to achieve profitable production next year. To date,                                  fields have been launched, equipped                                                                                          The share of new energy sources
                                                                                                                                                  The main factor dividing the gas market again is the

                                                                                                                                                                                                             LNG
                  the cost of producing a ton of Bazhenov oil has been                                  with minimal manning or automated                                                                                            (sun, wind, biomass and water,
                                                                                                                                                  global growth in LNG production and trade. According
                  reduced to 16 thousand rubles per tonne compared                                      technologies.                                                                                                                not counting the generation of
                                                                                                                                                  to BP, in 2018, 11% of global gas production was
                  to 30 thousand rubles per tonne in 2017.                                                                                                                                                                           hydroelectric power stations) in
                                                                                                        Digital technologies are widely           already directed to liquefaction. The Russian Ministry
                                                                                                                                                                                                                                     the global energy balance is still
                                                                                                        available throughout the oil and          of Energy expects that by 2025 the share of LNG in
                                                                                                                                                                                                                                     calculated in units of percent, but
                  New technologies for extracting oil                                                   gas industry - from exploration
                                                                                                        to marketing. “Digital” shows
                                                                                                                                                  the total trade in “blue fuel” will increase to 51%, and
                                                                                                                                                  by 2040 – to 70%, as a result of which the world gas       share                   many forecasts indicate future
                                                                                                                                                                                                                                     growth. Thus, the IEA believes that
                  It has become possible to implement many complex                                      high efficiency in geological             market will become globalized.                             in total gas trade
                                                                                                                                                                                                                                     the total capacity of alternative
                  upstream projects through the introduction of                                         exploration (for example, Gazprom                                                                    by 2040 will increase
                                                                                                                                                  Today, market leaders are Qatar, Australia, Norway,        to 70%                  energy carriers in the world will
                  advanced technologies. A special role in the last                                     Net, based on the results of
                                                                                                                                                  Canada, Russia and the United States. So far, the                                  increase by 50 % by 2024.
                  decade in production has been played by horizontal                                    digital processing of geodetic,
                                                                                                                                                  Russian Federation has two large-capacity gas
                  drilling and hydraulic fracturing. Both technologies                                  has found new hydrocarbon                                                                                                    Preparing in advance for the end
                                                                                                                                                  liquefaction plants – a plant under the Sakhalin-2
                  were borrowed in the West, although similar                                           reservoirs in Vyngapur). Actively                                                                                            of the "oil" era, the largest oil and
                                                                                                                                                  project (controlled by Gazprom) and Yamal LNG
                  operations were carried out in the USSR.                                              promoting automation, and now                                                                                                gas companies in the world in
                                                                                                                                                  (NOVATEK).
                                                                                                        digital technology are used in oil                                                                                           recent years have been increasing
                  According to last year's Deloitte study, in 2013 – 2018
                                                                                                        processing. Advanced technologies         In the next 15 years, to become one of the three                                   investments in alternative energy.
                  the share of horizontal drilling in the Russian oil
                                                                                                        are “entrusted” with safety control,      leaders in LNG supplies is the task set for Russian                                First of all, these are the European
                  industry grew from 21 % to 48 %. Further growth is
                                                                                                        selection of the optimal operating        companies. “One of the goals of the energy strategy                                Shell, Total, ENI, BP and Equinor
                  projected for the future.
                                                                                                        mode of equipment, etc. The               is to develop LNG production and increase Russia's                                 (the latter abandoned its former
                  Today, oil workers are building technologically                                       protection of pipelines and other         share in world markets from 8 % to 15 – 20 %. Our                                  name Statoil largely due to the
                  sophisticated wells with two or more completions,                                     objects is increasingly entrusted to      capacities already reach 30 million tons, by 2035                                  “change of course”). By 2030,
                  including fishbone-type wells. For the shelf, wells are                               drones and special systems. In the        we can already reach production from 80 to 140                                     investments in renewable energy
                  drilled with an extra-long deviation from the vertical,                               field of marketing, electronic services   million tons per year,”said Russian Minister of Energy                             can take up to 20% of the total
                  allowing underwater production from the shore.                                        are being developed for company           Alexander Novak on the air of Russia 24 channel in                                 investment of the world's largest
                  Hydraulic fracturing is being used more and more                                      customers.                                early April.                                                                       oil and gas companies, predicts
                  often, although seven years ago, President Vladimir                                                                                                                                                                KPMG.
                                                                                                        The next step is the transition from      This will be possible after the launch of new plants
                  Putin called hydraulic fracturing “a rather barbaric
                                                                                                        selected “smart” technologies to          that are going to build "NOVATEK", "Gazprom"                                       Russian players are also involved
                  way” – because of environmental damage. High-speed
                                                                                                        full-scale digitalization of companies    and "Rosneft". NOVATEK is the closest to the                                       in renewable energy, but so far not
                  and high-volume hydraulic fracturing operations,
                                                                                                        “from the well to the gas nozzle”, and    implementation of Arctic LNG-2. It is important                                    particularly active. Most often we
                  multi-stage (up to 30 stages) are under way, and
                                                                                                        then the whole industry. It is believed   that companies will work on Russian liquefaction                                   are talking about the use of solar
                  the technology of repeated multi-fracturing is being
                                                                                                        that digitalization will increase the     technologies (existing plants operate on Western ones).                            panels and wind turbines for energy
                  developed.
                                                                                                        efficiency of production processes,                                                                                          supply of company facilities. The
                                                                                                                                                  According to last year’s forecast by the Center for
                  Hydraulic fracturing (usually in combination with                                     allow a more flexible and faster                                                                                             largest projects are located abroad.
                                                                                                                                                  Strategic and International Studies in Washington,
                  horizontal drilling) is actively used to increase                                     response to market requirements,                                                                                             So, LUKOIL owns several photo
                                                                                                                                                  Russia has every chance in ten years to become one
                  oil recovery, as well as the development of                                           and, ultimately, reduce the costs of                                                                                         and wind-operated power plants
                                                                                                                                                  of the three leaders in gas liquefaction. However, the
                  unconventional deposits of the Achimov strata, the                                    companies. In addition, digitalization                                                                                       in Romania and Bulgaria. The
                                                                                                                                                  Americans believe that Qatar and the USA will be
                  Tyumen and Bazhenov Formations. At the same                                           will increase the transparency                                                                                               company’s website explains that
                                                                                                                                                  ahead of it.
                  time, oil and gas and service companies form their                                    and manageability of the industry.                                                                                           they are using “favorable conditions
                  own approaches. The most effective compositions                                       However, this will require companies      According to last year’s forecast by the Center for                                in countries where the state
                  of fluids, reagents, and cements are being selected;                                  to transform their entire business.       Strategic and International Studies in Washington,                                 provides support in this area”.

