Arutunoff's study of power transmission showed that electrical transmission of power can be efficiently applied at nearly all conditions. His ambition was to apply the results of his study to oil drilling and improve the antiquated methods he saw in use in the early 1900's in Russia.

To do this, a small, yet high horsepower electric motor was needed. The limitation imposed by available casing sizes made it necessary that the motor be relatively small in diameter. The existing state of the art and design laws at the time indicated that a motor of small diameter would necessarily be quite low in horsepower. Such a motor would be inadequate for the job he had in mind so he studied the fundamental laws of electricity to find the basis for the answer to the question of how to build a higher horsepower motor exceedingly small in diameter.

How Arutunoff developed the ESP. In 1916, Arutunoff was redesigning a centrifugal pump to be coupled to the motor for dewatering mines and ships. To develop sufficient power it was necessary that the motor operate at high speeds. For direct attachment to such a motor, thus permitting the simplest power transmission to be used, the pump needed to be a rotating device and operate at the same speed with the motor. The centrifugal pump met that specification but it had never been developed to operate against high discharge heads. Arutunoff therefore successfully undertook to design a centrifugal pump, small in diameter and with a multiplicity of stages to achieve high discharge pressure. In his design, the motor was ingeniously installed below the pump to cool the motor with flow moving up the oil well casing, and the entire unit was suspended in the well on the discharge pipe. The motor was sealed from the well fluid and operated in an oil bath.

EPCO Pump - 1920's era the early days / production pump competition

Before the unit had completed testing, a fire broke out in the Briansk Steel Factory in the growing industrial city of Dnipropetrovsk, Ukraine (formerly, Ekaterinoslav) where Arutunoff was manufacturing in the original ESP workshop his pump and motor. The fire department could not catch the blaze which spread throughout the night, so one of Arutunoff's engineers hooked up the test unit in a surface horizontal position and it pumped a large volume of water and put the fire out. Indeed, it remains a surprise to many in the industry that the first functional use of an ESP was actually on surface in a horizontal configuration from the test bench used in designing the ESP. When Arutunoff awoke the next morning he was rather famous, for the pump was literally an overnight success. Arutunoff's early invention enjoyed wide application in Russia and later in Germany, for oil well pumping and dewatering mines and ships.

How the ESP industry in the early days was relocated to the State of Oklahoma. Skeptics thought the ESP was impossible and would never work, but Mr Clyde Alexander (namesake of Clyde Lake, Oklahoma), then vice president and general manager of Phillips Petroleum Company, heard about Arutunoff's invention and saw what this could do for the petroleum industry. Soon thereafter, a deal was negotiated with Phillips Petroleum Company for testing the equipment, and in 1928 Arutunoff moved to Bartlesville and formed, with the backing of Phillips Petroleum Company, the Bart Manufacturing Company.

With three employees, Arutunoff built and installed the first ESP in an oil well in the El Dorado field near Burns, Kansas. News of its success created quite a stir in the oil patch. The New York Times send Arutunoff a telegram saying, "Please rush good pictures showing oil well motors that are upside down". An article in a 1936 Tulsa World newspaper described it as " An electric motor with the proportions of a slim fencepost which stands on its head at the bottom of a well and kicks oil to the surface with its feet."

ESP install #1. Phillips Petroleum lease, near Burns, Kansas, 1928. Arutunoff is third from right, shown with the original Reda employees.

The early days of Reda. The name REDA itself was the cable address of the company that Arutonoff had operated in Germany, namely the Russian Electrical Dynamo of Arutunoff. The first two employees to work for Arutunoff were Mr Scott C Beasley and Mr. S.N. VanWert. In fact, it was Mr. VanWert who was the actual promoter instrumental in proposing and negotiating the agreement with Mr. Clyde Alexander of Phillips Petroleum to move to Bartlesville. It would soon become a spectacular business. By 1938, it was estimated that two percent of all oil produced in the United States with artifical lift, was lifted by Reda Pumps. Reda continually expanded its manufacturing, operations and service. Many thousands of employees would share in the success of the Reda pump.

Great business success meant great wealth and the Arutunoff family lived in grand style in Bartlesville, neighbors with many of the oil tycoons of that generation. During the hot summer months and bitter winter days in northeastern Oklahoma, he and the family would live in their large rambling home in Beverly Hills, California (he would later sell the home to actor Vincent Price). Arutunoff was known to have a penchant for Hawaii, and would frequently treat friends for an all inclusive island vacation, flying first class and staying with the family at his favorite hotel, the Royal Hawaiian on Waikiki.

