The International Resource Journal: RusGasEngineering Group of Companies

RusGasEngineering Group of Companies
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admin on 13 November, 2009 06:12:00
 
The RusGazEngineering Group of Companies (RGE) was established over six years
ago and has grown from a small company of two people into a large enterprise
with more than eight hundred employees. The business of supplying process
equipment has evolved into turn-key field facilities construction and this
creative group of like-minded individuals has developed into a team, making
administrative decisions in compliance with ISO 9001 and ISO 14001.
The facilities, designed and constructed by RGE, are located in various
significant regions, for example in Yamal, in the Khanty-Mansiisk autonomous
district, in the South Federal district and in Eastern and Western Siberia. The
key Customers of RGE include Lukoil, Rosneft, Surgutneftegas, Gazprom, Novatek
and many other esteemed oil and gas companies.
The RGE Group is made up of the separate companies, each of which performs all
manner of work required for the execution of oil and gas field facilities
construction projects on a turn-key basis.
During its six year existence, RGE has successfully completed more than 30
projects and created a full-scale Design Institute and Engineering Bureau. Today
the group executes EPC (Engineering, Procurement, Construction & Commissioning)
contracts in accordance with international standards throughout the world.
RGE has affiliated branches and subsidiaries in Kazakhstan, Uzbekistan,
Turkmenistan, and the Ukraine. The Company also has offices in Gubkinskiy,
Bratsk, Krasnodar, Tumen and Stavropol.
RGE implements up-to date engineering technologies and cutting-edge equipment on
a global scale, and today has more than twenty patented technologies and working
models.
IRJ interviewed Ilshat Valiulin, Director General of of RusGazEngineering, to
find out more.
IRJ: Please introduce us to the RusGazEngineering Group of Companies. How did
the company manage to grow from two to 800 persons within such a relatively
short time? What is the current corporate structure of the Company?
RGE: Indeed, in the long run the companies that managed to offer Engineering,
Procurement, Construction & Commissioning turned out to be the most successful
in the marketplace.
Usually EPC counterparts were represented and in fact, still are, by
construction and installation organizations acting as EPC contractors. Such EPC
organizations using their own resources to execute construction and installation
work. However design, supply, set of works for the Automatic Process Control
System, start-up and commissioning are implemented by subcontractors.
We believe that construction and installation work should be a realization of
engineering solutions developed during the design stage. For this reason our
company lays emphasis on offering integrated solutions. The distinct advantage
of RusGazEngineering is that the companies that are included in the group, using
their own in-house resources, are able to implement process engineering. When
applied to oil and gas field project realization process engineering encompasses
following works:
-  Defining best technologies and complete integrated process equipment
designing;
-  General design both for the whole object and for separate positions;
- Arrangement and engineering monitoring of equipment production, supply and
field supervision for equipment at construction sites;
-  Design, production, supply and start-up and commissioning of Automatic
Process Control System software and hardware complex;
-  Start up and commissioning.
In other words, process engineering includes complete complexes of field
facility works with the exception for construction and installation work.
Construction and installation works for the company contracts are executed by
subcontractors in accordance with the terms and conditions of bidding between
regional organisations which specialise in different kinds of construction and
installation works.
Adopting such an approach has allowed us to:
- Effectively coordinate and manage works from one centre;
- Provide personal management for essential set of services connected with
design implementation for process equipment, automation and checkout;
- Standardise equipment and packaging;
- Separate process equipment supply from supply of equipment and materials which
are traditionally included into Contractor Supply;
- Optimise works execution terms and operating expenses;
- Move to effective professional management, because in this case Engineering
Company will hold all the technical data for the works;
- Reduce values at risk for EPC contractors and investment risk for customers.
It seems that this shift of emphasis from construction and installation work to
works that form process engineering is the reason for a relatively fast growth
of the company.
Our in-house specialists have long-term experience in the areas of designing,
design management, organisation of production, packaging, construction and
installation work, automation, start-up and commissioning, quality control
assurance, supply logistics, economics, finances, marketing in oil and gas
industry and related industries. A number of employees have academic degrees and
ranks, as well as diplomas and awards of various levels.