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    RUSSIAN FUEL
                                                          DIGITALISATION HAS BECOME ONE OF THE MAIN TRENDS IN DEVELOPMENT OF
                                                          THE SOCIETY THAT IS STANDING AT THE THRESHOLD OF THE SIXTH TECHNO-
                                                          ECONOMIC PARADIGM. ENTERPRISES OF THE FUEL AND ENERGY SECTOR TEND
                                                          TO BECOME HIGHLY ENGAGED IN IMPLEMENTING DIGITAL SOLUTIONS IN THEIR
                                                          PRODUCTION PROCESSES AND THUS ARE ON THE CUTTING EDGE OF THE
                                                          TECHNOLOGICAL KNOW-HOW. MIKHAIL NASIBULIN, HEAD OF DIGITAL ECONOMY

    AND ENERGY
                                                          PROJECTS DEPARTMENT OF THE MINISTRY FOR DIGITAL DEVELOPMENT,
                                                          COMMUNICATIONS AND MASS MEDIA OF THE RUSSIAN FEDERATION, HAS
                           Mikhail Nasibulin              TOLD US HOW ENTERPRISES OF THE FUEL AND ENERGY SECTOR ARE BEING
                           Head of Digital Economy        DIGITALISED
                           Projects Department of
                           Ministry for Digital           K e y w o r d s : digital technologies, national project, software products, Ministry of digital
                           Development,                   development, communications and mass communications, information technologies.

    SECTOR:
                           Communications and
                           Mass Media of the Russian
                           Federation

                          – Mikhail Mikhailovich, it was at the end of 2018                                                   Secondly, lack of the necessary
                          when the Digital Economy National Program was                          FACTS                        statutory and regulatory foundation
                          approved. What kind of potential does it hold for                                                   under digital economy in Russia is

    DIGITISING                                                                                   5.3
                          digitising oil and gas industry and what is being                                                   still a certain hindrance and does
                          prioritised?                                                                                        not allow to regulate it effectively.
                                                                                                                              As the state, we should set
                          – Overall, when it comes to oil and gas industry,                                                   ultimately clear and transparent
                          digitalisation normally goes in two directions: first,
                          oil field exploration and development, and second,
                                                                                                 billion USD                  rules for all market players. A lot of
                                                                                                 is the figure of export of   work is being done in this sphere
                          oil and gas processing and transportation. Most                        IT services from Russia      within a corresponding federal
                          commonly, digital transformation within these two                      in 2018
                                                                                                                              project called "Statutory regulation
                          directions is related to implementing technologies of                                               of the digital environment".
                          predictive analytics, introducing support systems for
                          executive decision-making and using digital models                                                  Thirdly, the level of competitiveness
                          and digital twins.                                                                                  of the Russian digital solutions is
                                                                                                                              rather low, and consequently, our
                          This work is given support within particular federal                                                market depends considerably on
                          projects of the Digital Economy National Program.                                                   foreign products.
                          For example, the Digital Technology Federal Project
                          allows for development of indigenous Russian                                                        – Fair enough, Russia doesn't
                          solutions based on "end-to-end" digital technologies                                                serve as a benchmark in the
                          – artificial intelligence, virtual and augmented reality                                            area of digital technology. Where
                          technology, robotics and sensorics, and many others.                                                exactly do you think Russian
                          As part of another federal project, "Information                                                    software products are placed
                          Infrastructure", a global system of transmitting,                                                   in the global market? How
                          processing and storing data is being developed, and                                                 competitive is the industry?
                          it can be also used by enterprises in the industry.
                                                                                                                              – Unfortunately, Russia is not yet
                          – What are the main obstacles in developing                                                         among the leaders in the global
                          digital economy, which you have to face?                                                            IT sphere because the share of
                                                                                                                              Russian companies in the world
                          – They can be divided in three main categories.
                                                                                                                              market is relatively small. In
                          First of all, Russian companies which operate within                                                2019, the Analytical Centre for
                          traditional economic sectors generally show little or                                               the Government of the Russian
                          no interest in implementing digital technology. One                                                 Federation conducted a survey
                          of the crucial tasks set before us in this sphere is                                                of market actors to define main
                          to develop some efficient schemes of stimulating                                                    problems and priorities in terms
                          demand for digital solutions on the part of industrial                                              of digital transformation of the
                          players. Some initial steps were made in this direction                                             Russian fuel and energy sector.
                          last year on the part of publicly owned companies –                                                 Participants mentioned high import
                          today, they are working on their personal strategies of                                             dependency from server resources
                          digital technology development.                                                                     and software.

