Consulting for Mexico’s production value chain CBMX CMB Luis VIELMA LOBO

Well designs are critical, and a lot of money is spent wrongly because there is no real knowledge of the subsoil.


Consulting for Mexico’s production value chain

February 25, 2022

Luis Vielma Lobo, CEO of CBMX Servicios de Ingeniería Petrolera, talks to The Energy Year about the company’s recent rebranding and changes in Mexico’s oil and gas supply chain and customer requirements. CBMX is a Mexican consulting firm focused on developing strategic, tactical and operational processes and methodologies for the hydrocarbons value chain.

What is the rationale behind the recent rebranding of CBMX Servicios de Ingeniería Petrolera?
We started CBMX Servicios de Ingeniería Petrolera to cover the whole production value chain from end to end, from the conception of a project to the delivery of the product. Traditionally, we have been involved in the upstream sector, where we offer consulting and engineering services in the E&P space – technical assistance, expertise in the exploration of the subsoil and reservoirs, and the drilling of wells. We even have our own registered methodologies and techniques which have been adopted as a standard by companies such as Pemex to optimise mechanical performance and volumes of crude.
In the last year, we’ve also delved into the downstream. We saw an opportunity once we knew about the experience of a certain company, specifically in the reconfiguration of the Cartagena refinery in Colombia, so we decided to develop an alliance with them. ICG is a company that has knowledge and experience in the refining processes, such as, commissioning, start-up, technical assistance and operations, as well as training for operational and technical people.
From there we thought of applying this to Mexico, it being a good opportunity given the state of many of the downstream facilities in this country, which are ageing.
The downstream business, like the upstream one, needs maintenance and this is seen in the need for services such as STO [shutdown, turnaround and outage] and revamping. Now we want to grow our presence in the downstream sector, working in refining, petrochemical or gas facilities. We are also keen on being involved in the distribution part as well.
At the same time, we are very much in tune with the concept of the energy transition, and we are preparing ourselves to enter the area of alternative energies, which, sooner or later, will resonate in Mexico as well. Although there is an urge in this country to exploit its rich fossil resources, the transition towards cleaner energy will come. Only the pace of this transition remains up in the air. Regardless, at the end of the day, the fundamentals of engineering can be applied to the development of cleaner energies, be that natural gas or renewables, and we want to be at the forefront.

What changes have you seen in the oil and gas supply chain and in customer requirements?
Until today, the supply chain in the oil industry in Mexico has been configured as a monopoly of large companies that cover multiple services. However, the demand now requires highly specialised companies in spaces such as engineering and technical areas, as well as in maintenance and operations.
This means that supply chains are changing in essence, based on the needs companies have today. These needs include lowering costs, maximising performance and achieving better margins. They were a result of the market environment when the price of oil had fallen to USD 22-25 a barrel, but have remained strong even at current levels of USD 70-80.
Another major change has come at the consumer level, as customers today find themselves with many more options than they used to have. The supply offer in terms of energy has evolved and adapted to the new reality, being much more diverse. This reality has been intensified in the last couple of years as alternative sources of energy and the energy transition have become the new jargon.
The recent oil slump has played a crucial role in enhancing this as a priority. Companies have revised their practices and are now looking into more climate-friendly processes. Decarbonisation and generation of alternative forms of energies, be it natural gas or hydrogen, are on the rise and this trend is only going to advance.


What kind of edge can your comprehensive methodologies offer to companies?
Our essence since inception was to be a technical oil company. We have supported Pemex over recent years as they have suffered a major gap in technical people. The NOC has lost around 30-40% of their experienced personnel due to retirement plans but also because of the opening up of the market after the energy reform in 2013. There was a leak of personnel into private firms that offered more competitive conditions. This reality was a window of opportunity for us as we came in to support them in certain technical areas.
Drilling-wise, we created a novel methodology called VCD [Visualisation, Conceptualisation and Definition] that Pemex adopted and has been using ever since. This formula is used to standardise the processes of well design. Its application has given way to an increase of mechanical and volumetric success, so its use has been widely applied to spudding and drilling activities nationwide.
We now have 14 different methodologies of our own aimed at optimising E&P operations in this country. Apart from Pemex, we are now working with medium-sized E&P companies such as OPEX, Perseus, Oleum and Vista Oil & Gas, among others, which need support to carry out their
operations in an effective way.
In maturing fields, companies are looking at comprehensive productivity systems. These systems analyse the subsoil, the reservoir, the wells and the surface installations. While before, these different upstream elements were looked at separately, now these integrated productivity systems approach E&P holistically. Challenges appear when one does not have this approach.
There are many different factors that one has to take into consideration when producing. For example, high-pressure, high-temperature reservoirs require a specific, tailor-made type of well design.
Secondly, questions may arise as to how to produce from such a well if we are talking about 15,000 pounds in the depth of the borehole. The company must have a specific strategy to produce from that well for a certain number of years. If not, one may accelerate the production of the well but can damage it, and consequently water and gas imbalances occur. These are challenges one can avoid by taking an integrated approach to drilling.

What niches does CBMX aim to tap into within the upstream?
Looking ahead, we see CBMX competing with new integrated and tailor-made methodologies. We aim to offer tailor-made solutions that address the exact needs of our clients. At the same time, our 14 methodologies are our intellectual property. Our VCD methodology was lent to Pemex E&P for a 10-year period before they developed its internal operational guides for well design. This is one example of how we can help a company grow in technical and economic terms.
Moreover, we want to take on opportunities in existing reservoirs that need to be expanded, in terms of extension and volume of production. We also want to help companies create new ways to connect the well to the surface by drilling more wells.
Well designs are critical, and a lot of money is spent wrongly because there is no real knowledge of the subsoil. For instance, many companies will create robust wells with a lot of steel when these can actually be slender wells with very little steel used in their construction. Steel alone represents 30% of the cost of a well. We see an opportunity in this regard, helping companies navigate to take the most cost-effective and efficient decisions when it comes to drilling.

How important is technology in the drive towards higher production in Mexico?
We are a company that believes technologies must be developed based on the real needs of the client. There is no doubt that innovation and R&D are changing the art of the industry and will continue to do so for years to come.
We ourselves have made a strong bet on this area but there are plenty of other companies that are doing the same, such as IMP [Mexican Petroleum Institute]. Yet Pemex has to see IMP as its technological arm rather than treat it as a service company. This would make processes more integrated, reaching solutions much faster. If Pemex had a much more integrated approach to R&D and technology, the whole Mexican oil and gas industry would benefit.
On the other hand, IOCs bring in their technology, which makes a huge difference when it comes to production. The private sector hit 70,000 bopd in Mexico in 2021 and there is no doubt that with their technological push, they will manage to reach 250,000 bopd if not more in three years’ time.
We have seen very promising discoveries in the last couple of years, and this is the complex and time-consuming phase, taking from four to seven years. Once discoveries are made and reservoirs are delimited, companies just have to draw up their development plans and start drilling. And this process is much quicker. It is here that CBMX comes in, helping these companies via methodologies and technology.

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