IRJ: What would you say is the key to the success of the RusGazEngineering
Group? What helps you to stay ahead of competitors in the field?
RGE: Just as with any other Company which has attained some significant
achievement in its sphere of activity, the key to success for our company is
personnel. Flexibility and active minds of top managers, combined with stress
tolerance, sociability and ability to react to changes of external circumstances
quickly and adequately. High professionalism and creativity of key
technicians.  Young specialists can be characterised by high working capacity,
trainability and desire to reach excellent qualitative indicators. All these
factors contributed to forming a necessary staff structure.
Besides the company management interest in personnel motivation, arrangement of
both internal and external trainings, provision of decent work conditions,
including investment into Company infrastructure (workplace arrangement, license
software, motor transport, working clothes, etc.) play a rather significant role
in the building of the current professional team.
Success in such a competitive business as the oil and gas field is likely to be
the result of prompt and accurate decision-making procedures, as well as
mobility and focusing on our customers specific needs.
Additionally, due to implementation of integrated coordination for our set of
services and using advanced methods of project management, it is possible to
optimise the execution terms of our work thanks to their structural
decomposition and further alignment.
The main specialisation of the activities of the RusGazEngineering Group is
construction of gas field and gas-condensate field facilities and associated
petroleum gas disposition facilities. However, appreciating the potential
product need for deeper conversion of raw hydrocarbons, the company has
significantly widened its scope of activities via several acquisitions of
science and research and design organisations, specialising in oil and gas
chemistry processes.
Since the RusGazEngineering Group is not affiliated with any specific oil and
gas company, we are able to work with all major independent gas producers. Our
main Customers are the JSC Oil Company ROSNEFT, JSC Lukoil, JSC NOVATEK, JSC
SURGUTNEFTEGAZ, LLC Oil and Gas Company ITERA.
The total turnover of the group was approximately USD$100 million in 2008. It is
expected that total turnover for 2009 will be on the same level.
IRJ: Please tell us more about the flagship projects your Company is currently
working on. Which of the finished projects do you consider to be the most
important and prominent in the history of RGE?
RGE: The most significant projects that are currently implemented by the company
are the projects that deal with field facilities construction of the Vankor Oil
Field, JSC Oil Company ROSNEFT. Actually all associated petroleum gas
disposition facilities are developed with the participation of the
RusGazEngineering Group of Companies. Works for development of the Vankor gas
field facilities include: facilities design, design, production and supply of
process equipment, works for Automatic Process Control System development,
design, production and supply of process modules for strategic module
implementation which provides reduction in terms of supply and minimisation of
installation works at the construction site.
The first significant project realised by the company was the set of works for
facilities development of the Nakhodka gas-condensate field, Lukoil – Western
Siberia JSC. In the course of project implementation the following works were
executed: design and supply of process equipment, design, production, supply and
equipment checkout of Automatic Process Control System, start-up and
commissioning and pilot production of the Complex Gas Treatment Unit and the Gas
Measuring Unit of the tied-in pipeline.
The first prominent project for JSC Oil Company ROSNEFT was the development of
the condensate stabilisation and treatment unit for the Tarasovskoe
gas-condensate field. Our company executed the full set of works, beginning with
the design and up to the unit commissioning.
A Complete list of implemented projects is available at the company’s website
www.rusgazen.ru
IRJ: Has the company been influenced by the global economic crisis? If yes, how
have you worked to overcome it?
RGE: Due to the effects of world financial crisis, large oil and gas companies
have been reducing the amount of financing and respectively investments into the
facilities development. Smaller companies cancelled most of their projects
altogether. Fortunately, we managed to escape any fall in the amount of works on
the signed contracts. However, the level of anticipated works on the forecasted
projects turned out to be significantly lower. As a result, planned sales volume
for 2009 decreased i.e. planned sales volume was USD$130 – $150 million, but
actually the total turnover will be circa USD$100 million.
