Scientific and Technological Centre NIS: From Exploration to Production

March 10, 2015

The Scientific and Technological Centre of NIS (STC) was established in 2009 by merging several closely related organisational units in order to provide scientific and technological support to the Company's activities, ensure innovation and provide support to the Company's business operations. Since mid-2012, STC has been carved out and has been running its business as a daughter company named "Scientific and Technological Centre NIS Naftagas". The main task of NIS STC is to provide a broad scientific and technological support to the Exploration and Production in the field of geological exploration, geology, reservoir development, laboratory analyses of cores and formation fluids, oil and gas production technology, and infrastructural facilities designs. The STC plays an active role in all stages from the exploration and identification of hydrocarbon sites to the monitoring of their development and exploitation throughout the entire life cycle. The STC has two laboratories (Downstream Laboratory and Upstream Laboratory) providing the services of core sample analyses during the entire oil production process. The STC employs more than 300 people including six PhD degree holders. Exploration Based on Modern Technologies In 2014, the STC set records in many areas. According to Nikolay Zalevskiy, Director of NIS Scientific and Technological Centre, the complex modernisation of data processing equipment in the area of geological researches was brought to an end. In the course of modernisation the computer capacities were completely renewed and the modern cluster comprising more than 1 000 computer cells installed. The seismic data processing software manufactured by one of the world's leading manufacturers - ECHOS and Geodepth packages of the company Paradigm - has been installed.

