"Wherever we are active, we also assume social responsibility"
Wintershall Dea is Europe's largest independent producer of natural gas and crude oil. Torsten Murin, Managing Director of Wintershall Dea Russia, talks about the effects of the merger on the Russian business as well as the growth and development plans.
Mr Murin, what are the most important projects in Wintershall Dea's Russia portfolio?
Most of our projects are located in the Yamalo-Nenets Autonomous District. These are our joint ventures with Gazprom – Achimgaz, Severneftegazprom and Achim Development. In addition, south of Volgograd we are also running our Wolgodeminoil joint venture together with LUKOIL. This means that in Russia we are not just a gas and oil company, but also play a major role as an international investor.
How successful are you in Russia given the weak economy and the risk of sanctions?
Demand is mainly driven by the European economy, not by the Russian economy. Gas and oil are sold abroad and the most important customer is Europe, which imports large quantities of its requirements. Europe is highly diversified and receives gas and oil from many sources, including Norway, Algeria and the USA. Nevertheless, it can be assumed that the demand for gas and oil from Russia will not decline. Russian gas can be imported into the European domestic market as liquefied natural gas (LNG) or pipeline gas, and can be transported anywhere. We are therefore relatively independent of economic developments on the Russian market. In addition, there are many different economies in Europe, so that economic weaknesses in individual countries have less of an impact. Natural gas production in Europe will increasingly decline, that is certain. In Germany alone, production has fallen by more than half in the last ten years. The Netherlands, one of the most important natural gas producers in Europe, plans to completely cease production by 2030. We therefore continue to see growth potential for our industry.
Many critics say it is dangerous for Europe to become too dependent on Russia for energy imports. What do you think of that?
Europe must ensure that energy is supplied or imported cheaply, reliably and in sufficient quantities from various sources. That is security of supply, and Europe would do well to rely on pipeline gas as well, because it can withstand any competition. There are pipelines from North Africa and Norway, LNG comes from different parts of the world, and there are pipelines from Russia. Pipeline gas from Russia is therefore only one component of the supply security. Germany currently has an import requirement of 100 billion cubic metres of natural gas per year. 40 billion come from Russia, of which over 12 billion come from Wintershall Dea’s production.
What are Wintershall Dea’s future and growth plans in the Russian market?
We currently have very promising developments and plans in several projects. One of these is Severneftegazprom, which has been in production since 2007. Fourteen exploration and production wells are scheduled for this year alone, and more than 120 more are planned over the next few years. At our Achim Development joint venture, more than 160 colleagues are currently working on achieving a very ambitious goal, namely the start of production at the end of 2020. And of course we are keeping a very close eye on the Russian market so that we can tackle further projects together with strong partners at the right time.
How do digital technologies help you make production more efficient?
Digitisation is first and foremost a process that can contribute to increasing efficiency. It is important to understand the entire workflow, including all surface and underground activities from the exploration to production. For example, in the development of the Turonian rock strata in the Yuzhno Russkoye natural gas field, our Severneftegazprom joint venture is currently in the pilot phase of implementing a digital twin. This is a digitalised image of the reservoir and all installations that provides live tracking of measurements values and data, and even makes it possible to simulate further projects digitally. Among other things, this technology helps us to better coordinate drilling in different rock strata. We hope that this will reduce costs and increase production at the same time.
What impact will the merger of Wintershall and DEA have on your business in Russia?
The merger has made us the largest independent gas and oil company in Europe. This is having an impact on our business in Germany and Europe, but also, of course, in Russia. Wintershall Dea is an important and credible player that is contributing to the energy partnership between Russia and Germany. Within this framework, we see it as our task to promote dialogue between both sides with all the means at our disposal. If we look at the operating business, our overall portfolio has become more diversified as a result of the merger and the share of our Russian business in the total production has fallen slightly. This in turn opens up scope for new gas and oil projects in Russia.
How relevant is liquid gas (LNG) to you? Russian corporations such as Novatek are investing billions in major projects like Arctic LNG 2.
We at Wintershall Dea are concentrating on our main activities in the gas and oil business and do not plan to invest in LNG in the foreseeable future.
How is Wintershall Dea engaging in Russia outside of gas and oil, for example in terms of social responsibility?
We see it as part of our corporate responsibility to be socially committed in the regions where we operate. We have along tradition of doing this in Russia, so I would like to mention just a few of our CSR projects. Whereas in the past we concentrated more on the restoration of cultural assets or art exhibitions, today we focus on people, in other words on social commitment. For example, since 2015 we have been working together with the regional administration in the Siberian city of Novy Urengoy to develop an inclusive Montessori kindergarten with medical facilities for 200 children. We also support a local school with a Wintershall Dea class in which we provide intensive support for pupils studying chemistry. In St. Petersburg, where the headquarters of Wintershall Dea Russia is located, we support Upsala Circus. The work here with children from disadvantaged social backgrounds focuses on the theatrical arts and circus pedagogy, and is implemented inclusively. This enables the young people to enjoy recognition and appreciation. We have been in Russia for over 25 years and will continue to adhere to our principle that wherever we are active, we will also assume social responsibility.
The interview was conducted by Thorsten Gutmann.