Vasile Mogos, Managing Director, VP Eastern Hemisphere at CDI Oilfield Services ELS
Romanian Business Model to Be Expanded Internationally
CDI Oilfield Services, a subsidiary of the US company Endurance Lift Solutions, was established in 2007. The initial business model – assembly and repair of downhole pumps, represented the foundation for the subsequent evolution of the company. The same year, CDI opened the first Centre of pump and equipment repair and assembly in Romania, equipped and operated at the international standards of the oil and gas industry. Then, in 2015, the Centre of Excellence was opened, designed as a platform of production, development, innovation, training, storage, processing, and integration of data, to serve clients.
We are talking with Vasile Mogos – Managing Director, VP Eastern Hemisphere at CDI Oilfield Services Endurance Lift Solutions (ELS), about the important steps taken by the company in the almost 14 years since establishment and about the future stages, in conditions of maintaining the performance of equipment and services both domestically and internationally.
Dear Mr. Mogos, how do you estimate the course of the company in the almost 14 years of activity on the Romanian market, but also at international level? What are the most important achievements so far?
Vasile Mogos: First of all, I would like to personally thank you and also on behalf of CDI colleagues and investors for the attention and support which our company enjoyed since the very beginning of this collaboration.
I would take the opportunity to thank our partners, OMV Petrom, Mazarine Energy, Expert Petroleum, which benefited from the expertise of our services and our well pumping products quality.
The evolution of CDI Oilfield Services is a successful story written by the people and for the people. I say this because the support of our investors and the efforts of my colleagues, from both management and pump shops levels, have a very important contribution to optimizing the activity of our partners in their oil well operations.
Few years back I was telling you that, on its way to the surface, every drop of the millions of barrels produced in Romanian oilfields is passing through the downhole pumps manufactured by CDI. We are proud and honored with our position in the oil and gas industry in Romania.
Our achievements are not necessarily quantified in turnover but rather in increasingly longer life span of our equipment, the swift delivery of pumps and equipment for thousands of interventions and in the client satisfaction. These indicators are at the level of the highest international standards in the sector, and they naturally result in medium and long-term partnerships, thus ensuring the financial sustainability of the company and subsequent investment availability.
Given that some time has passed since our previous discussions, what’s new in CDI Oilfield Services’ portfolio of products and services for the oil and gas industry?
Vasile Mogos: The novelties made available to our clients are designed to address the increasingly complex problems raised by the operation of brownfields as those in our country. They are designed to optimize production costs by increasing the pumping system efficiency and reducing the total cost of ownership.
I would mention here the diversification of the downhole pumps’ portfolio in terms of metallurgy and design, the expansion to a large range of fiberglass rods, installation and maintenance of wellhead gas compressors and downhole equipment having a special contribution in reducing and eliminating production losses due to accidental shutdowns of production wells.
Also, for the wells prone to paraffin deposition, thermochemical treatment solutions have been tested which proved their effectiveness by swiftly cleaning the rods and tubing string without pulling the wells.
How do you manage to maintain the performance curve of equipment and services for clients, both locally and internationally?
Vasile Mogos: The performance of CDI equipment is a day-to-day priority which is primarily based on an excellent collaboration between our teams working in the pump shops, procurement, operational, engineering, quality and financial departments and our partners’ teams of specialists.
The quality of CDI services and products represents the second ingredient for the current performances and a guarantee for the future ones.
The services provided by CDI have a spectrum that goes beyond the activity of pumps and downhole equipment maintenance carried out at the shop floor level. The support of this activity is provided by dedicated engineering and logistics services.
Moreover, the Upstream Interface Platform used for the registration, tracking, analysis, and reporting of causes of malfunctions connects the monitoring team with each pump shop and with our partner team of specialists resulting in solutions which are further optimized to make the right decisions in a timely manner. Therefore, this team effort results in extending the runtime of the equipment between interventions with tens or hundreds of days beyond the increasingly higher targets.
With regard to international clients, the quality of CDI products recommends us to continue collaboration and develop the same towards replicating CDI integrated model of manufacturing and delivery of new pumps along with providing the inspection and repair services thereof in spite of occasional local limitations.
You said the development of partnerships with national and international companies to replicate the CDI business model is a priority for the company. What actions do you carry out in this regard and what are the partnerships currently in progress? What programs and plans are there for the future in this respect?
Vasile Mogos: By far, the longest-running partnership is with OMV Petrom which has a history of over 13 years and will continue with a seven-years contract which was awarded to CDI following a highly competitive public tender in December 2020. We pay the same attention to the other local operators such as Mazarine Energy and Expert Petroleum whereby we act in a similar manner supplying downhole equipment under “CDI inventory on customer’s shelf” concept.
Internationally, we pursue on our priority projects with our partners in Oman and Indonesia. These projects implementation has suffered delays due to travel restrictions. Fortunately, facilities meant to accommodate the downhole pump assembly logistics and the necessary inventory have been completed.
Special attention is paid to operators in Europe. We are currently qualifying our products in Serbia, Croatia, Hungary, and Germany with local operators.
