History

Late 70s — early 80s of the 20st century is the time of great slogans: «Motherland needs vast natural wealth of Tyumenskaya Oblast!», «Our goal is more oil to the country», «Let’s produce 500,000 tonnes of oil daily!» «A million of tonnes of oil, a billion of cubic meters of gas per day!»

This period saw creation of the Soviet oil and gas industry, unprecedented growth of enthusiasm and optimism as well as building of highly professional oilfield workers teams. Large-scale capital investments, formation of scientific school, unique projects on development and exploitation of oilfields in Western Siberia, rapid development of oil producing and oil refining industries, and manufacturers of oil and gas equipment — these years without exaggeration can be called the years of achievements for the oilmen. Later, the period will be referred to as the years of «easy» oil.

Pursuant to Order No. 495 of the Ministry of Petroleum Industry dated 15 September, 1977, production associations were established in Surgut, Nizhnevartovsk and Nefteyugansk.

Production Association «Surgutneftegas» consisted of two oil and gas production divisions «Surgutneft» and «Fedorovskneft», two drilling divisions, construction divisions, «Surgutneftespetsstroy», Central Base for Lease and Repair of Drilling Equipment, Backfiling Operation Office, Industrial Transport Division and Surgutskoye Motor-Roads Division.

The territory of oilfields to be developed by the Company was vast — from deep forests of Salym to Kholmogorsky watershed, Lokosovо, Langepas, Noyabrsk, Kogalym, Muravlenkovsky District and Purpe. Hundreds of kilometers of offroad, complete lack of amenities at oilfields and drilling sites and persistent logistic support challenges — how could people who were living and working for getting a feeling of warm beat of the first oil in a pipe overcome these obstacles — only being courageous, enduring and stout-hearted and possessing creative mind, bold engineering ideas, innovativeness and enthusiasm.

By late 1970s, Surgut was nicknamed «The Oil Capital of Siberia»; it became the centre of development for the north of Tyumenskaya Oblast. By then, the town could boast the powerful power generation base running on associated petroleum gas, the largest construction industry in the region, a railway, highways and an airport.

Like many other enterprises in that period, every year, Surgutneftegas constructed social amenities — schools, hospitals and nursery schools.

As for logistic support of production processes, the oilmen faced a large number of challenges. Oil production plan was required to be implemented at all costs but at the same time it was not possible to get all necessary items to do so. On the one hand — planned economy, on the other hand — one had to literally grasp everything that was provided from funds and according to distribution lists and limits. Foreign equipment was purchased centrally but its quality and required volume were not discussed with the oilmen.

Lack of proper logistic support, quality advanced equipment and machinery affected the status of wells and rate of infrastructure facilities construction as well as slowed down development of the repair base which had vital necessity in view due to its remoteness from the industrial regions.

Despite these circumstances, the Surgut oilmen managed to constantly increase oil production. Thus, 1984 marked the Company’s record level of 67.5 million tonnes of oil. This peak was reached at the time when the world oil production rate was approaching the lower point of downturn and the growth rate was apparently decaying in the Russian part of the USSR.

Oil industry reorganization started in 1992.

Oil company «Surgutneftegas» united oil producing entity «Surgutneftegas», Kirishi oil refinery and a number of petroleum products supply enterprises in the North-West of Russia.

It was quite a difficult task to integrate in the short term distant enterprises different in structure and technical level into one technological complex which could not only ensure production, refining and marketing volumes but also was efficient and profitable. After Surgutneftegas had overcome the difficulties of the set-up period, it became a well-organized, well-run and efficient vertically integrated company.

During the years of operation in new economic environment, the capacities of all enterprises that merged with the Company grew significantly, their production facilities were completely upgraded, a detergent production plant, which is second to none in Russia, was put into operation, Prospecting and Exploration Division, one of the biggest in Russia, was established, Company’s R&D and Project Complex with a big scientific potential was developed, Company’s own gas processing plant was constructed, a small-scale power generation development program was implemented on the basis of construction of gas turbine and gas reciprocating engine power plants and a powerful oil & gas production facility in the Republic of Sakha (Yakutia) was created, which provided oil production in new oil and gas province of Russia. Surgutneftegas has become a high-end energy company.