Bentec Invests in Major Rig Fabrication Plant in Tyumen, Siberia

Bentec Drilling and Oilfield Services is investing more than US$20 million in a major rig fabrication facility in Tyumen, Siberia. Scheduled to become operational in the second quarter of 2008, after major refurbishment, the facility will produce between eight and 12 rigs a year for the Russian market.

Making the announcement at the Moscow International Oil and Gas Exhibition (MIOGE) on 26 June, Bentec said that it had signed an agreement with Tyumen Motorstroy (TM), a former aviation gas turbine manufacturer, with extensive machining and other technical capability, for the purchase of existing office and workshop buildings and the lease of 80,000sqm of land on TM's site at Tyumen Oblast. The site has direct road access and a railway spur, providing links to Russia's railway network.

Scheduled to become operational in the second quarter of 2008, the facility will employ between 300 and 350 people, the majority of whom will be recruited locally and undergo extensive training. Norbert Gebbeken, Bentec Managing Director, Commercial, commented: "Russia is a significant growth market for Bentec with an estimated 400 to 600 rigs required over the next five to six years to replace the country's ageing rig fleet.

"We have achieved considerable success with our hybrid HR-5000 rigs, which combine the best features of Russian built rigs with state-of-the-art western technology and engineering. Six of our HR-5000 series hybrid rigs are already working in Russia for TNK-BP under contract with KCA DEUTAG and we are building four HR-4500 series rigs for BKE Drilling Company, Moscow for operations in West Siberia. We also anticipate further similar contracts with other major oil operators in the country.

"The rationale for investing in a fabrication plant in Tyumen is to bring us closer to our customers, allowing us to further improve the service we provide them. Is also allows us to mitigate the cost of transporting rigs from Germany to Russian, which can be between US$1.5m and US$2m per rig.

Tyumen Motorstroy also has excellent galvanizing and machining facilities which will allow us to sub-contract out the steel construction work on the same site.

"The Tyumen facility will encompass rig construction and assembly for the Russian market, with key components initially continuing to be made in Germany and transported to Tyumen."

A model of the HR-5000 series rig will be on display at MIOGE, the Moscow International Oil and Gas Exhibition, from 26-29 June on the Bentec stand, number 2247 in Hall 2, Pavilion 2.