Potential in Mexico’s deepwaterSeptember 16, 2022
John D. Lawrence, CEO of Petricore, talks to The Energy Year about why private-sector participation is key in Mexico, the central role of deepwater plays and the company’s experience working with Pemex. Petricore is an oilfield services provider offering petrophysical and geological services, including wellsite and laboratory services.
How important is private-sector participation to further Pemex’s upstream ambitions?
Pemex clearly has an ambitious budget for 2022 which will provide for increased exploration activity, as well as increasing the reserves-to-production ratio. This is a very good sign and is precisely what the industry in this country needs. At the same time, it seems that Pemex’s finances are more stable now than they used to be, which suggests that the budget for 2022 might be achievable.
However, Pemex does not have the capability to achieve the country’s production objectives on its own. This brings us back to the energy reform, which was designed precisely to furnish the upstream sector with international operators and local independents to lighten the weight on Pemex’s shoulders both operationally and financially.
The government is correct to focus on strengthening Pemex, but this should be done in parallel with and not against the participation of private operators. One sole company will never be able to develop Mexico’s vast resources alone. Pemex ought to work together with private operators and IOCs towards the common goal of increasing production.
How pivotal will deepwater plays be for Mexico’s E&P in the near future?
There is no doubt that the biggest area of potential in Mexico is the deepwater. It’s said that around 90% of Mexico’s part of the Gulf of Mexico Basin is virtually untapped. However, this is a huge area which takes a lot of investment to explore and develop. That’s the key.
We have the Trion project, which has entered into the FEED phase, as a pioneering development carried out by BHP with a 60% interest alongside Pemex E&P with a 40% stake. However, Pemex finds itself relatively limited when it comes to deepwater capabilities. This is the big attraction for internationals that have the financial and technological muscle to develop these types of prospects. The government needs to pave the way for international operators to come and invest – to make the current E&P environment more attractive.
What level of activity have you experienced in the last 12-18 months?
Petricore has been operating continuously with Pemex, particularly in the Quesqui and Ixachi fields. We have also carried out plenty of work, particularly in terms of exploration wells, but also in other production assets developed by Pemex. In addition, over the last couple of years we’ve managed to increase our private clientele from 8-10 international and local operators to a portfolio of 40-45. We’ve been busy working for many of these private operators, such as Repsol, Lukoil, Fieldwood, Eni, Jaguar E&P and Petrolera Cárdenas Mora.
As a consequence, we have had to increase our capacity in terms of equipment to meet the growing demand for services from our new clients. We have also brought in a few people from abroad who have the technical competence to expand our overall level of technical capabilities. Some of our projects are relatively complex, especially special core analysis work for enhanced recovery projects for production assets.
To what extent are the services you offer in Mexico becoming more sophisticated and complex?
The operations we carry out in Mexico tend to require more basic services – geological work in particular and basic petrophysics. We do some special core analysis work, as mentioned, but these services are more limited and we tend to send samples to our base in Houston for the more complex high-tech special core analysis.
Moving into 2022, our focus will be to provide more sophisticated technology services for our clients but also to increase the know-how of our staff through training. Thanks to this, we will gradually enhance our ability to offer more complex studies and services.
What major differences do you find when working with Pemex compared to other operators?
Whether you work for an NOC such as Pemex or for an international operator, each company has its own way of doing things. Historically our services have been catered to Pemex so our staff is very familiar with their work methodology and expectations. When we start work for a new client, and especially international operators, it can be challenging to live up to their expectations at first. It’s a question of adapting to their needs, standards and goals to meet their demands.
How is Petricore promoting national content within the Mexican oil and gas sector?
National content is elemental to us as a company in Mexico. Our operations entirely focus on providing the services in Mexico for the client in Mexico. Not only do we promote national content through the contracting and training of our local staff, we help international operators increase their national content ratios. This also taps into one of our added values, which is to offer services locally, in contrast to many of our competitors, who tend to take the work away to do it at their home base. At the end of the day, our mandate and focus is to provide the services locally, with the most efficient response.