The Business of Market InformationMon, 09/01/2014 - 12:43
Service providers have seen a business opportunity in gathering and interpreting data to help oil and gas clients in the decision-making process. Such is the case of IHS, a firm that provides strategic analysis to help clients evaluate business opportunities throughout the entire energy value chain, ranging from upstream to power generation. Alejandra León, Director of Latin America Upstream of IHS CERA, says her company is well- positioned after having spent years meticulously gathering information across every aspect of the value chain. Additionally, IHS has data managing tools used in the oil and gas industry to analyze production, productivity, costs, and geological conditions. The firm possesses a holistic database with global information, allowing it to benchmark Mexico alongside other countries in terms of developments and improvements. “When IHS delivers insights, it goes one step further than its competition by not just providing data, but also contextualizing the information in the economic, market, and political environment of an investment opportunity. We provide more than predictions and models. IHS measures sensible areas, taking into account all the possible risks that could affect a given scenario within the oil and gas industry,” says León. By utilizing different tools, IHS enlists several scenarios to tests different investment strategies, ensuring a plan’s success. It is important for clients to know even the most discouraging scenarios, IHS believes, so the firm evaluates how a company can best take advantage of an opportunity, or whether it should at all, before guiding it through the decision-making process. León expects increased activity in consulting due to the number of clients requesting these services in order to better understand the changes in the market. It is quite common for IHS to use publicly available information to create strategic reports. Public data, although technically available to anyone, is not as easy to come across as one might think. “The geology of a specific region and the technology that can be used there to enhance productivity is considered public information,” León explains, “but not everyone can produce an insightful strategic analysis from this type of information, which is precisely what IHS does.” Nonetheless, there are instances in which the firm has to provide a tailored analysis on a classified subject.
Although the firm has worked with NOCs all around the world, León says Mexico is a particular case as all the information on the national oil and gas industry comes from PEMEX. IHS might only be dealing with the state- owned oil company for the moment, but there will be a time in which the firm will collect data from all the companies that will soon operate in the country, possibly including the CNIH. “Our company is used to gathering information from a variety of sources and we have a good relationship with operators all over the world. We expect that to be the case in Mexico,” says León. Despite this future diversity, León is confident that a good synergy will be maintained between IHS and PEMEX. León also wishes to collaborate with CNH and SENER in establishing sustainability standards through benchmarking. IHS’s awareness of how critical health, safety, environment, and sustainability are to any project, leads it to also offer services related these issues. The firm has not worked with PEMEX in evaluating such standards yet, but it has international experience with other companies. For example, when Ecuador tendered projects in its southeast region, IHS collaborated as a sustainability advisor. “This expertise is needed in Mexico as the country is lagging behind other nations in terms of sustainability targets. Hopefully, recent structural changes will lead Mexico toward higher standards. Once the market is open, foreign companies will surely bring their best practices to these areas,” says Léon. “As rules and regulations are defined, we will see what types of sustainability targets and regulations are introduced. The assessment of these will be an important element in the restructured Mexican oil and gas industry.”