Semyon Garagul, founder and shareholder of the Kirillitsa Group of companies (General sponsor and co-organizer of the RAREMET–2026 Congress), spoke about the development of a multidisciplinary busine

The Russian oil sector is increasingly facing the problem of hard-to-recover reserves, which already account for more than half of all resources. In these conditions, the key factor is the development of new oil recovery enhancement technologies and the creation of our own equipment for their implementation. Semyon Garagul, founder and shareholder of Cyrillic Group of Companies, told Rossiyskaya Gazeta in an interview about how the technology of thermochemical exposure (TTE) is developing, what results have already been achieved and what role international cooperation plays in this.

In March, your delegation traveled to China for the international industry exhibition CIPPE and negotiated with manufacturers of equipment for the application of thermochemical technology. What is the practical outcome of this trip?

Semyon Garagul: A year ago, we already discussed the technology of thermochemical exposure, and now I am glad to tell you about the results. Yes, indeed, we were in Beijing and did not return empty-handed. An agreement on strategic cooperation was signed between Oil Resource, a member of Cyrillic Group of Companies, and The Eighth Construction Company of CNPC, one of the structures of the largest Chinese oil and gas corporation.

The document defines the directions of joint work on the development and supply of high-tech equipment for enhanced oil recovery and lays the foundation for a long-term partnership in the markets of Russia and China. We will adapt our production facilities to technology scaling - this will require several thousand units of specialized equipment.

You are negotiating with Chinese partners on equipment, but at the same time you said that it is important for you not just to buy a ready-made solution, but to develop production in Russia. Isn't there a contradiction here?

Semyon Garagul: There is no contradiction here. Partnership with Chinese manufacturers is not an alternative to the development of production in Russia, but a tool to accelerate it. It would be wrong to ignore strong technological competencies and international experience if they help to move faster.

Our strategic goal is not to remain a buyer of external solutions, but to build our own production base, engineering competencies and a sustainable development system in Russia through cooperation and adaptation of best practices. We are open to cooperation with international partners, but with a focus on ensuring that added value and technological development are generated within the country.

We are actually entering a market that is almost non-existent yet, but which will inevitably appear. More than half of Russia's oil reserves are hard to recover, and their share continues to grow. This is not a geological problem, but a technological one. Therefore, the development of new production technologies is becoming one of the key factors for the sustainability of the entire oil industry.

By 2040, the market for equipment for such technologies may reach 2 trillion rubles. The question is, whose production will it be? What steps have you already taken internally to make the project Russian?

Semyon Garagul: We are consistently shaping the Russian outline of the project. This is not only an external partnership, but also work within the country - with science, engineering and future production.

A scientific and technological center has been established in the structure of the Cyrillic Alphabet Group of companies, which is engaged in this area. We are building cooperation with Russian scientific and research organizations so that the project has a solid technological foundation here in Russia.

Our partners include Skoltech, Kazan Federal University, and LABADVANCE, which is a particular example of a successful domestic startup associated with Skoltech. A pool of industrial partners is being formed. We are creating a working mechanism for the interaction of science, engineering and the real sector.

How has the TTE project progressed over the past year and at what stage is it now?

Semyon Garagul: The project has progressed significantly. A year ago it was an idea with potential, now we have specific solutions and deadlines.

First, we have accelerated the roadmap: we are postponing pilot tests from 2028 to the fourth quarter of 2026. We will test the technology's performance in different geological conditions.

Secondly, the implementation contour has been formed: mining, science, design, suppliers, production partners. We cooperate with Skoltech, KFU, the Russian Science Foundation, and the Fuel and Energy Complex Competence Center under the Ministry of Energy.

Third, TTE has begun to "grow iron": work is underway on a mobile fleet, the selection of wells, the design of infrastructure, the selection of suppliers, and the creation of equipment. And this is a very important shift: technology matures precisely when an industrial configuration appears next to the formula and calculations.

We also joined the co-financing of fundamental research of the Russian Science Foundation together with the largest oil and gas companies. And, perhaps most importantly, research has shown that the technology works in any rock and is suitable for the extraction of both light and heavy oil, including in flooded fields. This dramatically expands the scope of its application.

Can TTE be considered as a key technological asset of the company? What role do you define for intellectual property in your business?

