Changes in Service Providers Mirror National Landscape

Q: How would you describe the impact of COVID-19 on Mexico’s oil and gas operations and the most important lessons learned from the pandemic?

A: The pandemic took place in the midst of an ongoing process of change for the entire oil and gas industry. Our work in Mexico throughout the pandemic has been focused on helping companies to accelerate recoveries despite the operational consequences from implemented safety measures. For instance, efficiency needed to be normalized while keeping workforces and crews safe. On a broader scale, we needed to help companies evolve under the understanding that changes forced by the pandemic would be permanent. 

The Mexican oil and gas industry is more than capable of running at the same pace as technological advancement, which it proved throughout the pandemic. The industry’s levels of adaptability were much higher than expected and our interactions with our clients proved that the industry was ready to have a different relationship and adapt to this process of change. 

While activity in certain key fields decreased, activity in new fields increased. This new environment has created unprecedented opportunities for our clients to generate and find value in oil field services and operations. Efficiency, security and reliability in oil field practices increased as a result of the pandemic.

I use the term “financial solidarity” to describe the way in which major industry players, including us, have dealt with cash flow issues in their client-contractor relationships. This financial solidarity has been essential for the continuity of the industry’s operations; through this solidarity, interested parties have supported each other in extremely difficult times. The new communication platforms have also helped to solve these issues promptly. 

Q: How have your service portfolio and value proposition changed as a result of the events of the last 12 months?

A: Operators and service providers have had to make space to develop more collaborative workflows. They also had to develop new approaches to their social and economic commitments in the countries in which they operate. This applies to the political environment in Mexico but can also be observed as a common dynamic in other oil-rich countries in the region, such as Venezuela. Our service portfolio reflects that need. For instance, in Mexico, the goal of achieving energy sovereignty and security is front and center. The channels of communication between operators and government authorities need to reflect that prioritization. 

Our services also reflect the need for oil and gas companies to strategize for the energy transition. This means decarbonization, particularly in regard to cleanliness of fuels and power sources that are being used in their operations, along with the energy efficiency of their projects. We now play a more active role in advising our clients when it comes to their search, analysis and choice of new technologies and methodologies that can achieve these goals. We need to outline that companies like PEMEX follow two directives or commitments that are sometimes presented as contradictory but must be aligned. One commitment concerns an operator’s need to be financially competitive and the other concerns the need for operators to make social contributions to the countries in which they operate. This includes NOCs like PEMEX. 

Q: How would you evaluate PEMEX’s ability to adapt to all of these changes?   

A: At CBMX we are committed to providing three essential resources to the NOC: organization, technologies and human capital. Our company has important professionals with more than two decades of experience in the industry, and they have been involved in many of PEMEX’s operations. We integrate operational, technical and managerial knowledge and experience into onsite support. From this perspective, we have witnessed a significant increase in the NOC’s competitiveness, which started in the 1990s. This has been reflected in PEMEX’s maximum productivity levels during this period. The NOC, given the sophistication of its teams and project leaders, is ready to face these challenges. We have seen the NOC reduce losses and decrease NPT through the adoption of technical best practices in each consecutive project.      

PEMEX is able to adopt new methodologies after applying them to only one project, particularly if we are the ones participating in that adoption process because, while we do develop these methodologies in-house, we also offer them freely, without licensing fees. We have also built significant ties with Mexico’s educational institutions, which means we participate in the talent development process and the companies involved in the technological development for PEMEX’s operations. PEMEX is uniquely positioned to successfully face the present-day challenges.

CBMX Servicios Ingenieria Petrolera (formerly CBM Ingeniería, Exploración y Producción) is a technical engineering and process consultancy for the Mexican oil and gas industry focused on upstream efficiency and operational success.