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Jorge de Dios Morales, director-general of the Diarqco Group, talks to The Energy Year about expectations for 2022 in the upstream arena and in public-private collaboration, the latest updates in the Mayacaste field projects and the company’s plans to consolidate its comprehensive offer. The Diarqco Group is a comprehensive Mexican energy company.

What expectations does 2022 bring for the upstream sector and public-private collaboration?
These past few years have been difficult for everyone in the industry. However, 2022 is full of opportunities. For those like us, who have been able to resist and persevere, the future seems bright. It’s time to come back stronger than ever. 2021 was a very slow year and there was no real recovery, but we all have high hopes for 2022. As private companies, we must join forces and aspire to achieve the objectives set by the government.
The administration has also been a constant source of support as we both aspire to meet the same E&P goals. As we are now focusing our efforts in our own fields, we believe that it is possible to increase this synergy. Since we depend on Pemex’s infrastructure, we need to sell and transport our crude oil through this company. Both its infrastructure and its business model are very solid, and we can all achieve our goals if we – both private operators and Pemex – collaborate closely as a single industry.
Despite the pandemic, the private sector never stopped investing. Hydrocarbons were considered an essential service in Mexico during this period, so we continued with drilling and fieldwork. Everything aligned in a timely manner so that we could move forward in 2022, from SENER [Secretariat of Energy] to the CNH [National Hydrocarbons Commission], including our teams, contracts and the maturity of our field.
In addition, of the 111 contracts [awarded after the 2013 energy reform], at least 20-25% have reached the development phase. This translates into greater investments, higher job creation rates and, consequently, greater benefit sharing for the government, due to the proposed structure of the different contracts in oilfield operations.

What updates can you give us on the evolution of the Mayacaste field?
We are present in the Mayacaste field (Contractual Area 13), and the original contract we have for this field stipulates a period of 25 years. During the last two years, we’ve focused on exploration. We’ve conducted geoscience studies with the information that was originally provided and, from that, we have carried out detailed engineering and special processes.
We successfully met all the criteria laid out in the first stage of the contract, called the Evaluation Plan, which included: geoscience studies and models, design engineering for well construction with VCD methodology, well drilling and repairs, surface hydrocarbons management and their commercialisation with Pemex.
Currently, we are focused on the Mayacaste field because it has a better chance of reaching its Mesozoic target, given that it has 40 million barrels in reserves. We have divided the field into four areas, and right now we are working on area 1, which will provide us with 20 million barrels.

What development plan have you drawn up for Mayacaste and which funders are involved?
We plan to incorporate 2,000 bpd by the end of 2022. In the first two years of our development plan, we plan to continue drilling wells to develop the first reservoir we have discovered. In the following two years we will reach a production of 6,000 bpd, which also implies investments in the infrastructure area for its management.
We coincide with some previous projects that Pemex had drafted to develop the contractual area, but for which it did not get the appropriate budget at the time. After the energy reform, they moved to the management of the National Hydrocarbons Commission, and later to our company.
In the case of Contractual Area 13 – called Mayacaste – we are in a privileged area. After numerous and detailed studies at a geoscience level, we have identified multiple reservoirs.
We are currently developing the engineering that will allow us to recover the identified hydrocarbon and bring it to the surface for its commercialisation. We have written a clear evaluation to attract the interest of investors, and we are focusing on the investment plan. Although we have already identified a fairly interesting volume of reservoirs, the current challenge lies in investment. Fortunately, the oil and gas prices have behaved very well since last year. The situation during the first years of the contracts was different, and that had complicated or even raised doubts about investments in oil and gas for some sectors.
In terms of funding, we received the support of Bancomext in the first quarter of 2021, which granted us a credit line of USD 7.1 million. Our institution is focused on contributing to the development and generation of employment in Mexico to increase the productivity and competitiveness of Mexican companies. That has allowed us to have excellent credit conditions, which is why it still remains our first option to consider for future drilling – we have verified the trust they have given us and the continuous successful results. It is already calculated that a development well can cost between USD 30 million and 35 million and this support is crucial.
The high quality of our 36-degrees-API hydrocarbon currently plays a crucial role in helping Pemex to lighten its heavy crude and facilitate its refining.

How will the production from your fields complement the operation of the Olmeca refinery?
We have a special synergy with Pemex, since it needs light crude to feed its new Olmeca refinery, located 18 kilometres from our production assets. Our Mayacaste field is also 5 kilometres from Pemex infrastructure and 22 kilometres from the port of Dos Bocas. Pemex needs our light crude, so we must work hard to provide it at the necessary levels. We have a sales agreement with them until September 2022, and it is renewed annually.
In the same way, there is a constant dialogue with other private marketers. However, due to current volumes, regulations and proximity, Pemex Exploration and Production is our first option regarding sales. The current administration guidelines stipulate that all production must remain in Mexico, which benefits us, Pemex and the country.

How does the Diarqco Group want to re-consolidate its position as a comprehensive services provider?
We have been on hiatus as a service provider for five years, as we have focused on the development of our field. However, in recent months we have been interested in returning to the services market, since the oil companies are completely consolidated. They have accredited evaluation plans and are currently in the development phase of the identified reservoirs, with a total focus on their exploitation.
It is worth remembering that Group Diarqco was a leader in the service providing sector – primarily for Pemex, but also for private companies and governments. We have provided basic and detailed engineering, while innovating with laser technologies and electronic models. We are highly experienced in project supervision, including offshore platform design, construction and operation, as well as land facilities, including refineries. We also have extensive experience actively participating in the improvement of hydrocarbon extraction and surface management services, both directly for Pemex and for private operators from the energy reform.
That being said, the Diarqco Group has participated in the consolidation of its companies as oil operators since its creation. That allows us to participate in the entire hydrocarbon value chain, since we have experience in the majority of the economic activities that occur in exploration, production, transport, processing, storage and commercialisation.
Our short-term goal for this year is to be back in the market, opening strategic service lines. Our intention is to work with at least 10 other private operators and Pemex. The government is proposing new interesting tenders, so we are trying to play on both fronts. We currently have offices in the state of Tabasco, both in Villahermosa and in the municipality of Paraiso. Also, according to our plan, we hope to have a broader project-based positioning as we once did in the north, centre and south of the country. At the same time we are looking to develop some partnership projects in Latin America.
Our value lies in our experience in the execution of 44 services contracts with Pemex, a variety of contracts with private companies, and more recently, the consolidation of the structuring of two oil companies. Also, our strategic presence in Tabasco allows us to support international oil companies. For them, it is very expensive to move their infrastructure and workers to Mexico, so they prefer to rely on local businesses, and we can provide what they need. What matters most, in addition to having a specialised and qualified team, is efficiency. That is what we currently offer, and we have received a positive response from new international customers.

What competitive advantage does the Diarqco Group offer to clients working in the Tabasco region?
We are the first Tabasco company in the oil industry capable of covering upstream, midstream and downstream. We started providing services, and now we have culminated as a company with the experience of consolidating the oil companies in which we participate. After 30 years in this sector, we are proud to represent our region in this way.
As locals, we have strong ties with the unions and the communities of the region, we have learned to work with them in harmony.
With all the experience gathered during these 30 years, the Diarqco Group is returning not only as a service company, but with the knowledge of what it is to be an oil operator. This allows us to generate enormous added value for our customers, transmitting years of experience in each service. We can provide all this to our customers to make their operations in the region more efficient. On this basis, we offer a series of unique attributes to clients operating in Mexico and even the possibility of transferring these experiences to other countries.

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