Dedicated to Mexico 100 PercentWed, 01/11/2017 - 13:09
Q: As a multinational, how does Petricore function in Mexico?
A: Our Mexico team mostly originated with Core Lab, the largest core analysis company in the world. We left Core Lab in 2003, set up our own business and became successful fairly quickly. We went into partnership with ResLab, a Norwegian company that at the time was probably the second-largest core analysis company in the world. We built up ResLab Mexico until 2007 when Weatherford acquired ResLab. After fulfilling our two-year commitment with Weatherford, we left again and with our Norwegian partners from ResLab we created Petricore, which now has multinational operations.
Petricore’s corporate office is in the UK and we have subsidiaries in the US, Mexico, Colombia, Abu Dhabi and Norway. Our biggest and most important operation is in Mexico. Operations in the U.S. and Colombia work alongside Mexico. The fully equipped lab in Abu Dhabi works alongside the digital rock operation being developed in Norway.
Q: What has been the main driver of Petricore’s success?
A: It is a combination of management’s vision, keeping the team together and the fact that we took our clients and relationships with us. Our biggest success has been our ability to serve the market directly in Mexico, whereas our competitors were not willing to commit to investing on the ground here. As a result, they must export their samples to an international lab, often in Houston, and it takes them a lot longer to get the results. Our competitors are not on the ground with the client like we are. I think that is our biggest competitive advantage.
Q: How would you evaluate the learning curve regarding Mexico’s geology?
A: We have been doing this for so long now, and have had so much experience, that we have a very broad knowledge of the geology of Mexico. The biggest learning curve these days is actually dealing with the changes in the market. Today, there are some 150 potential clients whereas three years ago there was only one. That is something our team is not used to. We have always worked for PEMEX but now the market is much broader.
The biggest challenge is creating confidence so those clients believe in us. Many of these clients are used to dealing with Core Lab, Weatherford and the big international companies. As a relatively unknown Mexico-focused service company, it is a challenge to obtain their confidence, but I think that is coming. We are doing relatively well. Also, there are many people working in those companies now who we have known for a long time because they have been in the business here working for PEMEX or other service companies.
Q: What is Petricore's turnaround time for cores sent to Houston compared to other companies?
A: We estimate one month instead of three months. PEMEX has two big core analysis projects, one with us and the other with a larger international competitor. According to the budget, the work is supposed to be divided 60-40 in our favor but in reality, it is more like 70-30 because we are responding much more quickly than our competitor. The key point is to make sure the quality of the service is at least comparable to that of our larger competitors.
Q: How are multiclient studies developing as part of Petricore’s business strategy in Mexico?
A: It has been complicated so far. First of all because CNH did not fully contemplate this area and actually had to change the regulation to take multiclient studies of wells into account. We are still struggling with the legislation and with CNH because even for simple things like selling multiclient studies, the commission’s approval is required. We can only sell to clients that are already registered with CNH and before we can sell the study CNH must approve it. But to do the study we need a commitment from clients that allows us to spend the money. We have a conflict there as we cannot collect money from the clients until we get approval from CNH and until we receive the approval, we cannot carry out the study. It is a problem that we are addressing and we hope to have our first approval soon.
Q: How would you evaluate the process of working with PEMEX’s core inventories, which now belong to CNH?
A: We are in the process of putting those samples in good order. There is a great deal of demand for information from these samples. The first proposal we have is to do a regional study of the Perdido area on the Mexican equivalent of the Wilcox formation. Our alliance partner is the recognized expert on this formation, located in the US Gulf of Mexico. There are some 20 clients that are ready to pay to obtain this study. It is all essentially ready, but we have been waiting for approval from CNH. We have another study for shallow waters in southeast Mexico and another for shale gas in the Burgos basin, all of which are being prepared with committed clients. I think once these studies become public knowledge, there will be a large demand for them. This situation is also good for CNH because our work will improve the data it makes available to operators.
Q: Are there any new technologies that you are introducing?
A: We are promoting a technology for high-resolution interactive images, meaning clients can buy the image and then use their computer to view the image as if they were looking at the rock under a microscope. In fact, the image is even higher quality and clients can do this in an office at a desk without having to travel. Without actually having to have access to samples, these same images can be purchased by many clients, many times over. CNH has already announced that this information will be available to operators.
Q: What is the scope of your activities with PEMEX?
A: Our activities with PEMEX have traditionally been tied to exploration. Globally, we have experienced more demand from the production areas where we help search for information on how to best design production systems. With PEMEX, our work traditionally has been with the exploration department and exploration wells. They are always doing mudlogging and cutting cores.