René Kachyňa interview to ČTK

Based in Lužice in the Hodonín district in the Czech Republic, MND Drilling & Services specializes in drilling wells for the extraction of crude oil and natural gas. Despite the drop of oil prices on global markets in recent years, the company has been successful in winning contract abroad. Every year, MND Drilling & Services enters a new market in one or two European countries. Currently, the company is taking steps to establish itself on the Dutch market, as reported by Chairman of the Board of Directors René Kachyňa in today's interview to the Czech Press Agency.

The Lužice-based enterprise is a subsidiary of the MND oil and gas company. Together, they are members of the KKCG Group owned by entrepreneur Karel Komárek. Originally, MND Drilling & Services operated as a drilling contractor that only catered to the needs of its parent company. "Because extraction in Moravia has been going on for 100 years and because the deposits will be inevitably exhausted one day, we have started to look for contracts in foreign countries. Despite the strong competition there, we have been able to win contracts thanks to the fact that we have invested into state-of-the-art drilling rigs in recent years. Our competitors have older equipment, and do not invest into new technologies because of the situation in the marketplace. We know that some of them are in the red and are waiting for the situation to turn around, as has happened several times in the past," said Kachyňa.

The countries where MND Drilling & Services operates include Germany, where the firm has a sister company. In Italy, the MND Group has acquired a majority stake in a local drilling company – LP Drilling. In addition, MND conducts business in Austria, France, Hungary, Poland, and Serbia. "Another European country where we want to establish ourselves is the Netherlands,": revealed Kachyňa.

The firm's clients include such global giants as Exxon Mobile and OMV as well as smaller production companies. MND Drilling & Services has 10 drilling rigs, which allow drilling wells with a diameter ranging from 12 centimeters to one meter and a depth between 900 meters and five to six kilometers. While a shallow well might take only two weeks to drill, boring a deep one can last as long as six months. "Our modern rigs make us attractive to a large number of clients because we can drill faster, which translates into lower costs," said Kachyňa.

Wells are drilled in locations identified by geologists based on geophysical measurements and subsequent analyses. "No matter what, the success rate of all wells drilled on the global scale is only 30%, as there isn't always a deposit on sites where drilling takes place. In Moravia, the success rate of our wells is approximately 50%," reported Kachyňa.

During the drilling process, the well is continually flushed to evacuate the drilled rock toward the surface and to maintain the well under a constant pressure. Once the drilling is completed, a steel tube is inserted inside the well for reinforcement purposes. "Subsequently, explosives are transported to the bottom to puncture the tube at the desired depth. Afterward, oil and gas, being under pressure, flow from the rock into the well and rise to the surface. The pressure gradually decreases as a well gets older. Secondary extraction methods are used to remove all crude oil from a deposit, such as pumps or the reverse injection of air or natural gas," explained Kachyňa. After a deposit is depleted, the well is filled with cement, and the surface area is recultivated.

Last year, MND Drilling & Services began drilling geothermal wells in addition to extraction wells. Water with a temperature of 100 degrees and more can be used for the generation of electricity. If the temperature is lower, water is used for heating.

Revenues recorded by MND Drilling & Services last year, including branches abroad, amounted to 1.6 billion crowns, which is slightly less than in previous years due to the situation on the market. "Despite that, we are able to maintain the utilization of our drilling rigs at 70-75%," reported Kachyňa. MND Drilling & Services currently has 420 employees. During the boom before crude oil prices fell due to the attenuation of production, the company employed as many as 550 workers.