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      At the same time, our country has been steadily on                                     the oil sector to monitor and keep                                                                                     on conditions, supporting
      the rise in the global ICT market over the last years       FACTS                      track of oil and gas production.                                                                                       measures, preferences,
      against several indicators. According to the Analytical                                                                                                                                                       promotion schemes and so

                                                                  8.4
      Centre for the Government of the Russian Federation,                                   – Bearing in mind these                                                                                                forth?
      export of IT services from Russia accounted to 5.3                                     successful projects, how
      billion USD in 2018, and it is twice as high as the level                              dependent is Russia from                                                                                               – Apart from the above-mentioned
      of 2010 and 13% more than the amount of service                                %       foreign-made digital technologies                                                                                      measures aiming at improved
      export in 2017. A share of ICT services in the Russian                                 and are there areas where this                                                                                         import substitution of digital
                                                                  is a percentage share
      overall export has risen significantly: from 5.3% in        of ICT services in         dependency is close to full, in                                                                                        solutions, one can indicate granting
      2010 to 8.1% in 2018; in the first half of 2019, it was
                                                                  Russian total service
                                                                                             the fuel and energy sector in                                                                                          money on development of software
                                                                  export in the first half
      as high as 8.4%.                                            of 2019                    particular?                                                                                                            and technological proposals for
                                                                                                                                                                                                                    creating national information
      – What kind of interaction exists between the                                          – Industry experts estimate that                                                                                       resources by means of distributed
      Ministry for Digital Development, Communications                                       dependency from foreign-made                                                                                           ledger technology. In addition, we
      and Mass Media and the Ministry of Energy of the                                       software products in the oil and                                                                                       launched a program on supporting
      Russian Federation in digitising the oil and gas                                       gas sector is around 80 to 90 per                                                                                      measures for "end-to-end" digital
      industry? What are areas of their common interest                                      cent. At the same time, the volume                                                                                     technology in 2019. Start-ups and
      and mechanisms for cooperation?                                                        of indigenous Russian software                                                                                         large companies which are involved
                                                                                             in the energy sector accounts for                                                                                      in developing their own software
                                                                                                                                     in such categories as legal information systems
      – Of course, we are doing a lot of work together to                                    286 billion roubles while an annual                                                              FACTS                 and innovating the existing one
                                                                                                                                     (99.9%), means of antivirus protection (99.8%) and
      bring in industry experts and have them orchestrate                                    growth rate is expected to fluctuate                                                                                   can get a subsidy and invest it in
                                                                                                                                     electronic workflow management systems (82%).

                                                                                                                                                                                              80-
      activities in the course of the national program. We                                   between 6 and 10 per cent.                                                                                             technological improvement. Five
      are now on track to establish an interministerial                                                                                                                                                             operators providing supporting
                                                                                             Our main goal for today is to reduce    – Electronic workflow and antivirus protection
      consultative body on digital transformation within                                                                                                                                                            measures announced contests,
                                                                                             dependency from import of digital       constitute a huge share of the software market.
      economic sectors of top priority and in social spheres,                                                                                                                                                       decided on the winners, and now
                                                                                             solutions in economic sectors. This     However, there are other market segments where

