Localization and Development of Industrial Clusters

Import Substitution and Equipment Localization Program

In 2015, Rosneft developed and implemented the Import Substitution and Equipment Localization Program in the Russian Federation (hereinafter referred to as the Program).

The Program is based on the Company’s strategic goals and objectives in line with the Rosneft-2022 Strategy and the Company’s Long-Term Development Program.

The Program is focused on the Company’s goals and based on its strategic priorities, such as efficiency, sustainable growth, transparency, social responsibility, and technological self-sufficiency.

Program activities are aimed at the following objectives:

• ensuring Rosneft’s development as an advanced oil and gas company;
• sustaining the technological leadership in key competencies: oil and gas production, oil refining, and gas processing;
• establishing the Company’s sustainable technological position in the hydrocarbon market by increasing the share of Russian products and implementing the projects intended for the localization of foreign equipment manufacturing in Russia in cooperation with the world leading manufacturers of oil and gas equipment.

The implementation of the Program activities improves oil production efficiency.

Delivering the extensive production plans is inextricably linked with the increase in production drilling and technological advancement. In 2018, the share of advanced horizontal wells in the Company’s drilling projects grew by 10% year-on-year.

To promote the technological self-sufficiency as related to high-tech drilling equipment, the Company implements import substitution projects in cooperation with JSC Bashneftegeofizika and ROSATOM, including the development and testing of the domestic rotary steerable system and equipment for high-tech well logging during and after the drilling.

Technologies and Equipment for Geology and Field Development

Hard-to-recover reserves are highly important for the Company’s future development. Effective monetization of these categories of reserves is directly related to the ability to determine their geological and geophysical characteristics.

The Company has been implementing the import-substituting project «Technological Strategy for Developing the Advanced Well Logging» as part of the import substitution activities for the high-tech well logging. In accordance with the cooperative agreement between Rosneft and ROSATOM, the Company is developing well logging instruments with the elements of nuclear magnetic and neutron technologies.

Russian catalysts production development is another strategic focus area of the Company. In 2018, the Company introduced a new line of arctic motor oils that maintain reliable operation of vehicles at extremely low temperatures. OMTI fire-resistant oil provides safe operation of power plants and is designed for high-power turbines, including those used in nuclear power plants.

Rosneft also sees the development of own specialized software applications as one of key strategic areas. In particular, RN-KIN software package covers 100% operational tasks related to field development, whereas RN-KIM software package offers 100% of the basic functionalities for 3D hydrodynamic simulation of oil fields. RN-GRID software package is intended for hydraulic fracturing operations with a full design cycle, ensuring 100% import substitution, and is available for commercial use by oil and gas companies.

Industrial and Shipbuilding Cluster in the Russian Far East

Upon instruction from the President of the Russian Federation, an industrial and shipbuilding cluster was established through OJSC Far Eastern Shipbuilding and Ship Repair Center (FESRC), with a core shipyard, the Zvezda Shipbuilding Complex in Bolshoy Kamen.

The Zvezda Shipbuilding Complex is a large-scale project that is crucial for the whole country and the Russian shipbuilding industry. This is the first Russian shipyard for the construction of large-capacity vessels with a metal working capacity of 330 ktpa, meeting the demands of Russian oil and gas producers for building the nuclear-power vessels, drilling platforms and marine equipment for natural resource production on the Russian continental shelf.

The total investments in the Zvezda Shipbuilding Complex project will exceed RUB 200 bln.

A shipbuilding cluster is rapidly developing around the Zvezda Shipbuilding Complex, thus promoting maximum localization of the shipyard production chain in the Primorye.

In 2018, the Zvezda Shipbuilding Complex was equipped with a unique floating transfer dock with a carrying capacity of 40 thousand tonnes. The floating dock is one of the largest in Russia and allows launching vessels with a maximum length of 300 m and a maximum width of 50 m, and other marine facilities. The floating dock also allows lifting, shifting to the pier and lowering of vessels under repair, towing of a ship or drilling platform element within the operating area.

The most state-of-the-art shipyard in Russia is equipped with high-technology equipment facilitating the application of high-precision methods of metal marking, welding, and cutting (including laser techniques). The shipbuilding process also involves testing methods based on non-contact measurements and 3D modeling, modern technologies to control the production cycle throughout all stages – from the design documentation development to vessel commissioning.

In 2018, the ice-class tanker was constructed and delivered to the Customer at the Dalzavod Ship Repair Center, being a part of JSC FESRC.

In 2018, the keel-laying ceremony of the first ship of Aframax class tankers was held on the open-air heavy outfitting berth as part of the visit of the President of the Russian Federation, Vladimir Putin, to the Zvezda Shipyard. The Zvezda Shipyard started serial manufacturing of modern large-capacity vessels for crude oil and petroleum products transportation. Aframax tankers will be the first ships of such type built in the Russian Federation.

Sapphire Applied Engineering and Training Center

Project to Design Steerable Thrusters

An industrial shipboard equipment cluster is formed around the Zvezda Shipbuilding Complex. The cluster also comprises a workshop of the steerable thrusters production plant that can be used for ice-class vessels, including gas carriers.

LLC VRK Sapphire Plant, a joint venture of Rosneft and General Electric, manages the project for design and localization of the production of steerable thrusters, a key component of marine electric propulsion systems.

At the present day, the building of the steerable thruster production plant is constructed, while the activities on designing 7.5 MW steerable thrusters for multi-functional support ice-breakers are near completion. Designing of 15 MW steerable thrusters has been started.

Construction of a Coastal Support Base for Offshore Projects

In pursuance of Resolution No. Pr-1553 of the President of the Russian Federation, Putin V.V., dated 11 July 2013, Rosneft is continuing to build a supporting infrastructure for oil and gas projects on the Russian Arctic shelf in the residential area of Roslyakovo in Murmansk.

Along with upgrading the plant’s ship repair facilities, the Company plans to construct a coastal support base on the premises of OJSC Ship Repair Plant 82 for offshore projects, as well as an oilfield service equipment production block, and an infrastructure to produce concrete gravity-based structures with a facility for assembling topsides for oil and gas platforms.

The project was driven by the need to reduce dependence on foreign manufacturers, cut production costs, and localize the production of high-tech components.

In the reporting year, the Company developed basic design solutions.