Caspian Energy (CE): How do you assess the current situation at the market amid the oil price decline? How does it affect your area of activity?
Chris Mott, General Manager, SOCAR-Fugro LLC: The price of oil has declined significantly which has had a negative global effect on the activity of the oil-gas industry. International oil companies are posting big financial losses. Many service companies are making employees redundant. We have not made anyone redundant. The situation in Azerbaijan is not typical. Some big projects are continuing. The downturn has not been as badly felt here as it has been felt elsewhere, for which we are very grateful. Because oil is now worth much less than it was, there is a huge amount of pressure amongst the whole supply chain to reduce costs, to be more efficient and to work within the supply chain to facilitate major projects.
CE: We would like to congratulate you on the signing of the contract with the Heydar Aliyev Oil Refinery. This is a very topical issue for now. Could you please provide us detailed information about the work that you are going to carry out within the framework of reconstruction of this oil refinery?
Chris Mott: Thank you. We first worked for SOCAR OGPC in 2014 when the plans were to build a brand new oil-gas petrochemical complex at Sangachal. We carried out some topographic, geophysical and geotechnical survey work there. The work we did was technically very much appreciated. We did a very good job. Unfortunately, the oil price collapse has meant that building a brand new complex is not economically viable at present. The decision has been taken to refurnish the Heydar Aliyev Oil Refinery to increase its capacity and to enable it to produce a wider range of refined products. This will reduce expenditure on imported hydrocarbon products that Azerbaijan previously could not produce. This is a strategic step in making the Azerbaijan economy more self-reliant and less dependent on foreign imports. Our role in the refinery redevelopment is to provide world class information on the geotechnical properties of the soil and the environmental conditions on the site to enable the refurbishment works to go ahead as smoothly as possible from the initial building point of view, making sure that no soil conditions are unknown or unanticipated before construction works start. We provide reliable information about the soil conditions giving confidence to the design the foundations for the new structures that are needed during the redevelopment. We see ourselves as a very early link in a chain of activities which will result in the refurbishment happening on time and on budget.
We are confident that our performance on this contract will lead to future opportunities to work with the oil refinery. SOCAR-Fugro can bring all the expertise of the Fugro Group to focus on many of the different issues that the redevelopment will require. We are looking forward to future opportunities.
Within the framework of the redevelopment work we can offer services to monitor machinery when it is operating to make sure that it is working properly and to give advanced notice of any malfunctions, minimizing expensive downtime, repair and loss of production. We can provide meteorological services to get precise advance information on weather, especially of extreme weather events, such as very strong winds which caused problems offshore last year. We can carry out additional very specialized geotechnical work for more detailed geotechnical site investigation. We can provide geophysical services that provide information on the underground soil conditions between the boreholes that have been drilled.
We are expert in more than carrying out work in accordance with specifications. We are expert in understanding what our client’s requirements are and in providing the answers to those clients’ questions. For example, we have a service which creates a very accurate 3D digital model of electricity companies’ power lines and the vegetation near them. Electricity companies spend millions of dollars a year in cutting down trees and carrying out other preventative measures to make sure that the power lines continue to conduct electricity. Fugro’s service analyzes the model to inform the electricity company of potential threats to its power lines, the exact coordinates of the threat, what the problem is, what tools to take etc. It saves millions of dollars a year in operating costs and prevents interruptions in supply from happening. We provide the client the answer to the questions “where is my power line most risk of being broken?” and “what do I have to do to prevent this from happening?”.
CE: Is there anything else that you would like to share with us about innovative projects?
Chris Mott: In general, the focus of SOCAR-Fugro is to make our work more efficient. We are always very willing to work with our clients to understand what their real requirements are and what their questions are that require answering. We work with them to supply the answers in a better, more accurate and faster, way, helping to offset the drop in the price of oil by delivering world class projects at a lower price without compromising quality.
CE: What other projects, in addition to the contract signed with the oil refinery, are currently underway?
Chris Mott: We are providing offshore survey and positioning services on an inspection maintenance and repair contract, from an oil field support vessel. We supply people and equipment to enable our client to examine its subsea infrastructure, its platforms, its pipelines and its wellheads and make sure they remain in good working order.
CE: Are there any suggestions that Fugro can make to prevent the reoccurrence of accidents such the one that took place at Guneshli?
Chris Mott: For the avoidance of doubt I want to make is clear that we were not at all involved in this accident, either before or after its occurrence. We do provide accurate weather forecasting services, which might have forecast very strong winds that were encountered and enabled an earlier platform evacuation, before the wind got too strong and the seas too high.
CE: Azerbaijan is implementing reforms aimed at development of the non-oil sector. Do you have anything to offer for the development of the non-oil sector?
Chris Mott: We provide the people, equipment, expertise and technology that support the exploration, development, production and transportation of our world’s natural resources. We provide the technical data and information required to design, construct and maintain structures and infrastructure in a safe, reliable and efficient manner. We encourage your readers to visit Fugro’s YouTube channel at https://www.youtube.com/channel/UC1h_3GYlQRD8fxp69ZdI0iQ where there are several very interesting videos explaining what is being done in both oil and non-oil sectors.
CE: In which programs is the company ready to participate?
Chris Mott: SOCAR-Fugro in Azerbaijan is always ready to participate in world class inspection, maintenance and repair programs for any of its clients. We are happy to have talks with any of the operators here in Azerbaijan. Many people believe that having such programs saves much more money than it actually costs to carry them out in increased uptime, more safety, enhanced productivity and better and more predictable oil-gas revenues.