Anniversary without fanfare: what has Rosgeologia achieved in 10 years of its existence

Moisey Gelman, Candidate of Technical Sciences, Editor-in-Chief of the Promyshlennye Vedomosti newspaper

I was surprised that after the laudatory congratulations there was no rewarding of the deserved comrades, as usual.

On the official website of Rosgeologia, in the section Enterprises of the holding, it is said about the outstanding successes of the company:

“The holding's enterprises have discovered more than 1000 fields, among which are the largest deposits of hydrocarbons and solid minerals, such as: Astrakhanskoye (2.5 trillion m³ of gas), Tengiz (3.1 billion tons of oil), Kovyktinskoye (1.9 trillion cubic meters of gas), Sukhoi Log (2000 tons of gold), Kursk magnetic anomaly and many others”.

The affirmation smacks, to put it mildly, with great slyness. After all, the listed deposits were opened by the enterprises of the USSR Ministry of Geology long before the creation of JSC Rosgeologia, which is not the legal successor of any Soviet organization. Thus, the Astrakhan gas condensate field was discovered in 1976, the Tengiz oil and gas field, which belongs not to Russia, but to Kazakhstan, was discovered in 1979, the Kovykta gas condensate field - in 1987, the Sukhoi Log gold and silver field, called the USSR's "stash", opened in 1961. But the Kursk Magnetic Anomaly, one of the world's largest regions in terms of iron ore reserves, was found in these places by such an "original" geophysical method based on abnormal jumps of the magnetic compass needle in the time of Tsar-Father Alexander III in 1883; Union in 1931. The same can be said about other "more than 1000 deposits" discovered in Soviet times. But over the past 30 years, not a single new large mineral deposit has been found in Russia. And all the increments in reserves over the past decades have also been obtained through the use of the prospecting stock of the past years. However, they do not fully compensate for the extracted and consumed volumes of mineral raw materials.

If we take into account that the preliminary estimated reserves and probable resources determine the prospecting and exploration reserve and, consequently, the possibilities for the development of the mineral resource base, then the current situation with its reproduction is very alarming. The analysis of the current situation is detailed in the publication of Doctor of Technical Sciences, Professor Yevgeny Kozlovsky The Systemic Crisis of Subsoil Research and Ensuring the Mineral and Raw Material Security of the Country ("Promyshlennye vedomosti" No. 1-2, April 2016).

What is the “ significant contribution to the study of the subsoil, ...bringing to life the demanded projects for the search for promising areas of mining, the development of deposits in the Arctic shelf”, does the holding make? This was explained by the Chamber of Accounts in its recent report, published in May. It said:

“As of January 1, 2021, work (stages of work) has not been completed on 45 contracts in the amount of 4.138 billion rubles, or 27.7% of the envisaged volume, including 37 contracts concluded in 2016-2019, in the amount of 4.021 billion. rubles".

In 2019, government contracts worth 4.9 billion rubles were not executed. The largest volume of unfulfilled obligations was formed under contracts for the reproduction of the mineral resource base of hydrocarbons in the amount of 3.28 billion rubles, which is 81.6% of the total cost of outstanding work.

Until the beginning of 2020, the holding was a monopoly executor of state orders for the exploration of minerals. According to the Accounts Chamber, in 2015-2019, Rosnedra signed 248 contracts with the holding for 76 billion rubles, but in 2020 - only for 6.5 billion rubles, since other enterprises admitted to the competition offered more favorable terms of execution government orders. In 2019, Rosgeologia's losses exceeded 4 billion rubles.

The report of the Accounts Chamber noted that Rosgeologia mainly functions through government contracts, the proceeds from which account for more than 80% of the proceeds. Moreover, the share of work under contracts carried out directly by the parent company, JSC Rosgeologia, is only about 10% in value terms. The bulk of the exploration work was carried out by subcontractors from among the holding's subsidiaries and third-party organizations, some of which did not fulfill their contractual obligations.

In April of this year, Deputy Prime Minister and Presidential Plenipotentiary in the Far Eastern Federal District Yuri Trutnev instructed the Minister of Natural Resources and Environment to investigate the reasons for Rosgeologia's failure to explore gas fields in the Kamchatka Territory for three years and the ineffectiveness of geological exploration in Yakutia. The disruption of work on the search for gas forced the power engineers of Kamchatka to resume the use of fuel oil instead of gas at local thermal power plants, which led to annual losses of three billion rubles.

