The results of the First international conference on «Practical issues of hydraulic fracturing of formation» organized by oil and gas consulting center Newfolk in Kiev

On October 1, 2014 the first international conference on practical issues ofhydraulic fracturing, organized by oil and gas consulting center Newfolk*,took place in Kiev. The event gathered fifty participants from Ukraine,Belarus, Canada, USA. The title sponsor of the conference was gas producingcompany KUB-Gaz.
For the time of three sessions the participants under the leadership of the General Director of Newfolk Andrey Zakrevskiy had time to discuss pressing issues, opportunities and prospects of the domestic gas industry.
At the first session, devoted to geological preconditions and prospects of hydraulic fracturing in Ukraine, participants once more were trying to convince each other that Ukraine has a huge gas reserves that could be and should be produced through hydraulic fracturing, which is able to increase the performance of existing wells many times. Thus, the representatives of the state gas producing company Ukrgazobycha shared the experience of hydraulic fracturing they managed to obtain yet in the 90s. Oleg Boguslavets, the Head of the department for intensification of hydrocarbons production, was talking about the certain difficulties, that the company had to overcome in order to master skillfully hydraulic fracturing technology. It should be noted that it is Ukrgazdobycha was the first company in Ukraine, which implemented hydraulic fracturing in its activity.
The representatives of such companies as Region, Burovaya Tekhnika were talking about the experience of hydraulic fracturing at the Ukrainian gas wells, as well as the prospects of Packers PLUS technology use for the development and intensification of horizontal wells in tight collectors and the potential of hydraulic fracturing at the Western-Ukrainian fields.
At the second session, devoted to political, organizational and environmental aspects of hydraulic fracturing use, the guests of the event were discussing the impact of the current situation in Ukraine on the use of this technology. Thus, Vladimir Punko, the Professor of the State Ecological Academy of Postgraduate Education and Management of the Ministry of Environment Protection of Ukraine, was trying to dispel the myths about regulatory restrictions for hydraulic fracturing, and Robin Noyton-Rumbo, the Head of Shell’s drilling department in Ukraine, on the example of his company was describing the optimal model of interaction between gas companies and society. As is known, a lot of information from the pseudo-ecologists on excessive danger of hydraulic fracturing technology for groundwater, the surrounding land and even its seismic hazard «lives» in the information space. According to Alexander Kalinin, the representative of the private gas company KUB-Gaz, this situation has place due to insufficient or absence of work with society, who has the right and wants to know what is the technology of hydraulic fracturing and whether its use is so dangerous. When the company Newfolk appealed to the state control authorities, it received the reply that for more than half a century of hydraulic fracturing use on the territory of Ukraine no fact on the negative impact of the method on the environment was record. Herewith, hydromonitoring of groundwater while well drilling is conducted according to the laws of Ukraine.
According to the technical staff of producing and service companies, since the sixties of the twentieth century Ukraine has all the necessary legislative and technological solutions that enable companies to conduct hydraulic fracturing safely for the environment and employees. Now in the countries of North America hydraulic fracturing is used in 90% of cases while the construction of new wells, therefore, it is necessary already at the design stage include hydraulic fracturing in the work plans for the construction of new wells and the overhaul of an old well fund.
A breath of common sense was the speech of Robert Bensch, who stressed the importance of companies integrating, drawing up of joint plans for hydraulic fracturing, change of attitude of producing companies’ management to innovative methods of inflow intensification.
At the third session the participants shared the experience of hydraulic fracturing abroad. Sergey Klotchkov from Belorusneft and Martines Alvorado from Weatherford were talking about new technologies of hydraulic fracturing, new patents, obtained by Belarusian colleagues in the application of radial drilling, and shared the experience of its implementation in Europe. The guests showed interest in the report of Paul Overton from the company CDM Engineering Ukraine, who said that even under the current situation in Ukraine our country will not remain among the outsiders. According to him, despite the fact that in Ukraine it is even difficult to find high-quality cement for well construction, a huge market to implement hydraulic fracturing in our country contributes to the fact that many international companies are ready to enter it provided the real demand for the equipment and materials for hydraulic fracturing. For this purpose, gas companies should just conduct it, that, for the first, will raise their own profit due to increased production volumes of blue fuel and, secondly, will contribute the country’s movement to its own energy independence.
The latter is impossible without the assistance of the Ukrainian government. The result of the conference became the decision of all participants to appeal to the President of Ukraine, the Prime Minister of Ukraine, the Head of the Verkhovna Rada and the heads of relevant agencies in respect of the improving of tax climate for oil and gas producing companies for the purpose of positive changes in the producing industry of Ukraine.
We are talking about the requirement to equate operations on hydraulic fracturing and well overhaul by trunk collaring method to the drilling of new wells. It means that given the existing legislation on «special measures» it is necessary to apply the coefficient of 0.55 when calculating rent rate for gas production. This step will open wide opportunities to apply new technologies, including hydraulic fracturing, and after expiration of «special measures» - and at all to exempt gas, obtained in wells, where the hydraulic fracturing or overhaul was applied, from rent payments. Due to the lack of modern equipment for hydraulic fracturing, top drives for horizontal drilling, modern telemetry systems on the territory of Ukraine, the participants of the conference proposed the state to exempt companies, that make temporary importation of drilling equipment, coiled tubing units and fleets for hydraulic fracturing from import duties and VAT.
Besides the discussions during the sessions, the debates about hydraulic fracturing, current problems and prospects in gas producing industry of Ukraine were being carried out and in the lobbies when coffee breaks. Guests had the opportunity to relax at the very end during gala dinner in the cozy restaurant of the hotel «Rus» listening the wonderful sounds of the viola and violin by the violist of the National Symphony Orchestra Orestes Krysa and the violinist of Kiev Chamber Orchestra Antonina Yushi-Krysa.
It should be noted that the conference jointed the participants of both the state and private gas producing companies from Ukraine and abroad. According to the General Director of the company-organizer Newfolk, this is the first and not the last conference organized by oil and gas consulting center. According to Andrey Zakrevskiy, next event, devoted to coiled tubing technologies, will take place in Lvov already in six months.
The demand for the activity of Newfolk on the formation of professional oil and gas «club», able to lobby its interests for make benefit of the whole producing industry and the state in general, showed the presence at the conference both the nation-wide media, among which was Channel 5, and profile editions (magazine NefteRynok, Internet publication «Oil and gas online» and others).
The companies which were present at the first international conference «On practical issues of hydraulic fracturing»: KUB-Gaz, Ukrgazdobycha, Poltava Petroleum Company, CDM EngineeringUkraine, ShellUkraine, WeatherfordUkraine, Halliburton, Lekora, Region, Belorusneft, Burovaya Tekhnika, Arsenal, Ukrainian Drilling Company, TriskelEnergy.
* Reference:
Newfolk LLC is oil and gas consulting center providinganalytical, marketing and research services to oil and gasproducing companies, operating on the territory of Ukraine.The company’s main goal is to assist gas producing sector ofUkraine to use the domestic potential as efficiently as possiblein order to increase production and to contribute the country’smovement to its own energy independence.