Sverdlovsk Region offers land, infrastructure and tax cuts for producer of oil&gas equipment

Sverdlovsk Region is pursuing the strategy to boost its position as a production hub for oil&gas equipment as the trend “made in Russia” continues in the industry.

According to various estimates, the Russian fleet of drilling rigs of all classes ranges from 1,000 to 1,900 units. A significant part of it is over 25 years old (made in Soviet Union) and is expected to be replaced or overhauled in coming years, which offers business opportunities especially for local producer.

European and American drilling rig producer such as Bentec, Drillmec, National Oilwell Varco as well as Chinese companies started to deliver to Russia only in late 2000s.But since 2011 the situation has been changing again due to the introduction of import tariffs and building-up of production capacities inside the country both by Russian and international players. 

The aforementioned Bentek (Germany), for instance, built up a local production site in Tyumen and, according to its managing director, the company can now be considered as a local manufacturer. More than a half of used components are produced in Russia. In 2017 the company carried out a number of projects related to modernization of drilling rigs and  delivered steel structures for the construction of an oil refinery. The production load was around 100 percent. In addition, the service orders in Russia and CIS have almost doubled.

Uralmash, mayor Russian drilling rig producer located in Yekaterinburg, invested in recent years in a mayor production overhaul  and is now increasing its market share.

The efforts of Sverdlovsk Region to support the  oil&gas equipment producers are visible in the recently established industrial park “Bogoslavskiy” in Krasnoturinsk (385 km north of Yekaterinburg). The park, neighboring a major aluminum producer, offers the necessary industrial infrastructure with connections to power grid, gas, water as well as short distances to major oil regions and special reduced tax regulations. 

In words of a resident: “We choose the park for our production site, as we saw several key success factors. This is a good geographical location for companies producing equipment and components for the oil&gas industry, the availability of industrial park infrastructure. I would also like to point out the high level of support of the business projects being implemented here by local and federal authorities.”

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