                                                                                                                                                                                              90
      including the energy sector. We are expecting that                                                                                                                                                            we are waiting for the realisation of
                                                                                             might become crucial against the        majors of the oil and gas industry prefer to work
      representatives of both concerned federal executive                                                                                                                                                           these projects. The contests were
                                                                                             background of threats to business       with foreign-made software. Do they switch
      authorities and industry experts will take part in its                                                                                                                                                        organised in six different disciplines:
                                                                                             continuity of many large companies      willingly to Russian-made products and does this
      work. Along with the Ministry of Energy of the Russian
      Federation, we are simultaneously working on a
                                                                                             that are of critical importance for     necessity really exist?                                                 %      • support of projects on design and
                                                                                             the Russian economy and lack                                                                                             commercialisation of software
      plan of action to digitally transform the energy sector                                                                        – In the Russian oil and gas industry, publicly-owned    is the figure
                                                                                             of adjusting-to-scale industrial                                                                 representing            products and digital platforms
      and on development of a method to evaluate digital                                                                             companies hold the top market share. Transition to
                                                                                             infrastructure to introduce and                                                                  dependency from
                                                                                                                                                                                                                      in manufacturing industry (RF
      changes in the industry.                                                                                                       using Russian-made software in these companies is        foreign software
                                                                                             implement solutions that have been                                                               products in the oil     Government Decree No. 529
                                                                                             made on the basis of new types of       slowed down because of some hindrances, which are        and gas industry
      – At present, do we have successfully realised                                                                                                                                                                  dated April 30, 2019, the operator
                                                                                             software and equipment.                 related to adopting Russian software products in the
      projects or projects under realisation to introduce                                                                                                                                                             is the Ministry of Industry and
                                                                                                                                     well-arranged technological processes and to the need
      indigenous Russian development results into                                            In 2016, in order to address                                                                                             Trade of the Russian Federation;
                                                                                                                                     of training specialists to work with the new software.
      enterprises of the oil and gas industry?                                               the problem, a definition of the                                                                                         a subsidy of up to 50 per
                                                                                             indigenous Russian software was         Decrees of the Government of the Russian Federation                              cent of the cost of a product
      – Of course, we do. As an example, I could give the                                    legislatively formalised, the unified   to bolster these processes and increase efficiency                               development);
      tNavigator software product by Rock Flow Dynamics                                      register of the Russian programs        of import substitution were adopted in at the end of
      LLC, which is used efficiently in more than 200                                                                                2018, and they suggest that publicly owned companies                           • support of projects on
                                                                                             for electronic computers and                                                                                             implementation of indigenous
      companies all around the world. The master module                                                                              develop corporate road maps for the period of 2018-
                                                                                             databases was created, and it                                                                                            Russian software in industries of
      of this product is a hydrodynamic simulator, which is                                                                          2020 to switch to using Russian-made software on a
                                                                                             includes more than 6,000 software                                                                                        top priority and potential and a
      used for modelling processes of field development.                                                                             large scale.
                                                                                             products divided in 24 categories.                                                                                       possibility of in-industry replicating
      Another example could be the Prime system by                                           Then Decree of the Government of        As of November 1, 2019, 35 out of 50 road maps to                                (RF Government Decree No. 555
      Yandex Terra. That is fully functioning Russian-made                                   the Russian Federation No. 1236         switch to predominant use of indigenous Russian                                  dated May 3, 2019, the operator is
      software to interpretively process 2D/3D/4D/3C/4C                                      dated November 16, 2015 was             software had been approved by publicly owned                                     Skolkovo Fund; maximum amount
      seismic data, which complies with all the requirements                                 adopted, which banns admission          companies. The Ministry of Communications of Russia                              of a subsidy is 1 billion roubles);
      for making up-to-date statements of work and                                           of foreign-made software for            orchestrates activity of publicly owned companies to
      includes a whole range of innovative algorithms to                                     public procurement. As a result, a      establish software testing centres, which are capable                          • support of projects on replicating
      solve geophysical tasks.                                                               purchase share of Russian-made          of determining different approaches to implementing                              regionally Russian-made solutions
                                                                                             software in the federal executive       indigenous Russian software within industries. A                                 of high social and economic
      Among Russian-made solutions for geological                                                                                                                                                                     importance for a territorial entity
                                                                                             authority and executive agencies of     preliminary review of the received action plans has
      modelling, we should highlight "Geoplat – Pro"                                                                                                                                                                  of the Russian Federation (RF
                                                                                             state power in constituent entities     shown that a purchase share of Russian-made
      (GridPointDynamic Company), the "Designer                                                                                                                                                                       Government Decree No. 550
                                                                                             increased from 25 to 65 per cent in     software in publicly owned companies increased by
      Geology" module of the tNavigator software package                                                                                                                                                              dated May 3, 2019, the operator is
                                                                                             the period between 2016 and 2018.       50.87 per cent in 2018.
      (by Rock Flow Dynamics LLC) and the "Sphere.                                                                                                                                                                    Russian Fund for Development of
                                                                                             The Ministry is currently monitoring
      Geology" module (NC DIT Delta).                                                                                                                                                                                 Information Technology (RFRIT);
                                                                                             data on import substitution in 2019.    – It is a considerable move. What other actions
      On top of that, indigenous Russian software from                                       We can see that Russian-made            does the Ministry take to develop the tech industry                              maximum amount of a subsidy is
      different developers is widely used by companies of                                    software is mainly used even today      in Russia? Could you give us some more details                                   1 billion roubles);

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      • support of R&D centres which carry out research                                demand? How could we get                 Again, I would like to emphasise that Russia is                                           Program, a national certification
        and development work aimed at achieving target          FACTS                  those markets interested?                one of the few countries which has its own R&D          FACTS                             centre, which will guarantee safe
        indicators in development of end-to-end digital                                                                         results in the area of search engines, social                                             operation of gadgets in the Russian

