Eugene A. Titkov, President of FDP Engineering, LLP

Managers of oil and gas industry nowadays face exceptionally comprehensive tasks of complex nature when selecting the business development strategy and making operational decision. Even the most experienced managers often require an outside view at the strategies, tactical solutions and applied business processes that they develop. FDP Engineering, LLP along with Ryder Scott Company (USA) are happy to take part in the process of internal audit of client’s petroleum reserves, analysis of available portfolio of prospecting and exploration assets, to provide consulting services in the process of acquisition of hydrocarbon assets, their exploration and development, along with other required services.

Success story of FDP Engineering

Presentations to the Board of Directors

Provision of objectivity in technical matters of concern with an analysis of all advantages and disadvantages of discussed approaches. It can also be done in form of presentations for limited internal use.Presentation evaluates strengths and weaknesses of suggested strategies or tactical plans, and contains recommendation for the board of directors, based on the assessment of technical and business risks.

Expertise of suggested contracts and agreements

Making recommendations on modification of contractual documents in order to ensure the mutually beneficial terms and conditions in the agreements on oil and gas production, establishment of joint ventures, production sharing agreements, etc.

As part of this service, we suggest to test and incorporate optional scenarios into economic models to evaluate their relative effects. We can also support our clients during the negotiations on revision of the provisions of production sharing agreements; acquisition, prolongation or expansion of pipeline pumping quotas; correction of field development plans; suggested maximum efficient rates of production; etc.

Design of exploration works’ scenarios and their influence on future production levels

Expert assessment of risks for the preparation of client’s exploration programs. Expertise may include the following range: from defining of structural traps to drafting exploration drilling programs and modeling of deposits with the final goal to increase the profit of future exploitation of the deposits being explored. If necessary, we can provide recommendations on exploration strategy aimed at the maximization of return on invested capital and decrease of overinvestment.

Analysis of exploration works portfolio

We provide services on analysis of risks, evaluation of development options, and prioritization of sale and purchase of strategic assets.

The following list of services is not comprehensive:

• Evaluation of qualification level of the technical staff
• Analysis of interpretation of seismic data and geological mapping
• Determination of statistic ranges of reserves parameters
• Assessment of geological risk factors
• Working out of probabilistic reserves distribution models
• Design of economic models
• Updating of estimates basing on future well drilling.

Appraisal of gas storage projects

Ryder Scott Company has an in-depth experience in gas-storage projects, providing services from general consulting to drafting recommendations on selection of potential plots and detailed geological and engineering modeling. Services include inventory of the objects, technical and economic research and facility expansion studies. Resulting models may be used as a gas storage tool in order to forecast the gas delivery and injection rates during the process of its operation. That is a reliable inspection tool to ensure that the use of gas is consistent with the storage capacity, expected production decline and future contractual obligations. FDP Engineering plays supporting role in these services.

Internal audit of reserves

As part of this service we provide our client with our most experienced specialists who become the members of the Client’s internal management team, responsible for the audit of reserves. Such team usually includes the Client’s reserve management leader, senior petroleum engineer; senior geologist and geophysicist. Team meets the representatives of producing divisions, examines existing reserves and highlights potential problems that need to be addressed in a timely manner.

Internal team analyses the company’s resource base and procedures of its booking and planning, and delivers recommendations for example on allocation of additional labor and financial resources to maintain the required level of the company’s resource base. Teamwork may include finding of reserves growth acceleration tools or confirm the unbooked reserves of the company.

Provided consultants may take part in the assessment of possible usage of other oil companies experience on complicated issues pertaining to reserves; or in evaluation of influence of regulating authorities’ requirements and directions.

Litigation and arbitration support and conflict resolution

Our colleagues from Ryder Scott have enormous experience in expert-witness testimony and technical research and analysis for assisting in court proceedings, arbitration hearings or meetings with state regulatory authorities. Professionals of FDP Engineering, LLP also took part in similar processes, including a case in the International Arbitration Court of Stockholm (Sweden).

As part of this service we also provide technical and strategic support to client’s management and legal staff in disputes related to redeterminations and unitizations. Together with our partners from Ryder Scott we provide coordination and control of integrated groups of technical specialists participating in the proceedings at major centers of international arbitration. We closely work with law professionals in order to determine relative advantages and disadvantages of technical argumentation and to present the technical information in the form of clear and interconnected legal evidence.

Analysis of the Client’s marketing policy and reserves management system

These services may include the market analysis of hydrocarbon resources, evaluation of entering or exiting the market on country or oil&gas basin level, development of early field exploration strategies and assessment of related risks, working out of field development strategies and modeling of related expenses. Whenever possible we provide recommendations on acquisition and divestiture strategies pertaining to oil and gas assets.

Evaluation of manpower resources with respect to the reserves management system

These services include evaluation of how the Client manages its mineral reserves, analysis of staff functions and manpower resources required to optimize such activities.

Development of negotiation strategy and participation in negotiations

We’re ready to provide support during contractual negotiations. Level of technical background of our professionals makes them capable to confidently guide the negotiation process. Specialists involved actively participate during the negotiation process, assess the proposals and counterproposals, determine arising opportunities and pitfalls.

Standardization of corporate processes and procedures

Within this type of services we analyse, compare and standardize corporate procedures in-use in various Client’s sub-divisions in order to ensure their consistency. These services allow the Client to better compare and assess the results from various departments based on objective criteria. Involvement of an independent third party allows determination and implementation of new standards at the Client’s sub-divisions, based on recommendations of an independent consultant rather than on approaches of often competing with each other sub-divisions.

Development of the reserve management system

Our specialists design the reserves management systems that integrate the management process, software and human resources to allow efficiently account for changes in quantity and quality (categories) of reserves. Such systems enable the Client’s management to make decisions on all assets, including acquisition and divestiture, exploration and development of fields, including reservoir management, as well as other upstream operations.

Development of the reserve management system includes charting workflow, calculation of lead time for each stage completion and integration of this process with relative software and databases.

Solutions that we offer together with our colleagues from Ryder Scott Company vary from custom to commercial and integrated products allowing elimination of excess and inefficient decisions. Ryder Scott develops custom software products for evaluation of reserves and for other technical tasks in case commercial products can’t satisfy the Client’s needs.

We offer inexpensive software products that fit Client’s needs on a freeware basis since development and distribution of software is not a main field of our companies’ businesses.

Moreover neither FDP Engineering nor Ryder Scott has property shares in the capital of any software developers or computer manufacturers. This guarantees that our recommendations are objective and independent.

Selection of reservoir simulation objects

This service by Ryder Scott and FDP Engineering is offered to examine core objects of oil and gas property to ensure proper application of numerical simulation methods. Based on a general review we make decision on whether or not it is necessary to conduct the flow simulation for the future development of the field or for its sale. Under the guidance of Ryder Scott professionals we also develop recommendations on application of other evaluation methods when usage of hydrodynamic simulation is not a logical and cost-efficient choice. We prepare reviews of the current or potential projects to prioritize technical and technological expenses to ensure maximum profitability and return of investments.

Personnel Training

Ryder Scott and FDP Engineering conduct many client-oriented events that serve their different purposes. They include schools, practical seminars and trainings on methods of reserves estimation and definitions, preparation of reserves’ reports for public stock offerings, on probabilistic evaluation of reserves and reservoir modeling. We also provide user manuals on the procedure of reserves assessment and documentation for related software products.