In order to stay afloat in the tough conditions of the financial crisis our
company had to agree to minimise projects’ profitability, and even in some
cases to execute certain works at cost (on the break-even level).
However, it should be pointed out that there were no redundancies or salary cuts
– the crisis only proved our understanding of the need to form a mighty high
professional structure, hence strengthening our focus on employing
high-qualified staff and constant training of the existing employees. This
approach inevitably allows RGE to significantly increase the quality of the
implemented projects.
The Complex Integrated Quality Management System (CIQMS) was adopted across the
board of the companies within the RusGasEngineering Group which provides proper
quality controls of all the works and processes in place. The group has all the
necessary licenses covering the scope of its activities and is certified
according to the international standards ISO 9001:2000 and ISO 14001:2004. Inner
elements, vessels design and processes of self-design project have patents and
inventor’s certificates.
IRJ: Can you tell us about how the company deals with the industry Health and
Safety requirements? Which goals does your company set for itself in terms of
corporate social responsibility?
RGE: Due to the complex facilities development, beginning with the design
implemented by our company, all the basic requirements for industrial safety of
equipment and facilities as well as the requirements for the environmental
protection are considered during the design stage. We are currently working on:
- Industrial safety declaration;
- “Environmental protection” section (OOS);
- “Civil defence engineering measures and emergency situations prevention”
(EMCD and ES);
- Emergency response assistance plan (ERAP);
- all other necessary sections and documents.
Besides this, all the documentation development is implemented according to the
requirements of actual local procedures (GOST, branch standards, SNiP, ISCS,
ruling documents etc), and obviously all the developed documentation undergoes
confirmation and assessments in correspondent permissible organisations.
As related to corporate social responsibility, the company does the following:
- provides training program for the employees (program includes seminars,
trainings and certification, held by independent organisation, and also training
held by the company’s leading specialists within of so called in-house
education).
- provides corporate transportation for the employees to transport them from
place of living to work places.
- helps with rent and mortgages;
- provides delegated employees with the company uniform.
- strictly adheres to all necessary social security measures, required by the
Russian Federation Law, including medical insurance, retirement fund etc.
IRJ: Can you tell me about the Company’s strategy going forward? What are the
short and long-term goals for RGE?
RGE: Primarily the development concept of our company. Its long-term strategy is
aimed at intensifying production activity, including:
-  improving the quality and corporate project management system,
- introduction of its own scientific and technological developments and the
involvement   of to apply the newest technologies, to help optimise
Customers’ capital costs;
- organisational structure improvement;
- introduction of evaluation and employees motivation system;
- development of training system and further training;
- improving the system of training personnel reserve (continuity) of the number
of graduates;
- purchasing of new office equipment and licensed software;
-  implementation of projects for utilisation of oil sludge;
- research workshops organisation;
- in-house industrial engineering on «packaging» of compressor skids;
- measures on creation and/or purchasing (statutory funds participation) of new
productions business.
Strategic goals: The RusGasEngineering Group of Companies
As part of RGE’s advanced development plans, the company has a clear set of
strategies for the coming years:
2009 – 2010 - Integral growth strategy - Suggesting strong growth in RGE due
to the absorption of other market players and/or their assets. This is subject
to the continuing publication of the company's traditional product or service
(for example, core science research institutes, science and research design
institutes, assets in production: buildings, institutions, new plants).
2010 – 2011 - Intensive growth strategy – This will be adopted in the event
of a favourable position in the growing market and in the presence of
significant long-term competitive advantage or the impossibility of integral
growth (for example, involvement of personnel selection, quantitative growth).
2010 – 2013 – Diversified growth strategy - Dealing with the transition to
completely new activities both in the product and target market. It aims at
strengthening the market position, profit mark-up by expanding the range of
goods (for example, gas chemistry).
Additional strategy – Investment growth strategy – This is in the case of
the exhaustion of RGE’s own, or inability to, attract external resources for
growth while maintaining the independence of business. In this case the binding
factor is the preservation of the market potential of the company. Limitations
of growth can be financial, industrial, scientific, management, and competent
character (for example, joining the holdings, IPO, sale of business).