                                                                286                                                                                                                          2016,
        technologies (RF Government Decree No. 551                                     – On the whole, the volume of            networking and operational systems.                                                       Internet, is being established. The
        dated May 3, 2019, the operator is JSC "RVC";                                  foreign sales of Russian software                                                                                                  centre will provide TLS Certificates
                                                                                       companies is rising steadily. As         When playing globally, a particular attention
        maximum amount of a subsidy is 300 million                                                                                                                                                                        (trust certificates) for identification
                                                                                                                                should be paid to the developing markets of Latin
        roubles);                                                                      experts say, Russia managed to
                                                                                       achieve a volume of 10.5 billion         America, Africa, Asia and the Middle East, where        In                                of information resources, it will
      • support of Russian leading companies which              billion roubles        dollars following the results of         interest in Russian technology is historically high.    a definition of indigenous
                                                                                                                                                                                                                          also ensure work of citizens and
                                                                                                                                                                                        Russian software was              state authorities through security
        develop and commercialise indigenous Russian            is the volume of       the year 2018. Compared to the
                                                                Russian software
                                                                                                                                                                                        legislatively adopted, the        protocols supported by Russian
        solutions based on end-to-end digital technology                               previous year, it is a growth by 19      – When it comes to Russia, which industry is            unified register of the Russian
                                                                market in the energy                                                                                                                                      cryptographic algorithms. In the
        (RF Government Decree No. 549 dated May                 sector                 per cent.                                the most digitalised, from your point of view,          programs for electronic
                                                                                                                                                                                        computers and databases was       course of the federal project,
        3, 2019, the operator is JSC "RVC"; maximum                                                                             at the moment?                                          created and a ban on admission
                                                                                       Today's low market share of                                                                                                        the Centre for Public System of
        amount of a subsidy is 250 million roubles);                                                                                                                                    of foreign-made software
                                                                                       Russian suppliers is caused, to a        – The highest level of digitalisation is typical of     for public procurement was        Detection, Prevention and Relief
      • support of smaller enterprises which implement                                 certain extent, by problems while        ICT and financial sectors. These industries get         adopted                           of Consequences of Computer
        projects on design and commercialisation of                                    preparing the end product for selling    within touching distance of the world's level of                                          Attacks (GosSOPKA) is being
        end-to-end digital technology (RF Government                                   and marketing. Many companies are        digitalisation. The ICT sector (telecommunication,                                        made, as well as a cyber range,
        Decree No. 554 dated May 3, 2019, the operator is                              trying to introduce not end products     production of ICT equipment) is the key tool and                                          which will ensure information
        Innovation Promotion Fund; maximum amount of                                   but separate technical services and      basis for development of digital economy of the                                           security, prevent threats in the IT
        a subsidy is 5 million roubles under Start Program                             developments into foreign markets.       country. As experts say, the volume of gross                                              sphere and train professionals
        and 20 million roubles under Development                                       The competitiveness rate in foreign      added value within the sector rose to 2.4 trillion                                        to deal with modern practices of
        Program);                                                                      markets is traditionally high, and       roubles by 2018 (the growth by 20 per cent                                                information security. To cut things
                                                                                       if Russian companies do not have         compared to the year 2015). On the other hand,                                            short, key focus areas in terms of
      • complex projects in the area of end-to-end
                                                                                       a structured marketing policy to         the rate of financial technology proliferation in the                                     information security are related to
        digital technology have been supported through
                                                                                       promote their solutions, this results    country was 82 per cent in 2019. Digital banking                                          providing security of the Russian
        preferential loans since that year. This particular
                                                                                       in their attempts to frequently          became most widely developed, and the highest                                             Internet, personal data security and
        supporting measure has been highly rated by
                                                                                       become less successful.                  indicators are shown in the area of daily services                                        security analysis of cyber-physical
        market players; support will be provided during
                                                                                                                                (payment management, transactions, use of                                                 systems, including the Internet of
        several years and with participation of leading                                A systemic approach could help in
                                                                                                                                banking cards). I would like to make a specific                                           things.
        banks of Russia (RF Government Decree No.                                      solving this problem and increasing
        1598 dated December 5, 2019, the operators                                                                              mention that functionality of mobile applications of
                                                                                       recognisability, developing a                                                                                                      – How do you think the job
        are authorised banks; a discounted loan rate                                                                            the largest Russian banks is 1.5 or 2 times better
                                                                                       global brand and building of                                                                                                       market for specialists engaged
        for projects in the area of end-to-end digital                                                                          than the equivalent ones of European banks.
                                                                                       trust in products of Russian tech                                                                                                  in oil production will change?
        technology is from 1 to 5 per cent for a 6-year                                companies. The state has a special       As for industries of the Russian energy sector, the
        term).                                                                         focus on financial supporting            leading role is assigned to electric power industry,                                      – Implementation of new digital
      The system will be changed in 2020. For instance,                                measures, including project              which is due to particular characteristics of the                                         solutions influences the job
      another two supporting measures are brought into                                 financing, investments, preferential     industry operation. Digital technology is introduced                                      market significantly and sets new
      action starting this year – these are supporting                                 loans. Alongside financial               in all the segments of the industry (generation,                                          requirements to specialists in the
      measures on implementation of end-to-end digital                                 assistance, the state gives a sheer      transmission and distribution, as well as electric                                        industry and shapes new in-
      technology and platform solutions driven by                                      marketing support to companies –         power supply). In terms of speed of digital                                               demand professions.
      preferential finance lease (the operator is State                                support in sales, extending points of    technology implementation, the electric power                                             When it comes to the energy
      Transport Leasing Company) as well as a supporting                               presence abroad. In doing so, a new      industry is followed by the oil and gas industry in                                       sector, industrial automation,
      fund for direct investments in projects on end-to-end                            operator, JSC Rosinfocominvest,          Russia. In the context of constantly deteriorating                                        on the one hand, allows for
      digital technology development at the growth stage                               was established, and its goal is to      conditions for hydrocarbons production (share                                             downsizing a number of specialists
      (the operator is State Corporation Rosnanotech).                                 provide systemic support, promotion      growth of hard-to-recover reserves and reserves                                           of conventional professions; on the
                                                                                       and sales of Russian IT solutions        in remote territories), the use of digital technology                                     other hand, demand for specialists
      Besides, as part of the Digital Technology Federal
                                                                                       abroad. It focuses on systemic           is becoming an integral part of competitiveness                                           with digital competences, such as
      Project, the Ministry has come up with recommended
                                                                                       support of export of digital solutions   of an oil and gas company. Coal mining is the                                             big data analytics and processing,
      practice in digital transformation of publicly owned
                                                                                       and services via networking,             most conventional segment of the Russian energy                                           robotics, unmanned aerial vehicle
      companies, which was approved by the executive
                                                                                       formation of international               sector in terms of digital transformation. However,                                       exploitation, programming and
      committee of the Government Panel in December
                                                                                       assessment and analytics of top          digital technology is being implemented in coal                                           3D-modelling. As experts estimate,
      (the Government Panel on digital development, use
                                                                                       quality.                                 producers as well.                                                                        new occupations, such as UAV
      of information technology for improving the quality
      of life and conditions for entrepreneurial activities).                          Some companies in Russia have                                                                                                      operators for oil and gas field
                                                                                                                                – Issues of cybersecurity are quite sensitive                                             development, architects of robotic
      We hope that our recommendations help publicly                                   already achieved good results in
                                                                                                                                for large companies. What is done in this                                                 complexes and cyber devices,
      owned companies to build a foundation and prepare                                developing their brands in global
                                                                                                                                direction?                                                                                ecological analysts and others will
      strategic documents on digital transformation.                                   markets. In the first place, we
                                                                                       are talking here about Russian                                                                                                     appear in the oil and gas industry
                                                                                                                                – Main principles of information security are
      – Does the Ministry have any suggestions to                                      "Kaspersky's Antivirus" and Dr Web                                                                                                 over the next decade.
                                                                                                                                based on maximum self-sufficiency of information
      promote Russian tech companies into foreign                                      packages, solutions on InfoWatch         technology. Within the Information Security                                               The lack of industry specialists
      markets? Where could Russian R&D be in                                           cybersecurity, Group-IB products.        Federal Project of the Digital Economy National                                           causes a current delay in