As for the development of the Arctic shelf fields by the holding, this statement was also erroneous. After all, Rosgeologia is looking for new deposits, and their development, that is, exploitation, including additional exploration of the exploited deposits, is the subject of the mining companies' activities. As for the work on the Arctic shelf, the holding has carried out only a relatively small amount of geophysical research there using the vessel. The holding does not have the necessary equipment for exploration drilling on the Arctic shelf.

Over the ten years of Rosgeologia's existence, four general directors have changed, and none of them had any education in any geological specialty and had never worked in geology before being appointed to the holding. Two of them were forced to leave after serious scandals. Since April 2019, the holding has been headed by former Vnesheconombank CEO Sergei Gorkov, who, unlike his predecessor, a linguist and translator, is a financier by education and professional activity.

And the fundamental reasons for the failures in the activities of Rosgeologia, as in the vast majority of other enterprises in the country, lie in the vicious economic policy of the state, which impedes the sustainable development of the country. Sustainable development is understood as the ability of the state to expand the reproduction of the aggregate national capital by the expanded reproduction of all its components.

In Soviet times, the Ministry of Geology of the USSR - Mingeo, directly or through the republican ministries of geology, subordinated numerous geological enterprises in all regions of the country. Mingeo was an economic entity, within the framework of national plans for the development of the economy, it planned all work on the advanced search for new mineral deposits and the reproduction of the mineral resource base, coordinated their implementation and was responsible for their implementation. In the 1970s-1980s, the "golden age" of Soviet geology, many deposits were explored for future use, the reserves of which were sufficient for the ever-memorable 1990s and subsequent years. From 1975 to 1989, the USSR Ministry of Geology was headed by an outstanding world-renowned geologist, laureate of Lenin and several State prizes, Yevgeny Kozlovsky. After graduating from the Moscow Geological Prospecting Institute, he began his future labor, scientific, government and teaching activities as a worker of a geological prospecting party.

Nowadays, the management of exploration work is often entrusted to people without proper education and work experience, who have not gone through all the stages of professional skill.

Today, the Federal Agency for Subsoil Use - Rosnedra, which is under the jurisdiction of the Ministry of Natural Resources, has something to do with geological exploration. But it only organizes the state geological study of the subsoil, the examination of projects and the holding of tenders and auctions for the right to use the subsoil. Budget financing of these works is carried out through it. Therefore, Rosnedra plays only a certain intermediary role and is actually not responsible for the results of the work carried out by contractors. The number of geological organizations in the country has significantly decreased, and only about a dozen of them remain under the jurisdiction of Rosnedra.

While the Soviet raw material heritage was being “devoured” and plundered, two or three generations of specialists who created it almost disappeared, and the former harmonious system of scientific, prospecting and geological exploration work was destroyed. In fact, the state system of territorial production administrations - the basis of the former powerful Soviet geology - was also collapsed.

The scale of the collapse in Russia of the former state system of geological exploration and expanded reproduction of the mineral resource base is to some extent evidenced by the comparison of JSC Rosgeologia, which until recently monopolized state orders, with only one of the many organizations of the USSR Ministry of Geology - Glavtyumengeologiya , which was the most powerful geological survey in the world. In the late 1980s, at the time of its heyday, in Glavtyumengeologiya, only the main work - drilling and geophysical work was performed by 11 associations, 50 oil exploration and geophysical expeditions, the number of drilling crews was approaching a hundred, and the number of well testing crews - to 60. the structure of "Glavtyumengeologiya" consisted of three research and one design institutes, a computing center and a laboratory equipped with the latest equipment, as well as an expedition to calculate hydrocarbon reserves. By 1988, the total number of employees of Glavtyumengeologia reached one hundred thousand.

From 1953 to 1991, Glavtyumengeologiya discovered 550 oil, gas and gas condensate fields. Among them are unique with gas inventory over 500 Bln. M3 and oil over 300 Mill. Tonnes as Urengoiskoye, Samotlorskoye, Ob, Russian, Zapolyarnoe, Yamburgskoye et al. This was his "significant contribution" to the study guide "Rosgeologia" bowels for some reason forgot, or modestly, to mention. The largest discoveries were made when Glavtyumengeologia was headed by the famous geologists Raul-Yuri Ervie and Farman Salmanov. Ervier was the initiator and organizer of large-scale prospecting and exploration work in most of Western Siberia, which ended 70 years ago with the discovery and subsequent development of the then largest West Siberian oil and gas province in the USSR.

