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September 2005, OJSC “GAZPROMNEFT”

Type of product (service)	Sales volume, rubles
	2005	2006	2007	2008 (forecast)
Information is not available

Provision of the following services to oil and gas producing companies: well stimulation services including hydrofrac, bottomhole cleaning, coiled tubing and nitrogen services: sand and foam removal from the bottom hole, nitrogen treatment, lost circulation treatment, removal of paraffin plugs and hydrate blocks, acid treatment.
All hydrofrac operations are performed using liquid gelling system “on-the-fly” in the process of injection, without prior gelling in tanks, with real time hydrofrac monitoring and control, using new generation chemicals.
The company uses software “Meyer” that provides 3D modeling of hydrofrac processes / Design, analysis of minifracs, real time data acquisition during treatments and data correlation, modeling of single-phase treatment to predict oil production.
Also, the company has laboratories with state of the art equipment for rheology testing and proppant quality testing.
All bottomhole cleaning and coiled tubing nitrogen services are provided using software “Cerberus”. This software enables flow modeling and analysis of coiled tubing stress, using of single-phase and two-phase fluid, assessment of circulation rate in the coiled tube and annular space, assessment of flow rate and fluid pressure, coiled tube stress modeling and wear measuring.

All process equipment and tools, materials and chemicals were certified in the Russian Federation and have permits for use.
To obtain permits to use the equipment (tools, materials), the company received certificates of compliance issued for the whole time of operation. The certificates were issued by NP “VNIIsertifikatsia”, LLC “TEKHNONEFTEGAZ”, Certification company “TEST GROUP”.
The Federal Service for Environmental, Technological and Atomic Supervision issued permits to use the process equipment, tools, materials and chemicals:
RRS 00-20349, validity period till 17.04.2009.
RRS 00-23657, valid till 06.03.2010.
RRS 00-24548, valid till 11.05.2010.
RRS 00-25393, valid till 11.07.2010.
RRS 00-27011, valid till 16.11.2010.
RRS 00-25913, valid till 22.08.2010.
RRS 00-18097, valid for the whole time of operation
RRS 00-20413, valid for the whole time of operation
RRS 00-21237, valid for the whole time of operation

The largest recent contracts are contracts for services provision to OJSC “Gazpromneft” and OJSC “NK “Rosneft”.

Information is not available

To collect customer feedback, executives and technical specialists of subdivisions of CJSC “KVS International” take part in meetings held by customers to discuss delivery progress. The participants consider and take measures to solve issues that arise in the process of service provision.
At the customers’ request CJSC “KVS International” provides consulting services, detailed analysis of performance in a certain period of time, and issues recommendations for managerial decisions aimed to improve efficiency and quality of services. The analysis is considered confidential and is provided to the customer in a presentation format.

The main competitors of CJSC “KVS International” In the sphere of oilfield services are the following companies: Schlumberger Logeico Inc., BJ Services, Halliburton Oilfield Services Ltd., Newco Well Service Ltd.

The main suppliers and manufacturers of process equipment and materials for CJSC “KVS International” (Calfrac Well Services Ltd.) are Enerflow Industries Inc.; Crown Energy; Hydra Rig NOV; CS & P Cryogenics; Cryogenic Vessel Alternatives; LEOBERSDORFER MASCHINENFABRIK AG; CANQUIP OILFIELD CORP.; Advance Engineered Products; QMC; Sellic Equipment Ltd; CATERPILLAR»; Kenworth; Red-L; B & T Oilfield Products; Cummins; Detroit; DYNACRAFT; GN Corporations; HACH; LLC “Nefteburtekhnika”; CJSC “Trading House “Neftemash”; LLC “KARBO Ceramics (Eurasia)”; OSJC “BKO”; LLC “Nalko”, CJSC AK “Khimpek”.

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