TOGY talks to
Core services for the E&P sectorSeptember 28, 2017
John D. Lawrence, CEO of Petricore, talks to TOGY about working with IOCs that have recently entered the Mexican hydrocarbons industry and consolidating the company as a recognised global supplier of geological services. Founded in 2007, Petricore is an oilfield services company that provides petrophysical and geological services, including well-site and laboratory services in Mexico.
• On Pemex’s activities: “Pemex is setting up new bids for service contracts. It is going to replace a lot of old contracts for 2018. I assume that the number of service contracts with Pemex will be reduced. There’s no fast pickup in activity coming.”
• On competition: “At the domestic level, there are companies working towards providing the services that we do. Local competition is going to grow over the next few years. There is a lot of interest in doing business related to sample storage facilities.”
Most TOGY interviews are published exclusively on our business intelligence platform TOGYiN, but you can find the full interview with John D. Lawrence below.
What developments has Petricore experienced in Mexico over the past year?
New operators have recently won assignments and started field operations. We have been fortunate enough to be selected to provide services for several of them, including Petrofac, Diavaz, Perseus, Fieldwood Energy and others. That is giving us a new focus, which is very welcome after the strong decline in activities over the past three years resulting from the energy reform. More than the oil price, the energy reform was already responsible for reduced activity here. We are looking forward to steady growth over time in Mexico.
Is there likely to be more growth onshore or offshore?
It’s both. Fieldwood is operating offshore. We are also getting quite a lot of work from companies that want original studies on samples where we are not actually drilling yet. Some of the work is through Pemex and other work is through services companies. Quite a lot of operators are involved with those regional studies, such as BP and BHP Billiton for Trion. Several of the other major companies are looking at regional studies both in deep and shallow water.
Pemex has one farm-out with BHP Billiton, and they are preparing for several new farm-outs. These farm-outs are going to be operated by a lead partner that is not Pemex. That partner is going to lead the contracting of services.
Are Pemex’s budgetary constraints and internal restructuring affecting service contracts?
The company is still definitely cutting costs. Pemex is setting up new bids for service contracts. It is going to replace a lot of old contracts for 2018. I assume that the number of service contracts with Pemex will be reduced. There’s no fast pickup in activity coming.
What geological services can petricore provide new companies entering Mexico’s E&P sector?
Petricore has a lot of experience and knowledge in Mexico’s petroleum geology. We also have a lot of experience working with cores and analysing drill cuttings and other rock and fluid samples from Mexico. That knowledge is available to the companies that are coming in and need it.
There is a lot of opportunity for us to help companies new to the area get a better understanding of the petroleum geology that they are going to be involved with. We carry out regional studies based on old cores and samples that can provide information to companies evaluating opportunities.
What is the level of local geological expertise compared to markets such as the USA?
What exists is limited, mostly with Pemex and its suppliers. The Mexican Geological Survey, for example, has not traditionally been involved with the petroleum industry because that has been the domain of Pemex and the IMP [Mexican Petroleum Institute]. Logic would suggest that the geological survey should be involved with petroleum geology as much as mining geology, but to date that is not the case.
How is competition in this sector evolving?
At the domestic level, there are companies working towards providing the services that we do. Local competition is going to grow over the next few years. There is a lot of interest in doing business related to sample storage facilities.
Petricore provides services on the ground for clients that are here and we are dedicated to their needs. I hope we can maintain that position and become the preferred supplier based on our local knowledge, experience and relatively quick turnaround time, compared with international companies that struggle with that.
What are Petricore’s key objectives for 2017 and what is the company’s medium-term strategy?
Our biggest objective in 2017 is to consolidate our company as a provider of regional studies in Mexican petroleum geology, specifically with regards to biostratigraphy, geochemistry and geological analysis, to build up activity in that area and be recognised as a specialist in that field.
Our traditional geological and petrophysical well-site and laboratory services are starting to build up, but it is too slow. We can’t just sit and wait for that to happen. If we do, the competition will be taking the work from us.
For the mid-term, we are looking outside of Mexico to other areas and consolidating our company as a recognised global supplier of geological and petrophysical services. We have a presence in Colombia, Houston and Abu Dhabi. We will build up activity in Malaysia, Nigeria and Egypt, and other areas. We are spreading into North America in California and the Rocky Mountains, and further into South America in Brazil, Bolivia, Peru and Ecuador.
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- From the field