For a more complete comparison of the former and current state geological services, we will also compare the structures of Rosnedra and the USSR Ministry of Geology. At the beginning of 2017, Rosnedra was in charge of only 10 federal state unitary enterprises - research and production organizations, 17 budgetary institutions and 11 territorial bodies. As of January 1, 2016, the number of employees of the central office of Rosnedra was 109 people, of territorial bodies - 690 people, and employees of subordinate organizations - 10,432 people.

For comparison: in 1978, 67 production geological associations, five production and two research and production associations operated in the USSR Ministry of Geology. The main production unit was exploration expeditions, the number of which in different years averaged about 650. A unique All-Union industrial association for the production of exploration equipment was created in the ministry. The staffing of the central apparatus of the ministry was set at 621 people. According to estimates, the number of employees of geological organizations on the territory of the RSFSR reached 800 thousand people. The total number of employees of Rosnedra and Rosgeologia with enterprises does not exceed 26 thousand, that is, almost four times less than in Glavtyumengeologia.

Now Rosnedra is headed by a geologist, but before him for six years Rosnedra was headed by ... a veterinarian. The bosses of Rosgeologia, in contrast to the heads of Glavtyumengeologia of the Soviet era, are very similar in their education and work experience to the leadership of the Ministry of Natural Resources. This is where the main goals of the holding's management stem from. According to the results of the first audit of the Accounts Chamber, carried out in 2017, the average annual salary of managers of the parent company Rosgeologia from 2015 to 2017 was about 750 thousand rubles. It was 15 (!) Times higher than the average annual salary of the holding's employees. Note that in the USSR, the earnings of well drillers often significantly exceeded the salary of the Minister of Geology, but which was only three times higher than the average salary in the industry.

As noted, the share of work under contracts carried out directly by the parent management company Rosgeologia is about 10% in value terms. However, its income in the total revenue of the holding is almost half and accounts for a third of its profits. The Accounts Chamber also established that the Rosgeologia management company receives considerable income from the transfer of powers of the sole executive body by its subsidiaries, as a result of which the holding's general director became their general director at the same time.

In addition to the aforementioned paid services, on the basis of agreements concluded with its subsidiaries, Rosgeologia also exercises the powers of the sole executive body to manage their current management activities, including monitoring financial flows, resolving property and personnel issues. For this, the parent company "Rosgeologia", in accordance with the terms of the contracts, also withholds up to 5% of the income of the subsidiaries.

Another innovation is that the managing directors of the holding's subsidiaries are full-time employees of ... the parent company Rosgeologia. For some reason, they also sign all contracts with her, and the general director of the holding, as noted, is the general director of almost all "daughters". The absurdity and viciousness of such management is obvious, given the scattering of subsidiaries throughout the country. In particular, in such relations of economic entities, the stipulated measures of liability of the parent company are not implemented, penalties and fines are not charged or collected. In the reports of the Accounts Chamber, it was noted that due to the centralized management of subsidiaries, the efficiency of solving many issues, including the implementation of work contracts, was disrupted, which affects the timing and quality of work. Details about the situation in the holding are described in the publication “Ryazhenye” geologists at the mineral resource base of Russia (“Promyshlennye vedomosti” No. 5, May 2018).

In the opinion of many experts, in order to ensure the country's mineral and raw material security, it is necessary to create the Ministry of Geology and Subsoil Use of Russia. In particular, several years ago authoritative experts, heads of the Association of Geological Organizations Evgeny Kozlovsky and Alexei Varlamov turned to the government with this proposal. They proposed to create a ministry by reorganizing Rosnedr with the transfer of the Department of State Policy and Regulation in the Field of Geology and Subsoil Use to the Ministry of Natural Resources of Russia, as well as all powers for legal regulation and control in this area. It was also proposed to transfer to the new ministry all geological exploration enterprises owned by the state, including subsidiaries of Rosgeologia, with their transformation into state organizations, and abolishing the holding.

There was no reaction to the appeal of authoritative geologists. The question is, do the authorities intend to restore and develop the country's mineral resource base as the basis of its national security, or will they get by with congratulations on non-existent successes?