Oilfield Services Companies in Russia

2024

Structure of the Russian oilfield service market after the departure of foreign companies

The Russian oilfield service market is transforming against the background of the emerging geopolitical situation. The short-term interaction at the level of individual projects is replaced by models designed for a period of three years and including the exchange of assets and profits. This is stated in the review of the DRT group (formerly Deloitte in the Russian Federation), published in early March 2025.

At the end of 2024, more than 300 oilfield service companies operate in Russia, which belong to one of four categories: service divisions of VINK (vertically integrated oil companies), the largest Russian independent service companies (with annual revenues of over 10 billion rubles), current and former foreign service companies, as well as other Russian independent service companies. According to DRT estimates, the share of VINK-owned divisions in the structure of the oilfield service market will grow from 41% in 2023 to 55% in 2030. The largest Russian independent service companies are expected to strengthen their positions from 29% to 35%. At the same time, former foreign service companies, which occupied 16% of the industry in 2023, will completely curtail their activities by 2030. The share of other Russian independent service companies will decrease from 13% to 10%.

The authors of the study point to a number of difficulties that market participants face. These are, in particular, unfavorable macroeconomic factors: an increase in inflation, tax burden and the cost of borrowed capital, a shortage of personnel and the lack of prerequisites for increasing oil and condensate production.

Due to the deteriorating geopolitical environment, access to foreign technologies, including rotary-controlled systems, some production intensification tools and software, is limited. In addition, price competition in the open market increased, which led to a deterioration in the financial condition of many oilfield services companies and an acceleration of the consolidation process.^[1]

Launch of a plant for the production of equipment for oil well repair in Bashkiria

On November 12, 2024 Bashkiria , a plant for the production of tools for repairing oil wells was launched in. The project was implemented by the group of companies Burservice"," which specializes in technological support of oil and gas production enterprises. More here

2023

The Russian market for oil well construction and maintenance services grew by 13%, to a record 2.25 trillion rubles

At the end of 2023, the volume of the Russian market for services for the construction and maintenance of oil wells reached 2.25 trillion rubles, which is a record figure. For comparison, in 2022, the costs in the sector under consideration were estimated at 1.98 trillion rubles. Thus, an increase of about 13% was recorded. This is stated in the review of Kasatkin Consulting, which TAdviser got acquainted with at the end of September 2024.

In the total amount of expenses in 2023, 50% were provided by independent companies. Another 41% fell on vertically integrated oil companies, 7% - on international structures, 2% - on state. From 2019 to 2023, the growth of the oilfield service sector in ruble terms amounted to 8% per year. The profitability of companies in terms of gross profit in 2023 was at the level of 17%. From the point of view of the distribution of the market between companies with different participation, after a significant reduction in the share of international players against the background of the emerging geopolitical situation, there were no significant changes in 2023. The largest segment "Drilling" occupies more than a third of the industry - about 37%.

The study says that the oilfield service was the most affected segment of the oil and gas industry in terms of personnel shortages. This is explained by several key factors, such as a change in the demographic situation (falling birth rate and increasing mortality), the COVID-19 pandemic, competition from other industries, outflow of personnel, importance and quality of education.

At the same time, it is noted that the Russian oilfield service market continues to grow, maintaining profitability. The demand for services against the background of challenges of the oil and gas industry and market conditions remains high. And the utilization of its own capacities (teams and equipment) is at record levels.^[2]

Oilfield services companies received record annual revenue in Russia

Oilfield services companies received Russia a record annual revenue of 1.79 trillion in 2022. rubles This is stated in a study by Kasatkin Consulting (ex-team Deloitte in Russia), which was published in early June 2023.

According to experts, in 2022, companies in all segments of the oilfield service market were able to receive the maximum earnings. For example, the drilling market in 2022 grew by 15.6% to 609 billion rubles. Drilling operations increased by 8.4% to 28.4 million meters, while the number of new wells increased by 6.8% to 7866.

Oilfield services companies received record annual revenue in the Russian Federation

It is also reported that the revenue of the fracking market increased in 2022 by 13.9% to 90 billion rubles. The volume of the geological exploration market in Russia in 2022 also increased by 13.7% to 249 billion rubles.

The publication recalls that against the background of sanctions against Russia due to a special military operation in Ukraine, international services - Baker Hughes, SLB (Schlumberger), Weatherford and Halliburton - announced a shutdown in Russia. Baker Hughes and Halliburton sold their Russian business to local management. As a result, the structure of the oilfield service market in Russia has changed: the share of international companies decreased from 15% to 9%, and the share of vertically integrated oil companies increased by 2 pp to 33.8%.

According to the forecasts of researchers, in 2023 the earnings of the oilfield service in Russia will be compressed by 6.1% compared to 2022 - up to 1.68 trillion rubles. The impact will be a voluntary reduction in oil production in Russia.

As noted in the Ministry of Energy, oilfield services companies in Russia provide an extensive list of services. The volume of orders for such services primarily depends on the fulfillment by oil and gas companies (customers) of their production and investment programs. The ministry added that large oilfield service companies were added to the list of backbone organizations of the Russian economy in terms of the fuel and energy complex.^[3]

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