At 2019 year-end, Zakhidnadraservis Group of Companies has shown the largest increase in hydrocarbon production among private companies. We had a conversation with Stepan Kozytsky, CEO of Horizonty Drilling Company, which is part of the Group, about the evolvement and prospects for further development of the company.
Mr. Kozytsky, how did you get into the oil and gas industry?
I was born in Lviv region, Mykolaiv city, graduated from school in this city. I moved to Lviv, studied at the Ivan Franko National University at the Faculty of International Economic Relations. In 2010 I joined the Ivano-Frankivsk National University of Oil and Gas for external degree program and got "Drilling Engineer" degree.
In 2003, my father started oil and gas company, and in 2005, being a student, I joined him. The number of employees at that time was 9 people. We had a second shift training and I was at work from morning till 3 pm and then I attended lectures. I have been working for already 15 years.
What is your way for decision-making? What relations do you have with your father, older brother?
The main strategic decisions are made by the father, although, we take mutual advices. I am engaged in operational oil and gas activities, while my brother (ed. - Maxym Kozytsky) is engaged in renewable energy.
"We have a solid, reliable team that has advantages over a large bureaucratic structure"
What do you think is the uniqueness of Zakhidnadraservis?
First thing, we are a small but vertically oriented company. We do everything from land allocating, road construction, drilling, seismic survey - we sell it to the end consumer.
A lot of work has been done, but it is all done in a common house, we have a solid team. I think this is easier compared to a large bureaucratic structure.
To date, Zakhidnadraservis has six licensed sites, of them five gas and one oil fields. There is also a joint venture with MND, a Czech company, and five more gas sites, ie a total of eleven.
We estimate gas resources at 12 BCM of gas and 3 MT of oil.
Daily production at the end of January 2020 is 450 TCM of gas produced directly by Zakhidnadraservis, and we produce another 68 TCM of gas together with our Czech partners.
Which companies is part of Zakhidnadraservis Group of Copanies?
These are Horizonty Drilling Company, Nordic PE, Nordic-Bud PE and Georozvidka LLC.
How many people work in Zakhidnadraservis Group of Copanies?
There are currently 430 employees.
What is the engineering and production staff ratio?
Production staff makes up to 90%.
«We receive online logging while drilling»
What are your innovations over the last two years?
During this time the Group strengthened. The number of drilling rigs increased. Today there are six of them, from 50 to 340 tons of capacity. We have a coiled tubing fleet, directional drilling subdivision with all sizes of downhole motors. We have our own workshop to maintain downhole motors, a telemetry system. What is interesting is that today we are drilling and doing logging right away. That is, we see critical indicators of hydrocarbons online directly at the drilling site. By the way, I saw this technology about seven years ago, when an Austrian company was drilling a well. This is not a new technology for the world, but it is quite progressive for Western Ukraine.
You are now launching an interesting project using directional drilling gyroscopes. Please tell us about it.
Today, directional drilling without using a high-precision gyroscope is a step backwards. This is the required tool, we bought it. There are two different temperature modes. We entered into an agreement with the company …. It is the world leader in well measurement. We are now being certified and will be able to provide our clients with services not only in Ukraine but also abroad. In fact, the demand is very high, we have already hired and trained staff.
Do you now only carry out your own orders or for third parties as well?
Apart from Zakhidnadraservis, our customers are Ukrnafta and Weatherford. We worked as subcontractors with Weatherford. This year, we expect to launch sidetracking service. The gyroscope is used to land the WIPStock to direct it properly. In this case, it is imperative to use the gyroscope in order not to drill once again.
We also created the WIPStock warehouse, now we buy them for all sizes of string, there will be at least two WIPStock.
A year ago, you started a new kind of activity – using of a coiled tubing fleet. Please tell us about it.
In 2019, we purchased the coiled tubing unit and nitrogen installation manufactured by the Belarusian company NOVFidmash. We successfully use them. We carried out 41 well operations in 2019. For example, in the Czech Republic, there were less than 20 coiled tubing well operations in 2019.
Horizonty Drilling Company's drilling fleet consists of six machines. The smallest is the A50. We have an American machine Cargo 200. It now operates in the Poltava region for Ukrgasvydobuvannya. The machine is equipped with a top drive, we also use the rotor. The machine has been operating in the Kharkiv and Poltava regions for 2.5 years.
We have a machine called IDECOSBSD 806 with a load capacity of 160 tons. This is our first machine. We have already drilled 49 wells with this machine.
There is also a Dragon 1000 machine with a load capacity of 225 tons. We bought it in 2015 and have already drilled first well.
"One of our rigs was involved in drilling for BP in Oman"
Back in 2019, we purchased two drilling rigs with a capacity of 340 tons each. One of our rigs was involved in drilling for BP in Oman.
One machine is being certified and is now in a factory in Stryi. All machines are equipped with the Triplex pumps. The range of pumping equipment varies from 800 to 1,300 hp. Each of our new drilling rigs has 1,300 hp pumping equipment.
We have six machines, three of them are equipped with the Cutwell KB 200 top drive, DD 804 and DD 805 machines.
We do turnkey wells, starting with the construction of the access road. These works are carried out by our Nordic Bud Company. That is a byroad, a drilling site, assembling - we do everything on our own. By the way, Nordic Bud is a contractor for the construction of gas and oil pipelines.
Gas treatment plants, compressor stations - we do it all on our own. Our engineers invented a kind of gas drying self-certified under the Nordic Bud passport. To date, all our gas treatment plants are equipped with gas dryers. Nordic Bud was established in 2010 and during our activity we have laid 200 km of gas pipelines. Only in 2019, we have laid 47 km of gas pipelines.
When was Georozvidka established? What kind of work does it engaged in?
The company was established in 2010. In 2019, the company started seismic survey.
Georozvidka is still engaged in engineering. The drilling project, the project of the field arrangement, the project of the pipeline construction - all this is carried out by Georozvidka.
Georozvidka also implements renewable energy projects.
Since 2019, we also decided to do seismic survey by ourselves. We purchased five US FlyBat vibrators - 27 ton vibrators - optimal for crowded regions of Ukraine. We purchased 2,000 channels from the US company Mitchem - the world leader in seismic services. We have already signed an agreement to purchase another 5,000 channels. I expect that already in April we will be able to carry out 3D seismic survey.
For the incomplete year of 2019, Georozvidka has already done 240 km of seismic survey.
