Creating a Framework for Risk Management

When asked about the current risk profile and safety standards of the Mexican oil and gas industry, Rafael Parrilha, Director General of Bureau Veritas Mexico, admits that there is still a lot of work to be done in the country. “Mexico has a lot to do, especially in deepwater. As we can see from Pemex’s strategic plan, the company will focus on two areas. One is enhanced recovery at mature fields, which involves work on assets that are between 20 and 30 years old. This means Pemex needs to think about asset integrity management and fitness for service, to be able to recover and operate those mature fields with a reasonable degree of safety. Regarding deepwater, Bureau Veritas is working on building partnerships with both Pemex and the CNH, to support them in the development of safety standards and regulations based on the knowledge we have from other countries.”

The regulatory and legal framework in the Mexican oil and gas industry is, in the opinion of Parrilha, a mix of the Brazilian and US models. “In some cases, Mexico has a self-regulating system. In my opinion, this is not the most appropriate system, as we have seen in the last year. In some cases, in Brazil for example, we have a certification scheme based on risk. I think the most important thing in Mexico is the need to define the role, the risks and assets at that early stage of a project.”

Parrilha believes that under the current regulatory and legal framework, Pemex is doing a lot to maintain its safety standards, with inspection, testing and certification activities all being contracted from Bureau Veritas and other companies. However, Parrilha says that as the company moves to new areas of operation, they will quickly reach the point where their existing operating experience does not prepare them for the challenges they must face. It is here where new regulatory frameworks will help the NOC prepare for its challenges.

Parrilha believes that in any future development of the regulatory and legal framework, flexibility is the key. ”It would of course be good for our company to have a strict, rigorous system that requires full certification for everything, but I don’t think this is the most intelligent system Mexico could adopt. I would propose adapting the system to the risks evaluated from the early stages of each project.”

Parrilha only joined Bureau Veritas’ Mexican office at the start of 2011, but since arriving in the country has found Pemex’s openness to changing its safety standards promising for the future development of his company’s business. “We are currently discussing with Pemex some opportunities to help them both develop additional standards and to evaluate existing ones. We have some contracts with the company for testing, inspection and certification services. Based on the work we have done, I have come to the conclusion that Pemex’s safety standards are at acceptable levels. In my opinion, Pemex’s next challenge will be to move its safety standards and regulations to the next level, which is something they are aiming for. In deepwater, for instance, the company has no safety standards in place, and more will have to be done to develop standards at shallow water projects as revitalization projects move from the drawing board to reality. These new standards will have to strike an important balance; whilst maintaining a strong focus on safety, they will need to be pragmatic and feasible changes that do not provide too many new challenges for contractors and suppliers.”

As an international company with 180 years of operating experience and knowledge of over 140 markets, Bureau Veritas has a lot to offer in terms of bringing new ideas to Mexico based on its understanding of the way safety regulations work in other countries. “Safety standards should not be ‘one size fits all.’ Mexico has different conditions offshore than somewhere like the North Sea, and safety standards should reflect this. If looking for a comparison, Mexico would do best to consider markets such as Brazil, West Africa and Australia. Still, before adopting any standards, it needs to ensure that the standards are tailored to the exact conditions of the Mexican market.”