Commercial, Products, Services

Russian Offshore Industry: Operators Compete for Utility

By By Elena Malova | May 1, 2012

Gazprom Mi-8MT landing on the Pechora Sea oil production platform Prirazlomnoe.

Offshoring has always been a lucrative helicopter business. All the more so today as Russia opens very attractive offshore projects such as Shtokman, the Yamal fields, Prirazlomnoye, Sakhalin, the Korchagin field, the Filanovsky field or Shatsky ridge. Thus Russian offshore operators are in a desperate battle for pieces of this big pie.

But in order to become cutting edge offshore helicopter support providers, Russian operators need to modernize their fleets, as the oil fields are further and further away. There is a great need for larger and more powerful helicopters capable of providing long-haul services all year long.


To remain competitive, Russian operators need to add new helicopters to their current aging Mil fleets to be able to confront a greater variety of weather conditions and over longer periods of time. Their success also lies in innovations, in developing new technologies for localization in Polar areas, fighting against icing conditions, and landing under poor visibility, for example. Pilot training also needs to be adapted to these harsher conditions as often, helicopters are damaged by poor pilot skills.

Operators: UTair


A UTair Mi-26 during a firefighting operation in Siberia. Many of Russia’s offshore operators also provide helicopter utility support services.

UTair, the largest helicopter operator in Russia (covering most of the central part of Russia and the Far Eastern federal district) and according to the company the fourth-largest operator worldwide, consists of many subsidiaries that use a wide variety of aircraft all around the world. UTair Aviation, UTair Express, UTair-Ukraine, UTair-Cargo, Turukhan Airlines, Nefteyugansk, Vostok, Helisur, UTair Europe, UTair South Africa, UTair India—all these structures are recognized players with over 300 machines, including Mil and Kamov (Mi-26T, Mi-171/Mi-8AMT, Mi-8MTB, Mi-8T, Ka-32), Eurocopter variants (AS355N, AS350 B3, BO105, soon EC175) and even Robinsons.

Due to its cabin dimensions and the configuration of the interior (fold-away seats along inner sides of the cabin), the Mi-8T can carry both a team with equipment and transport large-size cargo. “All UTair Aviation helicopters are efficiently used for pipeline monitoring,” says UTair CEO Andrey Martirosov.

UTair key customers are leading Russian mining organizations such as Surgutneftegas, Gazprom Neft, Sibur, Slavneft, Rosneft, Gazprom, Lukoil, TNK-BP, Shell, Ritek, Tyumenenergo and also local administrations such as the Khanty-Mansisk and Yamalo-Nenets Autonomous Areas and the Tyumen region.

UTair is planning to expand in Brazil. In February 2012 the operator announced a joint venture with a Brazilian company for servicing the region’s oil platforms.

“The negotiations are in progress and we will create the joint venture soon,” says Martirosov, without specifying the name of the Brazilian company. According to Martirosov, the airline intends to use Eurocopter EC175s. The CEO added that UTair will create the joint venture by the end of this year.


Aviashelf was founded in 1998 in the Sakhalin Peninsula. This location was chosen for its proximity to offshore structures. At the time, companies eager to position themselves as Russian offshore operators didn’t really have much experience in the field, so Aviashelf teamed up with Bristow Group, now a shareholder. Quickly the company positioned itself as a leader in the market.

“When we started the company we had many problems—we didn’t have staff which could operate helicopters on offshore platforms and our helicopters didn’t have tracking systems or early warning systems,” says Victor Aksutin, company general director.

“Our cooperation with Bristow Group helped us a lot. We fulfilled projects in the Russian Far East and Siberia but mainly we are focused on the Sakhalin area and keep working hard in that direction,” he added.

The Aviashelf fleet consists mostly of Mil helicopters (Mi-8T, Mi-8MTV-1). The company works for Rosneft (Rosneft’s projects include Sakhalin III and Sakhalin V, the North Caspian projects, Shatsky Ridge, Temryusko-Akhtarsky project, geological exploration of offshore areas in Tuapse Trough, Exxon Neftegas—operator of the Sakhalin-1 project consisting of three oil and gas fields off the north-eastern costs of Sakhalin Island—and Sakhahin Energy Investment Group (operator of the Sakhalin-2 project in the Sea of Okhotsk).

In order to comply with international safety standards, Aviashelf’s Mi-8MTV-1s are equipped with weather radar, GPS units, COSPAS emergency radio transmitter buoys, rectangular emergency exit windows and comfortable passenger seats. The company also has special equipment (suspension baskets) to facilitate emergency or medical evacuation. Aviashelf’s crews and ground personnel are trained to meet all aviation certification requirements set forth in the current legislation. All company engineers and mechanics fulfilled the Human Factors course, and crews regularly go through CRM training.

“In order to improve flight safety we developed and implemented our own flight safety management system (SMS) and HSES system which made a positive impact on the company operations,” Aksutin says. “These systems not only enable us to maintain a high level of safety, but they also allow to control potential loss factors that can undermine financial performance.”