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РОССИЯ
         DIGITALISATION

      realisation of digital transformation plans in the                               When it comes to the energy sector,
      energy sector, and it requires the Russian system      FACTS                     Russian developers are gradually
      to train skilled workers and to establish new                                    creating and implementing programs
      methodological, technical and organisational
      disciplines and opportunities in providing advanced    Russian-                  for process management of
                                                                                       exploration surveys, evaluation of oil
      development of workforce capacity in the oil and
      gas sector.                                            made                      and gas reserves, field development
                                                                                       and exploitation. The government

                                                             software
                                                                                       policy on import substitution
       In order to solve this problem, the "Workforce
                                                                                       corresponds to the increase in
      for Digital Economy" Federal Project, which is
                                                                                       Russian IT development, and some
      aimed at educational system improvements, job          is used in such spheres
                                                             as legal information      Russian-made software products are
      market transformation and citizens' inclusion in
                                                             systems (99.9%),          becoming prioritised for Russian oil
      development of the Russian digital economy.            means of antivirus
                                                                                       companies in the energy sector.
      The federal project focuses to a great extent on       protection (99.8%) and
                                                             electronic workflow
      increasing the population's E-literacy, training       management systems        To keep the positive dynamics of
      skilled workers and executives, who might be in        (82%)                     using Russian software products in
      charge of digital transformation of companies.                                   companies, the Ministry is doing its
                                                                                       best to give support to design and
      – The huge country of ours has settlements                                       implementation of digital technology
      and whole regions where there are no roads                                       in order to fundamentally re-think the
      or essential infrastructure, where gas is not                                    actual structure and transformation
      laid. Do you think Russia is generally ready for                                 of all business processes within the
      large-scale digitalisation or is it not the task for                             industry.
      the time being?
                                                                                       The successfully implemented
      – The Ministry is orchestrating works on providing                               measures on stimulating the Russian
      multi-purpose services to people. At the same                                    IT industry are as follows:
      time, more than 20 thousand settlements with                                     • advanced measures of
      a population of 100 to 250 people cannot get                                       government support for projects
      access to the up-to-date communication services.                                   that design and develop innovative
      The Ministry of Communications has elaborated                                      solutions in the area of digital
      corresponding amendments to the federal law                                        technology;
      "On Communication", and they suggest providing
      services in settlements with a population from 100                               • methodological recommendations
      people (not 250 people as it is now).                                              on digital transformation of
                                                                                         government-owned corporations
      This section of the Digital Economy National                                       and publicly owned companies that
      Program calls for activities to create stable                                      were approved on December12,
      and safe infrastructure for high-speed data                                        2019 by the executive committee
      transmission and processing, as well as storing                                    of the Government Panel on digital
      large amounts of data. According to target                                         development, use of information
      indicators, a share of households which have                                       technology for improving the
      broadband access to the Internet should be at                                      quality of life and conditions for
      least 97 per cent from the total quantity in 2024,                                 entrepreneurial activities;
      and a share of socially significant facilities of
      the infrastructure, that can be connected to the                                 • compiling unified register of the
      Internet, should be 100 per cent.                                                  Russian programs for electronic
                                                                                         computers and databases;
      – Digital technology is treading in leaps and                                    • adoption of the Decree on
      bounds, no one can easily copy or imitate                                          phased transition of government-
      technology to match the spirit of times; we                                        owned companies to the use of
      must be well ahead of our competitors. What                                        indigenous Russian software.
      do you think the chances of the Russian tech
      industry are to take up a position that will allow                               In such a case, the Ministry is
      Russian software products to be of top priority                                  carrying out activities along with
      for leading Russian and global companies?                                        its field-oriented federal executive
                                                                                       authority, Ministry of Energy of the
      – Russia already has its own competitive software                                Russian Federation. These activities
      products, that can be applied by companies in                                    are aimed at implementing new
      different economic sectors – these are accounting                                financial and non-financial measures
      and information systems, engineering and                                         to support significant projects in the
      telecommunication solutions.                                                     industry.

