OOO Burovoya Kompaniya Eurasia (BKE) is the largest onshore drilling contractor in Russia
Path to leadership
The early years (2004 to 2007)
EDC was formed in 2004 when the current CEO and business partners bought the drilling and drilling services divisions of OAO LUKOIL, one of Russia's largest energy companies. Management initially focused on reorganising the business, changing the operating philosophy from a volume-based, functional approach to a more commercial, profit-based strategy. Non-core infrastructure and services were divested, rig utilisation was improved and rig crews trained and incentivized to operate more efficiently and dramatic improvements in volumes, revenues and profitability were achieved.
Strategy at IPO (2007)
The Board of EDC approved the IPO of the company in 2007 and capital was raised to fund the growth of the business. Management communicated the following 5 core objectives at the time of the IPO:
- Organic growth and efficiency improvement
- Continued focus on drilling services and potential selective expansion into related services
- Secure access to land rig manufacturing capacity
- Further growth of customer base and expansion into new markets
- Strategic expansion in offshore drilling
EDC management has strived to fulfill these objectives and is now the clear market leader in the Russian drilling industry, a leading market within the global oilfield services industry.
Achievements since IPO (2007 to 2012)
We have grown metres drilled and revenues (US$) well in advance of the market - metres drilled have grown almost 17% per annum since 2007 (market grew 8%), our revenues in US$ have grown over 26% per annum over the same period market grew 6%). EBITDA margins from 21% in 2007 to over 24.4% in 2012.
We are the benchmark for efficiency improvement in the Russian drilling industry - rig utilisation has improved from 75% in 2007 to 85% in 2012, while metres drilled per rig crew per day has improved 34% since 2007.
We have grown our market share, based on metres drilled, from 22% in 2007 to 29% (2012). We diversified our customer base to include Lukoil, Rosneft, Gazpromneft, Petronas, Dragon Oil, plus a range of other customers in Russia, Turkmenistan, Kazakhstan and Iraq.
Onshore operational achievements
We have tripled horizontal meters drilled versus 2007, we have quadrupled the number of sidetracking jobs completed versus 2007 and more than quadrupled our workover rig fleet since 2007, adding scale to activities that are complementary to our core drilling business.
Investment in our rig fleet
We have invested over $1bn renewing and refurbishing our fleet of over 250 drilling rigs and now have the youngest, most advanced rig fleet in Russia.
Offshore operational achievements
We have built a dominant position in the offshore jack-up rig market in the Caspian Sea, owning 4 out of the 5 available rigs in this land-locked and fast growing exploration and development market. We started drilling operations on Lukoil's Korchagina platform in 2009 and have drilled extended reach horizontal wells to over 8,300 metres.
We consider ourselves to be pioneers in the Russian & CIS drilling industry, constantly seeking to innovate in order to provide the best service to our customers. We were the first to privatise, we are at the forefront of the advanced drilling solutions offered in Russia, we have forged an important strategic alliance with Schlumberger allowing us to offer the best integrated complex well solutions and are working to evolve the contracting model with our major customers. We have taken a foot hold in northern Iraq with 4 rigs drilling for international E&P companies.