CDI has a strategic position being the only API 11AX licensed pump manufacturer in the region having the ability to cover immediate needs due to a generous and diversified inventory.
Due to improved exploration technologies, we can have access to new oil and gas fields. However, challenges faced by the oil and gas industry are constantly growing. What are CDI’s strengths in supporting operators interested in the increase in productivity, as well as in cost optimization?
Vasile Mogos: As mentioned earlier, the effort is either to manage the problems raised by pumping wells in mature reservoirs with low pressure and flow rates, but also, as you mentioned, new fields at depths that exceed traditional limits.
The package of solutions and products proposed by CDI to meet the needs of operators aims at optimizing the well operation costs by increasing the efficiency of pumping and, where possible, increase the wells production.
Another direction we plan to develop is rental of pumping equipment to operators who are planning to test new wells or resume pumping at wells which have shut down for economic reasons.
What are the most important segments to which company’s investments are currently directed?
Vasile Mogos: Thanks to a particular interest of our investors in the company’s development based on a solid position on the market, CDI has initiated an investment of over EUR 500,000 which will be completed this year through which we aim to develop the domestic manufacturing of an extensive range of pumping equipment. This project joins the efforts of our R&D department, which aims at researching the most efficient solutions and equipment to meet the increasingly complex requirements of our partners.
What measures do you consider for the efficient conduct of business in conditions of the COVID 19 pandemic? What are at the moment the greatest challenges for the company?
Vasile Mogos: As we speak, the measures taken by CDI in 2020/2021 in the context of the pandemic have already shown their effectiveness. We are proud to confirm that, although a large part of our suppliers are US or Canadian companies, the risk plan we have prepared with our partners starting with Q1/2020 enabled us to carry out the activity without delay due to inventory or staff availability. We are talking here about thousands of pumping wells, thousands of inspections and repairs along with the delivery of hundreds of new pumps and equipment at any time of the day and night.
This period has allowed us to assess and prove our capacity of supporting both financially and logistically the management of an inventory that ensures the performance of our clients’ activity without interruption under restrictive conditions on delivery and international transport.
Challenges always follow challenges. Today, amid an imbalance between demand and supply, we are facing alarming increases in the raw materials prices with impact on suppliers’ prices for parts and equipment. I would expect this phenomenon to be temporary and that the situation will be balanced in the short and medium term.
Integration of labor force in the oil and gas sector remains a sensitive point on employers’ agenda. What is the situation at CDI in this chapter?
Vasile Mogos: CDI pays special attention to conditions of ensuring the stability of employees and the pandemic period has proven the importance of a team prepared to comply with the principles of organizational culture and company’s procedures, including the extreme ones imposed by the need to protect against infection at work.
Rejuvenation of the workforce is an ongoing concern, and we are making special efforts to recruit young talent. To this extent, we are happy to have two key positions, managing the business development department and the engineering department, which are held by persons just little over 30 years of age. We are equally focusing on the knowledge transfer from the senior employees to the young generation.
We also support the partnerships with the Petroleum-Gas University of Ploiesti and other institutions or national and local communities in the development of joint internship programs and in the direction of popularizing the company’s activity.
You registered, over the years, remarkable results in your field of activity. What are your estimates for this year?
Vasile Mogos: For us, the current year is a year of resetting goals and priorities. It is a year in which we reposition our company in the light of the investments we have initiated but also under the new market conditions. Mankind is slowly awakening from numbness. The stones may no longer fit on top of each other after many of the buildings we consider millennial have been demolished.
Beyond these trials for which we are prepared, we are aware that better results require increased efforts by the entire CDI team. I have great faith in my colleagues!
What are CDI objectives/prospects for the following period and the medium and long-term strategies for a sustainable development of the company?
Vasile Mogos: As mentioned, CDI enjoys the confidence of investors. I would thank Mr. John D. Schmitz, CEO Endurance Lift Solutions (ELS), who has always shown his confidence in CDI performance and pursued on well-founded investment projects.
In addition to the own portfolio, we also have access to the product portfolio of ELS Group, ESP pumps, Plunger Lift, Fiber rods and other special equipment and solutions, which will definitely strengthen our position as supplier of products and services for the whole spectrum of pumping applications.
We are closer to replicating the Romanian business model on international markets. Travel restrictions have slowed down this project but did not cancel the partnerships developed over time.
Although the focus on renewable energy sources is extremely strong, oil and gas will continue to be essential sources of energy in the following decades. Owners, investors, operators are facing large investments, new technologies, increasingly stringent legal, commercial, and environmental requirements. How do you see the future of this significant sector of the economy?
Vasile Mogos: The oil and gas industry in Romania is by far an emblem we should be proud of. Romanian specialists are met in companies with global tradition and reputation.
I would add that, in Romania, looking at the number of filling stations and especially at the car market growth and the overcrowded traffic, petroleum products have a generous market.
How the needs will be met under more aggressive environmental conditions is a question whose answer will be found in the continuous development of technology, from the drilling, extraction, refining activities to marketing. I would leave the emissions from the exhaust pipe to car manufacturers. However, since CDI is found in this puzzle, it is natural for us to be part of the effort to make the oil and gas industry more friendly.