20 ~ Neftegaz.RU [4]
РОССИЯ
            DIGITALISATION                                                                                                                                                                                                                              DIGITALISATION

                                                                                                                                                                fact that an increase in the scale       due to the absence of readily           fight corruption, and contributes to
                                                                                                                                                                of government orders requires            available qualified employees.          corporate security. A necessary
                                                                                                                                                                impartiality in choosing a particular    Providing consulting services           condition for increasing the
                                                                                                                                                                company as a supplier or contractor.     during preparation of international     effectiveness of international
                                                                                                                                                                The world trade practice knows           competitive tenders is of great         trade is the modernisation of the
                                                                                                                                                                cases when issued government             importance for suppliers who            regulatory framework, including the
                                                                                                                                                                contracts bypassed the bidding,          are taking the first steps towards      government procurement law [3].

    INTERNATIONAL                                                                                                                                               which led to serious economic and
                                                                                                                                                                political consequences. Recently,
                                                                                                                                                                a lot of decisions have been made
                                                                                                                                                                                                         entering the market. Experienced
                                                                                                                                                                                                         professionals provide assistance at
                                                                                                                                                                                                         the stage of preparation for bidding
                                                                                                                                                                                                                                                 In the modern economy, the
                                                                                                                                                                                                                                                 state acts as the largest buyer
                                                                                                                                                                                                                                                 and consumer of products all

    BIDDING AND CORPORATE
                                                                                                                                                                to improve the contract system in        or provide comprehensive support
                                                                                                                                                                                                                                                 over different industries, which
                                                                                                                                                                Russia: amendments to the law            for the required period of time. This
                                                                                                                                                                                                                                                 allows turning state demand into
                                                                                                                                                                on the contract system have been         means providing legal services for
                                                                                                                                                                                                                                                 a powerful tool for regulating the

    SECURITY
                                                                                                                                                                made, competitive procedures             participating in auctions, tenders,
                                                                                                                                                                                                                                                 economy, influencing its dynamics
                                                                                                                                                                have been simplified, the time to        bidding or government procurement
                                                                                                                                                                                                                                                 and structure to achieve strategic
                                                                                                                                                                carry them out has been reduced,         contracts. Consulting firms also
                                                                                                                                                                                                                                                 goals of the country's development.
                                                                                                                                                                and additional barriers have been        provide legal support when the

    in the oil and gas sector
                                                                                                                                                                                                                                                 For example, the United States
                                                                                                                                                                created for dishonest participants.      company files a complaint about
                                                                                                                                                                                                                                                 experience showed that the
                                                                                                                                                                Nevertheless, it is necessary to         unlawful actions of the buyer or
                                                                                                                                                                                                                                                 government procurement system
                                                                                                                                                                constantly improve the efficiency        other structures related to bidding.
                                                                                                                                                                                                                                                 is one of the most important tools
                                                                                                                                                                and transparency of the ICB,
                                                                                                                                                                                                         In real situations, there are two       for stimulating the innovative
                                                                                                                                                                since trillions of rubles are spent
    THIS ARTICLE DISCUSSES THE DEVELOPMENT OF E-COMMERCE IN THE CONTEXT OF GLOBALIZATION.                                                                                                                options of consulting assistance        development of the American

