Gabriela Hernández
President and Director General
GE Mexico
João Geraldo Ferreira Ferreira, Vice President of GE Oil & Gas Latin America
João Geraldo Ferreira Ferreira
Vice President
GE Oil & Gas Latin America

Cross-Innovation and Technology Development

Tue, 01/22/2013 - 15:09

“Technology is part of the DNA of our company: everything we do is at least in part related to innovation and development of technology,” says João Geraldo Ferreira Ferrera, Vice President of GE Oil & Gas Latin America. The company has a specific focus on developing technologies that are customized to the unique challenges in certain regions. For example, the technologies needed to explore pre-salt developments in Brazil are di†erent to the technologies needed for shallow water exploration in the Gulf of Mexico, which in turn are di†erent to the technologies needed to explore shale gas in Argentina; therefore, “at GE we are focused on not only developing technology for the oil and gas industry as a whole, but for specific niches that make the oil and gas industry more competitive and more e·cient,” says Geraldo Ferreira.

As a means of developing technology for the oil and gas industry, GE has a unique and creative innovation strategy that transcends industry boundaries. “Since technological innovations in one industry could potentially help to overcome challenges in other industries, we always try to cross-innovate and leverage technologies used in one industry, virtually with no adaptation or customization, to address problems in another industry,” he explains. Furthermore, “the intersection of expertise, PhDs, engineers, scientists, doctors, specialists in aviation, transportation, and oil and gas is extremely rich, which makes us one of the very few companies in the world that can really bring that strength of R&D and technology into any industry,” explains Gabriela Hernández, President and Director General of GE Mexico. For example, GE has used healthcare technology to analyze and understand x-rays and seizures as a means to explore and understand a variety of di†erent problems and challenges at oil and gas wells.

In order to be successful in this strategy of cross-innovation, GE has four global research centers in China, India, Germany, and the US, and recently announced the opening of a fifth center in Rio de Janeiro, Brazil. However, even though GE does not have a global research center in Mexico, the company opened a Center of Excellence in Queretaro as the core center for technology innovation dedicated to specific Mexican technological needs. “Basically, it is an opportunity for us to develop and innovate technologies specific to the Mexican oil and gas industry that hopefully – in the future – will be implemented in the region and eventually across the globe,” says Geraldo Ferreira.

The opening of this engineering center in Queretaro has a lot to do with Mexico’s economic prospects and the imminent energy reform. Depending on the outcome of the energy reform, GE will assess the level of commitment and resources it will invest in its Queretaro engineering center. However, even if the energy reform does not pass, there is still space for growth, “but if the reform does pass you are talking about really modernizing the industry, bringing a lot of resources, and creating wealth for the country and the company, which is a win-win for everyone,” explains Hernández.

Besides focusing on technology innovation and development, GE’s major areas of business are healthcare, transportation, and aviation, but the energy sector – which includes power and water, energy management, and oil and gas – is fostering GE’s growth in Mexico. “Of the three, oil and gas is the second largest division. However, we are planning for it to become the largest, or at least as important as the power and water business,” says Hernández.

The future looks bright for GE’s activities in the oil and gas industry, and Geraldo Ferreira believes Mexico’s main potential lies in o†shore exploration, development, and production. Nonetheless, in order for this potential to turn into real opportunities for growth, he believes: “After the regulatory framework is updated, Pemex will have an interesting opportunity for a new market strategy, technology understanding, and how to establish partnerships for o†shore joint ventures, and seriously go to the Gulf of Mexico and explore and develop – just like the US is doing.”

Despite being criticized for not venturing into deepwater earlier, Pemex’s strategy has been extremely successful, since the company has the advantage of having technology agreements with international oil companies such as Petrobras, which allow the company to exchange education, technology, and knowledge. However, even though Mexico is lagging behind countries like the US and Brazil with regard to deepwater exploration and production, Geraldo Ferreira strongly advises not to forget Mexico is still producing more oil than Brazil, Colombia, or any other country in Latin America. “We have to put this into perspective, because it is really hard; we cannot ignore the fact that Mexico is the top producer in the region,” explains Hernández.