Oilfield Services (part one)

An inverse problem is considered well-posed if all these conditions are met: a solution exists for any valid data, for each set of input data there is only one solution, and the solution is robust to small changes in the input data (Wikipedia)

1. Existence of a solution:

An inverse problem must have a solution for any valid input data. This means that for any realistic situation that we model with the inverse problem, there must be a corresponding solution.

2. Unambiguity of the solution:

Each input data set must correspond to only one unique correct combination of initial data. In an inverse problem, there must not be multiple possible correct answers for the same input parameters.

3. Stability of the solution:

The solution must be robust, meaning that small changes in the input data (for example, due to measurement errors) should not lead to large changes in the resulting solution. This feature is especially important for practical applications, where the input data often contains noise or inaccuracies.

Even if a problem is well-posed, it can still be ill-conditioned, meaning that a small change in the initial data can lead to significant changes in the resulting solutions. Ill-conditioned problems are characterized by many possible solutions.

If the problem is well-posed, there's a good chance of solving it numerically using the Robust Algorithm. If the problem is ill-posed, however, its formulation must be modified; this typically involves introducing additional assumptions (such as the smoothness of the solution). This procedure is called Regularization and has become widely used for solving ill-posed linear problems using a technique developed by A. N. Tikhonov.

When solving inverse problems of seismic exploration and gravity exploration, a properly selected method of regularization parameters (the form of the stabilizing functional) allows for solutions close to the true ones. If the reader is interested in more detailed information on my developments in this area, detailed information is available in my book "OPTIMIZATION METHODS OF INTERPRETATION OF COMPLEX GEOPHYSICAL INFORMATION" (ISBN 9785853580992 / 5-85358-099-X), published by SCIENCE Publishing House in 1991.

The SIDS_G Program complex has been successfully tested and implemented at many sites in the Caspian Basin and the Volga-Ural Region.

I also implemented the Regularization Methods approach when solving the inverse problem of seismic exploration for both one- and two-dimensional models. Together with D.N. Krylov, I developed the corresponding modeling program, which was incorporated into the SDS-3 software suite.

In 1988, the Soviet Union entered the era of "cooperatives," and many employees working in the "intellectual" sphere of production decided to try their hand at a new role—Individual Activity. The first example was a young engineer, Artem Tarasov who organized the Technika cooperative and became the first legal millionaire in the USSR.

Together with three employees of the Institute of Physics of the Earth, I also began a cooperative effort to create and distribute software for personal computers, the market for which was rapidly gaining momentum in the industrial and scientific fields of the USSR.

What haven't we done? Selling PC software, the market for which was rapidly growing (probably as rapidly as the rise of banditry and racketeering), cashing in USSR Government Loan bonds at various branches of Savings Banks, etc.

Through our contacts in the West, we purchased personal computers that were just beginning to appear on the market. The hardware cost us between three and five thousand US dollars (depending on the operating system configuration and the peripherals supplied—scanners, printers, etc.). We installed software (primarily accounting programs) on this hardware and sold it to various businesses (usually in provincial towns) at prices that significantly exceeded our own costs.

Cash withdrawals were made at regular savings banks by purchasing 2% government loan notes. Today, such interest rates are hard to imagine! Those were the romantic times – we carried the money ourselves in backpacks. Transportation was either by car or train, as flying was dangerous due to baggage screening procedures – there was certainly a certain risk, but we were young – and most importantly, "Hungry!"

That same year, 1988, I met Vasily Shlykov, then a little-known actor and stuntman, and briefly became a member of his team. It was a wonderful time, full of unforgettable emotions and adventures!

In 1990, I met my future wife, Ute Beckmann, and moved to Germany for permanent residence. There, the next stage of my adventures would begin.

3.INTERNATIONAL COMPANIES

3.1. SCHLUMBERGER (1991–2004)

After my move to Germany at the end of 1990, I soon received a job offer from the German Geophysical Company PRAKLA – SEISMOS AG.

As a German state-owned service company, PRAKLA-SEISMOS AG had exclusive rights to operate in fields in Syria and Libya, where access for American companies was restricted by both the US government (sanctions) and the Syrian and Libyan governments (the presence of US citizens in these countries was unsafe). This made PRAKLA-SEISMOS AG an attractive acquisition target for American and international oil and gas operators and oilfield service companies lacking access to the North African oil and gas market.

At the beginning of 1991, PRAKLA-SEISMOS was acquired by SCHLUMBERGER and became part of the GECO-PRAKLA division (Norwegian GECO, Canadian SONIC-EXPLORATION and German PRAKLA-SEISMOS), which provides a full range of seismic services (ground observations, data processing and interpretation).