The STC plays an active role in all stages from the exploration and identification of hydrocarbon sites to the monitoring of their development and exploitation throughout the entire life cycle
Based on the modernised processing centre, more than 2 500 km² 3D and 1 000 km 2D of seismic data was processed in 2014. - The first project stage of developing the Regional Model of Pannonian Basin, which initiated the data collection and preparation for Serbia, Romania, Hungary and Bosnia and Herzegovina in 2014, has been successfully defended. The basin modelling project is being implemented within the tight deadlines and should be completed by the end of 2015. As a part of the project, a huge amount of geological data has been collected and generalized. The Pannonian Basin modelling is implemented by using modern software and powerful computer complexes purchased in 2014 within the STC technical modernisation program. The further renewal strategy and strategy of exploratory drilling trends in Serbia depend on the project results. Upon completion of the Regional Model of Pannonian Basin project, the project team will continue to work on the study of neighbouring oil and gas basins falling within the sphere of interest of NIS - said Zalevskiy. Based on the results of works performed in 2013-2014, new sites "Kasidol" and "Kikinda Zapad" have been started up. It should be noted that Kasidol site has been started up as a part of the program of drilling slim-hole exploratory wells. When it comes to further development of geological researches, the main emphasis will be on the application of advanced methods of processing 2D and 3D seismic data, which may considerably improve the interpretation quality in the long run. Results in the field of Geology and Development It is no secret that accuracy of results of any model cannot be better than the accuracy of input data. In light of this postulate, the formation of the database of geological and technical data is one of the priorities. According to the STC Deputy Director and Geology and Reservoir Development Director Department, Mr Mikhail Kuznetsov, the following works targeting the aforesaid trend were performed in 2014: the Database Department was established, its concept and structure adopted and new server equipment purchased. The drilling data (coordinates, inclinometry, perforation, sampling, primary logging, core descriptions, physical and chemical analyses) are fully digitized for all drilled wells in Serbia. - In 2014, based on the prepared projects and proposed sites by the STC, a total of 49 of exploitation wells were drilled, significantly more than in the previous year (28 sites). In line with the Company standard, every new well must be based on the model. For these reason, we have purchased the software for geological reservoir modelling and trained staff to operate this software. As a result, more than 20 geological models have been developed for the exploitation drilling projects - said Kuznetsov Modern Laboratory for Efficient Analyses In 2014, the STC Upstream Laboratory modernisation project was completed. As a part of this project, more than 30 equipment units were purchased and installed. In this manner, a modern laboratory base for complex analyses of core samples, fluids and PVT has been established in NIS' STC. According to Kuznetsov, the program of exploring the existing oil and gas fields is a large block of explorations we expect in the forthcoming period. - In 2015, we are planning a large-scale program related to core analysis. More precisely, we are planning to drill approximately a dozen wells, with core sampling and additional analyses in the STC. In the last ten to twenty years, this has not been done in the Company's laboratories - says Kuznetsov. The NTC's Upstream Laboratory has recently purchased new equipment - PVT system of the French manufacturer "VINCI Technologies" targeted at improving the efficiency of testing hydrocarbon sites and analysing physical and chemical properties of the bottom-hole oil samples. This investment is very important for the company as the confirmation of the components and PVT properties of oil in formations is one of the most important conditions for increasing reliability of calculating reserves and efficiency of designing reservoir development. Modern Methods and Equipment Furthermore, a group of experts has been appointed in the STC to monitor and support mechanical production methods. The oil production monitoring process was initiated in the fourth quarter in 2014, when the scientific and technical support to the introduction of intelligent control stations, screw pumps and automation of bottom-hole pumps was also organized. The optimization of operation of gas-lift well stock has been initiated as well as work on automation of oil production processes. The STC also provides engineering services in oil industry through the preparation of design and technical documents, obtaining approvals and permits, as well as contracting and coordination for the procurement of main equipment. - Our Engineering Department makes maps for infrastructure, oil pipeline and pipeline projects, compressor stations. In 2014, we completed a large-scale project for Velebit oil field in the north of Serbia and launched a project for infrastructure reengineering. We are planning to implement this project in cooperation with the GPN STC and we will analyse the infrastructure in order to reduce the costs for oil and gas preparation and thus improve efficiency - reveals Zalevskiy. 2015-2017 Plans The STC's most important plan for this year and forthcoming years is to find the way to increase oil production from the reservoirs in Serbia, which have already been considerably depleted. - To pursue this goal, our new focus will be on increasing reservoir exploitation and applying secondary recovery methods to increase reservoir exploitation, such as water flooding and carbon-dioxide (CO₂) injection into the formation, injection of various types of polymers to enhance oil recovery from the formation, etc. Therefore, we may say that the primary production period has been completed, and now we may start thinking how to enhance oil recovery - explains Kuznetsov. Furthermore, the STC plans to conduct new resource asset assessment in 2015. - In addition to the assets in Serbia, we will include the assets in our concessions in Hungary, Romania and Bosnia and Herzegovina - underscores Kuznetsov. Although there is, he says, a good knowledge of the resource base, the project economy is difficult to estimate if we fail to take into account the entire project development.
The STC's most important plan for this year and forthcoming years is to find the way to increase oil production from the reservoirs in Serbia
- Thus, the primary result of our efforts focused towards this goal will be a list of ranked geological and research projects - states Kuznetsov. Additionally, our plans include the project of using chemical agents in the process of oil and gas production, which will allow easier oil exploitation. According to Zalevskiy, there is a problem with scale deposits, which aggravates our production process, thus from now on, we will turn to chemicals, i.e. injection of chemical reagents into wells to help us avoid such problems and boost efficiency. - The plan for 2015 also includes drilling monitoring, since drilling, especially at great depths or high angles, is a complex undertaking - underlines Zalevskii and adds that plans for future also include finding of methods to exploit heavy oil for the purpose of which we plan to apply some new technologies which may help us to bring this type of oil into production. Gaj and Kumane oilfields serve, where the sites of highly viscous oil have been discovered serve as an example for this. Cooperation with GPN STC The exchange of knowledge, experience and technology between NIS and parent company Gazprom Neft is best reflected through the cooperation between two scientific and technological centres, where the combination of wide experience and different geological and climatic areas gives a new dimension to oil and gas exploration and production in this region. The Scientific and Technological Centre has been established and its organisation modelled on the STC in Gazprom Neft (STC GPN), the experts in Serbia collaborate with on a daily basis. According to the STC Director, Nikolai Zalevskiy, the cooperation is intensive and extensive and covers all areas of activity.
The Scientific and Technological Centre has been established and its organisation modelled on the STC in Gazprom Neft, the experts in Serbia collaborate with on a daily basis
- In Serbia, we primarily cooperate in the area of geological and exploratory works and reservoir development. I would like to single out the project of seismic data interpretation and processing in particular, as well as the project for regional modelling we collaborate on. As far as geological and research works are concerned, we have jointly completed four projects for seismic data processing and interpretation in Serbia. We appreciate our cooperation and exchange of expert knowledge and experience especially when it comes to complex projects, such as the project in the town of Kikinda - says Zalevskiy, and adds that such projects reflect our team work and exchange of expert knowledge and experience. - The colleagues from Gazprom Neft provide their competencies and experience with similar projects in Russia, while our experts have wide experience and knowledge regarding the work in the Pannonian Basin. When we put all these things together, we should obtain a good result. New Staff Members In the end, Zalevskiy concludes that people are the true value of the STC. In 2014, more than ten training courses were organized in the STC for experts in the field of geology, petrophysics, reservoir development and production.
The Scientific and Technological Centre in Novi Sad boasts highly skilled experts, six of whom hold PhD degrees, over 50 employees holding master degrees, and over a hundred experts holding bachelor's degrees
In 2014, the STC employed 15 young specialists in the field of oil and gas geology and reservoir development. In line with the staff development program, in 2014, more than 10 technical courses were held for employees by GPN STC experts. In view of improving qualifications, internships and work on joint projects have been organised in the GPN STC. The internships in the parent company and training in one of the leading Schlumberger's oil and gas training centres "NEXT“ have been organised for the most promising employees. Three STC's young experts have been sent for training at the Heriot-Watt University in Scotland based on the Reservoir Engineering Program. The Scientific and Technological Centre in Novi Sad boasts highly skilled experts, six of whom hold PhD degrees, over 50 employees holding master degrees, and over a hundred experts holding bachelor's degrees.