Arutunoff's ESP oilfield technology quickly had a significant impact on the oil business. His pump was crucial to the successful production over the years of hundreds of thousands of oil wells. Arutunoff was an ingenious and prolific inventor, who, among other odd practices, ensured the punctuality of Reda employees by furnishing his office with only three chairs, to be divided up for the entire day on a first-come first-served basis. Arutunoff would lead by example to become the first of many rather eccentric ESP professionals, who would go on in developing and further refining the ESP from his legacy. Arutunoff would obtain 90 patents with broad patent protection beginning in the 1920's (example: US Patent 1,701,468 applied for on April 15, 1927, titled- "Motor Protector"), unlike the "corporate patent mill" ESP patents of today with narrowly defined claims.

Vintage Reda Pump advertisement, 1951 "Submergible Electrical Centrifugal"

In 1930 the company became REDA Pump, an acronym for Russian Electrical Dynamo of Arutunoff. It occupied the city's industrial park just northwest of downtown and the plant eventually grew to nine acres, or 30 times its original size, through 42 additions over the years. REDA merged with TRW (another acronym for Thompson, Ramo, and Woolridge) in 1969 and later TRW REDA acquired the Masonic Building that had been the headquarters of Cities Service. The entire REDA company including the REDA Oil Well Cable division, based in Lawrence, Kan., were sold by TRW in 1988 for about $300 million and became a division of Camco Inc. Ten years later, on June 19, 1998, Schlumberger announced that it purchased Camco in a stock swap- and its ESP division became known as Schumberger REDA Production Systems. In 2001 the city of Bartlesville, motivated by the need to retain the 500 jobs at REDA, announced an ambitious plan to rebuild the company's aging plant. The 16 different lease agreements for the land the plant occupied would be consolidated into one lease, and the plant would be rebuilt in phases resulting in a new city-owned and air-conditioned facility of over 300,000 square feet. But that plan was scrapped in early 2003 when Schlumberger announced it would not rebuild the facility, but instead only refurbish the existing structure. In 2004 Schlumberger sold the 170,000-square-foot nine-story Masonic Building to Rogers State University and ended any hopes to maintain Reda's presence at the iconic building. View a Letters Patent forty years after Mr Arutunoff's early patents, by clicking here (pdf).

Production consequences Low cost Cable & Motor Lead Extension

In the beginning there was Reda, and from the inventor and leader Reda, others followed:
• The birth of Centrilift. In the late 1950's, started allegedly by using stolen proprietary drawings taken from Reda pump. Arutunoff was disappointed and understandably furious at the poor showing of professional ethics by his once trusted ex-employees eager to start up their own ESP business in this way.

Byron Jackson California rescue Centrilift business startup

A lawsuit was prepared to be filed against Centrilift and the ex-Reda employees who founded Centrilift, resulting in a settlement with damages paid by Centrilift to Reda. During this time in 1957, Centrilift was located in California and was trying to put together a pump system and find an operator to install their product. Byron Jackson Pumps in 1959 purchased Centrilift and moved the Centrilift people to Tulsa. The company was subsequently sold to Hughes Tool in 1980, and a new facility built in the town of Claremore, Oklahoma paving over the historic Claremore airport landsite used by Wiley Post and Will Rogers, in order to secure a low cost employee base and allow room for expansion.

BakerLift merged with Centrilift following Dept of Justice Antitrust clearance following the merger of Baker Oil Tools & Hughes Tool

Following a merger of Baker Oil Tools and Hughes Tool in the late 1980's during the oilfield depression, a careful lawful orchestration of the businesses between Centrlift, BakerLift, and Kobe Pump of Argentina was handled due to Anti-Trust concerns. Subsequently, Baker Hughes replaced the leadership of Mr Joe Cox who opted against employee layoffs mandated by the Baker Hughes management in Houston, with Mr Joe Brady (ex BakerLift and fresh from a quick, and large downsizing of the Baker Hughes CAC division operations in Belle Chasse, Louisiana) to similarly streamline the Centrlift division. Thereafter, under Mr. Brady's management, Centrilift became one of the larger and more profitable ESP manufacturers. This time period laid the foundation to Centrilift's growth. Centrilift built a distribution network in Latin America - having acquired Kobe facilities in Argentina, and Europe and secured sizable orders in the ex-Soviet oilfields primarily through the exemplary efforts of Mr. John Arrott, Business Manager - Russia, during the early 1990's.

