Novatek proposes to contractors to work mainly using Russian technologies

In conditions of sanctions Novatek has become the first among the major Russian oil and gas companies, which documented 70% use of Russian equipment and materials at one of its projects. Western companies, traditional leaders of the Russian complex oilfield market, may have difficulties in participation in Novatek’s tenders, but for a while there are no Russian companies that can replace them.

Novatek’s model contract for provision of hydraulic fracturing to enhance oil recovery, dated July 10, 2014, provides for use of 70% of Russian equipment (pumping and mixing units) on the basis of Russian components, and the term of its operation shouldn’t exceed five years. Furthermore, 85% of chemicals in fracturing solution must also be made ​​in Russia. The document states that such requirements are set for the tenders in 2015.

According to manager of one of the Novatek’s partners in service, such conditions of the customer can very narrow range of potential bidders. "Russian systems for the hydraulic fracturing are produced by only one company, this equipment is not common on the market. The main large scale service players use Western equipment for hydraulic fracturing, as the technology is American. In addition to the Russian equipment and chemicals, software, which is also imported, is necessary for the successful hydraulic fracturing. Thus, even if a Russian company is the winner of Novatek’s tender, it will have to hire one of the western majors that has the appropriate software, and to give it 80% of profits," - a source of the RBC believes.