Semyon Garagul: Intellectual property is a major asset. It all starts with science. It is more expensive than terminals and working capital. The cost of the exclusive rights to the technology is about 4 trillion rubles. The assessment is based on comparable international analogues and the potential for scaling the technology to the Russian market of hard-to-recover reserves.

I'll explain where this scale comes from.

Today, the widely used technology for maintaining reservoir pressure allows only 30-40 percent of oil to be extracted from the field, the rest remains in the subsurface. Our TTE technology can increase this rate by up to 60 percent, thereby reducing the residual content by up to 40%.

In fact, in Western Siberia alone, there is as much oil in the reservoirs as has already been produced since the 1960s. We just couldn't reach them before. We developed the technology non-publicly before obtaining patents. Now that the rights are protected, we are open to dialogue with investors.

TTE is a story about oil. But you are also developing the field of rare earth metals. This is a different industry. What brought you there and what role does this project play in the logic of the group?

Semyon Garagul: Russia is one of the top 5 countries in terms of reserves of rare earth metals, but it produces little of them. We entered this topic not through geological exploration, but through the processing of man-made waste - tailings left over from the Soviet era. It's faster, cheaper, and more environmentally friendly. Our task is to extract rare earth metals from these wastes.

We consider this area as part of a strategy to create an integrated business - from resources to their deep processing and the creation of products with high added value. We plan to create a mining and chemical cluster with a capacity of up to 50,000 tons per year. This year, we became the general sponsor and co-organizer of the May International Congress on Rare Metals, Materials and Technologies RAREMET-2026, which is organized by Giredmet JSC, an institute from the scientific division of Rosatom. This is a key platform for selecting technological solutions and partnerships, and it is important for us to be there.

Tell us about the agricultural sector of the group, what projects is it developing now and what are its plans for the future?

Semyon Garagul: Russia is one of the largest grain exporters, and it is a strategic resource. Unlike oil, it is renewable. Today, we work with more than 200 farms across the country, purchase basic crops, and control supplies at all stages - from the field to the port. Exports go to the final recipient in the countries that are our strategic partners. These are Iran, China, and Turkey.

The strategic goal is to create a high-tech agro-industrial complex with its own crop production on 1 million hectares. The same transformation that we are undergoing in oil, only in the agricultural sector.

How do all these areas - oil, technology, rare earth metals, and agriculture - fit into the group's strategy?

Semyon Garagul: These are different directions, but they have a common logic. We are building a diversified industrial group operating at the intersection of resources, technology and infrastructure.

On the part of the oil business, we are gradually forming a vertically integrated business model - in fact, we are moving towards the format of a high-tech vertically integrated oil company (VINK). This means the development of a full cycle: from logistics and trading to our own technological solutions in production and oilfield services.

Other areas, such as the agricultural sector and projects in the field of rare earth metals, are developing as independent resource clusters. They share a common philosophy: working with basic and strategically important resources for the country, creating technological added value and focusing on long-term markets.

The other day, you revealed the results of Oil Resource for 2025 according to RAS - revenue doubled, profit quadrupled, and the rating was upgraded to BBB-. Where are the funds going?

Semyon Garagul: These results are not an accident for us. In the near future, the IFRS financial statements for 2025 will be released - we also expect good dynamics. You asked about the strategy, it's designed for 35 years. This is not a rigid plan, but a philosophy of development.

We don't know what the market will be like in 2060, but we do know which way the country and the energy sector are moving. Profit growth faster than revenue means that each operation becomes more efficient. A credit rating and debt market exits are the result of investor confidence.

Where does the money earned and attracted go? Into terminals, into technology, into mining, into new assets. We invest in innovation. Our expertise in hydrocarbon processing leads us into hydrogen technologies and low-tonnage chemistry. Competencies in the oilfield service sector relate to own production of equipment. Each step grows out of the previous one.

If we talk about the strategy until 2060, then the key point of growth for us today is capitalization. We are moving from a model where revenue growth was the main guideline to a model where the value of a business as a combination of operating results, technological assets and intellectual property is growing. An investor doesn't just buy the numbers in the financial statements - he buys an idea of what this business will become in a few years. That's what a long strategy is in practice: it gives the investor a clear answer to this question. We're just at the point where we have that answer.

Source: RG