Baker acquired FMC's Oiline Submersible Pump Co.,circa 1978. Kobe took over and about 4 years later it was changed to Baker Lift. Mr Joe Brady left Kobe as Eng. VP and became President of Baker Lift, prior to a move to & quick downsizing of Baker CAC, only then to transfer back to the consolidated Centrilift + (Bakerlift and Kobe)

Centrilift under Mr. Brady's leadership was able to achieve consistent quarterly revenue and profit growth, and was rumoured to catch the envy of many other Baker Hughes division chiefs owing to Centrilift's top standing in business performance within the parent company. Throughout the 1990's, Centrlift was able to attract many experienced industry professionals, owing to this success. Subsequent to Mr Brady's retirement, changes in management philosophy and reversals occured. Baker Hughes appointed successive Presidents to Centrilift from their Hughes Christensen drilling bit division. Information received from an affected Centrilift executive relates that Baker Hughes abruptly dealt with the termination of employment of Centrilift CEO Mr. Charlie Wolley in late 2007, together with a divisional Vice President and law staff primarily over handling of certain agency business dealings in Russia. Baker Hughes corporate management remain cognizant to $44.1 million dollars of penalties related to recent felony convictions levied against Baker Hughes by the U.S. Department of Justice for bribery. Additional reference support regarding Baker Hughes ethics, and public statements by Baker Hughes CEO Mr Chad Deaton, can be found by clicking here. Analysts remark that more stringent business controls and competition in large geographical growth markets such as Russia are causing Centrilft to consider non-traditional markets for future growth and profit, by developing technology to be tested in high profile and intervention cost market segments such as subsea applications - a technology first introduced in relatively lower pump thrust and conservative motor hp sizes by industry market share leader Schlumberger Reda in Asia 10 years prior. (Reda has successfully operated over 30 subsea pump systems in more conservative applications) . Having received reliability assurances from Centrilift for these high thrust & high motor horsepower (1200-1500 hp) first-article pump systems, oil & gas operators are expecting long runlifes of 5 years. New sales of these deep well, high flowrate applications may be dependent on commitments to 10 year runs without pulls in these high intervention cost subsea applications. Other major ESP manufacturers are in wait and see mode, before plunging into this new and risky esp market segment. The verdict is still out, and understandably will be for at least the next few years as the industry hopes for success during these subsea trial early operations offshore Brazil and in the Gulf of Mexico.

Oil Dynamics logo Source: Link to PT ODI website, Mr. Tommy Short

• Oil Dynamics, formed in 1967 and lead by a new management team comprising Mssrs Joe and Eldon Drake and Joe Carle, eager to stake out their claim with their own ESP business. Joe Carle was also one of the founders and president of Centrilift (previously employed by Reda), and it is said that Mr Arutunoff was preparing yet another lawsuit against Centrilift and Joe Carle for a new patent infringement case in 1967 during the time that the business deal was being put together to form ODI. So rattled was Joe Carlyle, that he was eager to leave Centrilift and start up another ESP venture with the Drake brothers to avoid being involved with another lawsuit with Mr. Arutunoff for stealing proprietary technology from Reda. As a side note, Eldon Drake would later start up another ESP company by the name of Westech, which was subsequently sold to Centerlift. ODI was capitalized and originally jointly owned by Franklin Electric and Goulds Pumps of Seneca Falls, New York. Later Goulds (ITT) sold to Franklin in the last three years of ODI's existence and lead by Mr. William H. (Bill) Lawson, CEO of Franklin Electric. Mr. Tom Brennan was President after Mr Joe Drake retired. ODI was best known for their quirky, yet brilliant, research and development. In fact ODI was the innovative leader of many state of the art manufacturing processes and the holder of patents in the state of the art abrasion resistant (AR) tungsten carbide bearing elements. ODI successfully marketed their 1-X AR and modular AR pump systems for longer runs, pump thrust wear resistance, and for use in sandy abrasive critical service downhole conditions, together with their Super Sand Pump patented technology which became the leading ESP technology used for tough sandy applications in the oilwells throughout Southeast Asia.