                                                                                                                                                  UDC 303.725
                                                                                                                                                                on government procurement
    THE ADVANTAGES OF INTERNATIONAL COMPETITIVE BIDDING ARE CONSIDERED. THE ARTICLE                                                                                                                      for the duration of the ICB. First is   economy (the creation of the Silicon
                                                                                                                                                                annually. At the Russian Federation
                                                                                                                                                                                                         selective assistance at a certain       Valley). Therefore, it is important to
    ANALYZES THE TRENDS OF E-COMMERCE, SUCH AS CYBERSECURITY AT ENTERPRISES AND THE USE                                                                         Government meeting held on
                                                                                                                                                                                                         stage of bidding; second is             note that Russian small and medium
    OF CRYPTOCURRENCY IN INTERNATIONAL COMPETITIVE BIDDING. THE ARTICLE REVEALS THE MOST                                                                        September 26, 2019, changes
                                                                                                                                                                                                         comprehensive customer support          businesses develop formal tools that
    IMPORTANT ASPECTS OF THE PROCESS OF CORPORATE SECURITY IN MODERN CONDITIONS. TAKING                                                                         were discussed that would allow
                                                                                                                                                                                                         throughout the entire tender.           support and regulate international
    INTO ACCOUNT THE INDUSTRY FEATURES OF THE FUNCTIONING OF OIL AND GAS COMPANIES, THE MAIN                                                                    shutting down of the procurement
                                                                                                                                                                                                         Selective option implies either non-    trade and economic relations at a
    ELEMENTS OF THE STRATEGY FOR BUILDING A COMPREHENSIVE SYSTEM OF CORPORATE SECURITY OF                                                                       practice from a single supplier,
                                                                                                                                                                                                         recurring or permanent, but in any      very slow pace. Such tools include
    COMPANIES ARE FORMULATED AND ANALYZED                                                                                                                       when the tender is declared invalid.
                                                                                                                                                                                                         case it extends to the achievement      international bidding, opening up
                                                                                                                                                                It is known that dishonest buyers
                                                                                                                                                                                                         of one specific goal. For example,      new opportunities for expanding the
    K e y w o r d s: e-Commerce, globalization, international competitive bidding, cryptocurrency, digital economy, corporate security,                         often use such schemes to cut off
                                                                                                                                                                                                         the selection of a tender, assistance   sales market and forging economic
    information security, cyber security, cyber threats, Internet of things, oil and gas sector.                                                                competitors and leave "their own"
                                                                                                                                                                                                         in the application process, etc.        relations with foreign partners.
                                                                                                                                                                suppliers. That results in only one
                                                                                                                                                                                                         Comprehensive support implies           One of the reasons restraining the
                                                                                                                                                                company participating in a tender,
                                                                                                                                                                                                         assistance at all stages of bidding,    participation of Russian small and
                                                                                                                                                                and it is recognised as the winner,
                                                                                                                                                                                                         and its amount is determined by         medium businesses in international
                                                               nternational competitive                      components also often establish                    since the tender had previously
                                                                                                                                                                                                         the customer and their financial        trade and economic relations is
                                                               bidding (tenders) is a very                   their own internal rules for                       been declared invalid. Now such
                                                                                                                                                                                                         capabilities.                           the lack of their own resources
                                                               common tool of modern                         procurement and orders placing.                    cases will be assessed by the
                                                                                                                                                                                                                                                 (human and material) to promote
                                                        international trade practiced by state               As the international practice of                   Federal Antimonopoly Service. And
                                                                                                                                                                                                                                                 their products on the international
                                                        and non-state organisations of both                  competitive bidding shows, the                     a contract can be drafted only after
                                                                                                                                                                                                                 rom that one can derive that    market. On the other hand, many
                                                        developed and new industrial and                     use of tenders leads to saving up                  its consent. These changes will
                                                                                                                                                                                                                 consulting services are the     organisational and bureaucratic
                                                        developing countries. Diplomatic                     to 40% of the planned funds and                    affect only the contracts the starting
                                                                                                                                                                                                                 most important area of ICB      structures created in recent
                                                        support for international competitive                contributes to corporate security,                 price of which is determined by the
                                                                                                                                                                                                         development. Now one can notice         years do not yet have sufficient
                                                        bidding (ICB) is provided mainly                     according to the author.                           government. And the procedure will
                                                                                                                                                                                                         the growing role of consulting
                                                        by developed countries. The                                                                             be clearly defined in the new law [1].
                                                                                                             International bidding is often                                                              services in the development of
    Aleksandr Zaharov                                   legislation of many countries in
                                                                                                             done for orders for contracts and                                                           international competitive bidding,
    Professor, Doctor of Economics,                     relation to government procurement                                                                                                               which is of great importance for the
                                                                                                                                                                                                                                                 1
                                                                                                                                                                                                                                                     http://government.ru/news/37945/.
    professor of the Department
                                                                                                             deliveries of a wide variety of goods,                    onsulting firms play an
                                                        establishes certain rules for this                                                                                                               development of small and medium
                                                                                                                                                                                                                                                 2
                                                                                                                                                                                                                                                     Zakharov A.N., Mirzoyan M.O. The role of
    of International and National                                                                            works and services – from unique                          important role in the ICB                                                     consulting companies in encouragement of
                                                        process. Financial institutions                                                                                                                  businesses, and it helps them with
    Economics,                                                                                               to widely used ones. For example,                         improvement. Tender                                                           foreign direct investment. Proceedings of 2017
                                                        also introduce certain rules for                                                                                                                 investment advice for foreign trade
    Academy for Foreign Trade                                                                                among the items of deals that were                 structures are used to invite
                                                                                                                                                                                                                                                     Tenth International Conference «Management
    of the Ministry of Economic                         procurement using funds issued                                                                                                                   activities [2].                             of Large-Scale System Development» (MLSD)
                                                                                                             featured at international bidding,                 specialists from consulting firms
    Development of Russia                               by them as loans. In particular,                                                                                                                                                             Russia, Moscow, V.A. Trapeznikov Institute of
                                                                                                             one can find such tenders as the                   for the process of preparing and         ICBs are a progressive form                 Control Sciences, October 2-4, 2017. V kollektivnoj
                                                        the procedures for purchasing
                                                                                                             supply of several packs of nails                   conducting tenders. Such an              of international trade that                 monografi i na ang. yazyke, indeksiruemom v
                                                        goods and drafting contracts for                                                                                                                                                             Scopus. https://www.scopus.com/record/display.
                                                                                                             as well as a turnkey construction                  approach to solving organisational       allows making the procurement
                                                        the contract works and services                                                                                                                                                              uri?eid=2-s2.0-85040541669&origin=resultslist&z
                                                                                                             project of the largest industrial and              tender problems is appropriate for       process more open, efficient and            one=contextBox.
                                                        established by the World Bank are
                                                                                                             civil facilities of our time.                      cases where the buyer company            economical. The ICB practice            3
                                                                                                                                                                                                                                                     Federal Law of April 5, 2013 No.44-FZ "On the
                                                        the most famous and widely used
                                                                                                                                                                                                         all over the world shows that               contract system in the field of procurement of
                                                        in the world. Large corporations                     The widespread international                       does not have a sufficient number
                                                                                                                                                                                                                                                     goods, work, services to meet state and municipal
                                                        dealing with dozens and hundreds                     competitive bidding in modern                      of employees, and staff expansion        this arrangement helps save                 needs" https://rg.ru/2013/04/12/goszakupki-dok.
                                                        of suppliers of raw materials and                    conditions is facilitated by the                   is impractical or impossible             budgetary funds and effectively             html.

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