PANH & Gazprom

But market shares are sought after. PANH Helicopters worked hard to win the Blue Stream Project (a deepwater gas line construction in the Black Sea between Russia and Turkey). PANH Mi-8MTB and Ka-32 helicopters carry useful payloads to the platforms and perform medical evacuation. The company also cooperates with CHC Helicopters on the Kashagan Project (Kazakhstan).

In the middle of 2009, Russian President Dmitry Medvedev signed a decree to allocate the federal subsoil on the continental shelf of Russia to public companies without auction. Thus Gazprom and Rosneft will get the majority of sites on the shelf (foreign companies are likely to be attracted to the development).

Gazpromavia, a subsidiary of Gazprom, is one of the 10 largest airlines in Russia with 32 aircraft including Boeing 737s, Dassault Falcons, Eurocopters and Russian aircraft. Gazprom’s projects include Sakhalin II and Sakhalin III in the Sea of Okhotsk, the Shtockman field, the Priazlomnoye field in the Pechora Sea and miscellaneous geological exploration sites.

Gazpromavia has a unique experience of working in extreme conditions like the ones Russia offers.

“We fly to the North and South Poles to support high-latitude expeditions and floating stations,” says Andrey Ovcharenko, director of Gazpromavia Avia. “We ferry shifts to gas production sites on a regular basis. We do surveys, we monitor and patrol gas lines and field developments. We also perform search and rescue and medical operations.”

Shtokman Gas Project

The Shtokman field is a gas development project in the center of the Barents Sea, about 500 km north of the Kola Peninsula. The gas field is estimated to be one of the world’s largest natural gas deposits with close to 4 trillion cubic meters of natural gas.

Sevmorneftegaz, a subsidiary of Gazprom, owns the rights to explore and produce gas from this field. In order to develop the field, Gazprom attracted foreign oil companies. Shtokman Development Company was set up to develop and exploit the field.

The Shtokman field was expected to come on stream by 2013-15 and development costs were estimated at $25 billion for the first phase ($50 billion overall investment). However, in February 2010, the project development schedule was postponed for three years due to a decrease in demand for gas in Europe. Gas production is now expected to start in 2016. The first liquefied natural gas (LNG) production has also been postponed until 2017 due to changes in the targeted U.S. LNG market. Four phases are scheduled for full field development, which will deliver 71.1 bcm per year, 30MTA of LNG and 600,000 tons of gas condensate per year over a 50-year period. The Shtokman project is of strategic significance for Gazprom and its implementation will become a pivotal point to form a new gas-producing region on the Russian Arctic shelf.

On March 29, 2012, the board of directors of Shtokman Development AG held a meeting in Moscow. Based on the decisions of the previous meeting, the board reviewed the whole scope of issues related to the project. Shareholders are confident that the project can be improved further, both technically and economically.

They agreed that their efforts should continue to focus on optimizing the project and strengthening the dialogue with the Russian authorities.

The heads of Gazprom, Total and Statoil, have decided to postpone the investment in the project for three months. In the meantime the consortium of partners are supposed to meet President-elect Vladimir Putin, the supporter of this ambitious project.

“We have been waiting for Shtokman for so many years and are so used to postponements that we are prepared for bad news,” says Ulrich Kreuzenbeck, partner of FLAIT Group. “Some expected even a negative vote from the consortium of partners. After the Shmatkos [Russian Energy Minister] statement about a Putin-backed tax break, we can see with renewed optimism into the future and the economic development of our Murmansk-region,” Kreuzenbeck continues. “Shtokman will most likely be a major engine for many, many years.”

The Shtokman field will become a resource base for building up Russian pipeline gas and LNG supplies for domestic and foreign markets. Vast gas deposits, favorable feedstock composition providing for minimum costs of gas purification and treatment in parallel with an opportunity for production expansion ensure for a long-term gas supply. The project is highly competitive as there are no transit countries crossed by the pipeline gas running from the Shtokman field to Western Europe via the offshore Nord Stream pipeline, the feedstock base is quite close to LNG markets, and low temperatures prevail in the region thus reducing energy consumption for gas liquefaction.

On May 17 and 18, representatives of the Russian state authorities and top-management of oil and gas companies like Gazprom, Lukoil and Rosneft will gather in Moscow at the IX International Conference, “Offshore Upstream Development in Russia and CIS—2012” to discuss the development of the offshore projects. The agenda covers interregional and international collaboration, tendencies and prospects, practical applicability for Russian offshore projects realization, criteria for contractor selection. UTair and Eurocopter are some of the key sponsors of the event.

The question when the helicopters of UTair, Gazprom, Aviashelf and possibly some other operators will hit the sky over the center of the Barents Sea still remains open. The helicopter operators depend on the economic situation and can’t forecast the situation. Their helicopters are servicing other offshore projects as the key market players keep postponing the Shtokman. This project’s risks are high and so is the level of profitability.

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