ODI was known for their leading ESP technology US Patent 4,872,802 Application Date June 22, 1987, by Mr. Brown Lyle Wilson of ODI Centrifugal Pump Modular Bearing Support for Pumping Fluids Containing Abrasive Particles Besides his brilliant research in advanced bearing support for pumps, Mr. Wilson was also the preeminent expert in gas handling and the ESP. For copying ODI patented design, sources say that Centrilift was forced to settle with ODI for patent infringement. Centrilift paid handsomely to settle the lawsuit and for any future royalties. ODI was subsequently acquired by Centrilift a decade later in 1997.

So effective was this new technology that Centrilift attempted to design their own AR pump system; subsequently however was forced to settle with ODI for damages because of patent infringement. Unfortuneatley for ODI management and employees, the company was not known for their financial prowess, as ODI was always under the brow of Goulds Pumps and later Franklin Electric. It is said that both parent companies kept the lid on capital and cash flow, thereby limiting ODI Pump from properly executing expansion into emerging international markets - much to the benefit of competitors Reda and Centrilift. Eager to exit the ESP market, Franklin contacted Centrlift management and eventually sold to Centrilift in October of 1997, for $31.5 million in cash, a pittance of its real value given sales over $40 million, strong EBTIA and its advanced technology standing in the industry. The ODI operation was promptly downsized by Centrilift, and consolidation of remaining employees, plant, equipment and technology.


• SOS and ESPI, lead by entrepreneur extraordinaire Mr Ray Johnson during the difficult economic times of the 1980's. Contracted as a consultant to Centrilift during the early 1980's following purchase by Centrilift of Ray Johnson's and his partners' SOS variable speed drive innovations and technology, Mr Johnson discovered how to profit from the achilles heel of the ESP industry - service and integrity. Mr Johnson's forthrightness in bringing to industry attention many of the deficiencies of the ESP industry of that time resulted in oil and gas operators insisting on an industry standard, thereby creating the Recommended Practice (API RP-11) during the mid 1980's and still used today. Mr Johnson and his own new company ESP Inc. - ie. "ESPI" - was susequently able to build a strong and loyal customer base providing pumps that met specification and industry leading service, thereby quickly becoming the #3 market share leader in the industry behind Reda and Centrilift. Veterans cite this success as exemplary given the capital restrictions and competitive pressures in the esp oilfield environment. It's well known that Mr Johnson always recognized that clients expect great service, honesty and pumps that meet specification, delivered promptly, properly installed and run correctly. Oil and gas operators rewarded him with their business. Later to be sold to the U.K. Wood Group and managed by ex-Centrilift Mr Joe Brady and his tutelage management team of many ex Centrilift employees eager to part ways from Baker Hughes and Claremore.

Advanced Weatherford ESP designs Source: Link to Weatherford website.

• Weatherford, a leader in gas lift and rod pump artificial lift market segments, looking to include ESP capabilities thereby completing the whole package of becoming the undisputed leading artificial lift solutions supplier and service company. Weatherford has recently invested in Borets and operates Borets sales, service and manufacturing in the United States, with an eye on global expansion, leveraging Weatherford's artificial lift service and sales distribution base worldwide. Industry experts see Weatherford's target to claim #1 market share leader in the ESP market segment.


• ... with future chapters to be written about many of the new and aspiring ESP commercial ventures (for a complete list of ESP manufacturers, click here) like Green Country Pump, Canadian Advanced, the experienced veteran Russian manufacturers Borets, Novomet and Alnus, and the Chinese ESP factories in Tianjin - newly minted suppliers to the Western ESP companies of most all their pump stages, parts for motors and cable and related tools. China ESP manufactuers already have a new vision to become leading direct Chinese enterprise global distribution and suppliers to oil & gas operators worldwide. Chinese ESP supply has already successfully supplied the Indonesian oilfieds in Sumatra, Java, and Kalimantan -Borneo, onshore and offshore, together with Canada, and other markets. Analysts cite the propensity of future acquisition and investment by China enterprises in Western service companies for direct distribution, making the business case to leverage their low cost manufacturing base. As Western companies without artificial lift enterprises like Centrlift and Wood Group ESPI realize this, look for exclusive partnership and investments. But who will buy who, East or West?