During my first seven months with the company, I worked as Deputy Head of the Seismic Crew, first in Northern Germany (a newly acquired asset – Delft Geophysical) and then in the Canadian Arctic (also a newly acquired asset – Sonics Exploration). The initial plans of the GECO-PRAKLA Management were for me to be involved in the then-started field seismic research conducted for Elf Aquitaine in the Aktobe region (Northern Kazakhstan) and in the Timan-Pechora region. However, due to the increasing growth of business in the field of geological and geophysical information analysis, in May 1992 I was transferred to the Interpretation Department, where I soon became the head of the Eastern European branch of the Geological and Geophysical Data Modeling Department (I was responsible for the commercial promotion of the CHARISMA-RM (Reservoir Modeling) software package in the CIS markets).

At the beginning of 1992, this department was merged with the department of processing and interpretation of Geophysical Well Survey data and renamed the SCHLUMBERGER DATA SERVICES (SDS) Division.

Рhe CIS market was developing rapidly, and to support this technical development, the Schlumberger Training Center (SDC) was established in Hanover in mid-1992. It began training Russian-speaking Schlumberger customers. Initially, I handled administrative matters and soon became the Center's director. It was during this time that I met a large group of experts from Russia, Kazakhstan, Belarus, the Baltic States, and Poland, with some of whom I subsequently developed long-term, trusting, and even friendly relationships. Among the largest projects completed by the Training Center were undoubtedly those training specialists from the MegaCenter of the Ministry of Oil and Gas Industry (see 3.1.4.1), Yukos Oil Company (ROSNEFT), Lukoil, and many others.

In September 1992, the Schlumberger Data Service (SDS) Eurasia First team was formed – it consisted of only three people (LinkedIn):

1) Sergey FILIN – specialist in technical support of software in the field of seismic data interpretation – CHARISMA.

2) Andrey KALINICHEV – specialist in technical support of software in the field of Database Storage and Management – FINDER.

3) I was the third member of the team whose responsibilities included supporting the software for constructing the Geological and Hydrodynamic Model of the Reservoir – CHARISMA RM (Reservoir Modeling).

A little later, Alexander RACHINSKY (IT service) and Alexey MUSTAFINOV (Petrophysics) will join us.

In the same year 1992, Schlumberger acquired GeoQuest and the SDS division was further developed under this brand.

Schlumberger GeoQuest's business in the Eurasian region is gaining momentum, and the need is arising to establish technical support offices for the Company's operational activities near Customer offices.

At the end of 1994, I was offered the position of head of the Company's newly created division, responsible for operations in Eastern Europe. My area of responsibility would include Poland, the Baltic States (Latvia, Lithuania, and Estonia), Ukraine, and Belarus. It's worth noting that, aside from a few small-scale contracts in Poland, SCHLUMBERGER had no manufacturing operations in the countries within my geographic area of responsibility.

So, I had to build this business from scratch.

Today, concepts like "Remote Office" have become the norm, but back in the early 1990s, this approach was quite rare, and I was fortunate to be one of the pioneers of this production model. During my previous work at the Training Center, I had the opportunity to meet many specialists from Russia, Poland, Lithuania, Ukraine, Belarus, and Kazakhstan, so I already had some initial plans for what to do next.

Today, more than thirty-five years after those wonderful times, I remember how wonderful it was back then (that's probably how most people describe their youth). And yet, we were entering an era of new relations between East and West—we were full of hope, and the horizons of an optimistic future were clearly visible before us. Business in the CIS countries was unfolding like a giant machine, gaining momentum.

By 1995, my management decided to temporarily transfer me to Kyiv/Gomel, where I was to establish the first Representative Office of the Schlumberger Company in Ukraine/Belarus/Baltic States. Part of my responsibilities also included technical support for the Company's customers in Poland.

By this time, our family already had three boys. The eldest was three years old, and the twins were only one year old. So, my wife and I decided to take our time with the move and wait to see how the business developed. So, for the first year, I had to work remotely constantly, flying between Ukraine, Belarus, the Baltics, and Hanover, where my family lived at the time.

3.1.1.UKRAINE – First Stage 1995–1997

In early 1995, having packed my suitcase and a SUN Microsystems Workstation (with which I planned to conduct technical presentations of Software to Potential Customers from the Baltic States, Belarus and Ukraine), I flew to Kyiv, where I rented a small Apartment, which became my First “Mobile” Office.

Kyiv was chosen based on the consideration of the greatest coverage of potential customers, which included both state-owned companies of Ukraine – the Ministry of GEOLOGY, industrial enterprises for oil and gas production – JSC UKRNAFTA, JSC UKRGAZDOBYVANIE, GAO CHERNOMORNAFTEGAZ (NAFTOGAZ of Ukraine will be formed only by the end of 1997 and there will be a separate History about this, which we will return to below) and many private service and production companies with both national and mixed capital (UkrGeophysics, Service Company NADRA, Carpatsky Petroleum, Poltava Petroleum Company and many other joint ventures created by the management of UKRNAFTA and UKRGAZDOBYVANIE).