STORY INLINE POST
Q: How do the company's strategy and results in 2022 compare to its performance in recent years?
A: DNV Energy Systems performed better than expected during the COVID-19 pandemic, when home office and remote inspections were the reality. Mexico even became one of our strongest markets. In 2022, DNV has been well-positioned to serve all its customers and the company is ahead of its targets in most regions. Companies trust our extensive experience in the industry and high-quality services, which ensures that they come back for our services time and time again.
DNV has identified that the drive for the energy transition has strengthened in Mexico, especially among private companies. The change in the industry is also a result of pressure from investors and funds that demand better performance in ESG matters. Therefore, we now see traditional oil companies that are more open to renewables as well as new players that have entered directly into the renewable power trend. We have been pioneers in the renewable sector and started supporting it 30 years ago. Consequently, we are now rounding out our service offering and developing more solutions on the renewable energy side, which allows us to perfectly align our offer with all types of customers far beyond the traditional oil and gas industry.
Q: What is the outlook for renewable energy development in Mexico and for the oil and gas industry in general?
A: Right now, Mexico has several problems around renewable energy since the political landscape does not favor its development. However, there was a notable change in the government's position at the COP27 meeting in Egypt. Let us hope that these discussions will turn into actions in the coming years so that Mexico can take advantage of more green transition opportunities.
Regarding the oil and gas industry, it had a bad reputation before the Ukraine-Russia war. However, now the perception has changed, as people realize the crucial role of oil & gas for energy security and see that the industry is moving toward more environmentally-friendly practices.
Q: In what areas can DNV best support customers in Mexico?
A: Our strongest offer is to provide support on the regulatory side, especially with all the permits that companies need from ASEA and the other regulators. DNV enjoys a good relationship with ASEA. We had some issues with extensions of our accreditations during the pandemic, which was an industrywide issue. However, now that the pandemic has abated, these aspects are flowing much better than before the pandemic.
In addition, DNV helps with regulatory compliance for offshore projects, as the universe of required permits from different authorities is highly complex, especially for foreign operators new to Mexico. The company also carries out inspections of materials and equipment. DNV has an international network of inspection offices, with a presence in more than 100 countries, where we can offer further guidance and carry out inspections related to quality matters.
Q: How is the company progressing with LNG projects in Mexico and what are the challenges in this regard?
A: In Mexico, we have been working with IEnova’s Energía Costa Azul (ECA) project since 2004 for the initial verification during construction and the ongoing verification that the company must carry out every year. LNG projects have a wealth of opportunities in Mexico, so we expect they continue to push forward. As to potential obstacles such projects may face, the main issues were government permits, especially for the export of gas. During the pandemic, permits moved at a glacial pace or were difficult to obtain. However, now that the process has been sped up, permissions are no longer truly an issue.
Q: What other projects for LNG export is DNV looking to participate in?
A: We are approaching all companies that are developing LNG projects now on the Pacific and Atlantic coasts. One must take into account that they are in different stages, but all have considerably sped up with the strong increase of gas demand and price in Europe and other places in 2022. Apart from the terminals themselves, Mexico is missing gas pipelines to bring in more gas from the US to liquefy and there are also some links missing to better interconnect the transport systems. We are well-positioned to support those projects as well.
Q: How is DNV of value to PEMEX and what digital tools does it use for its work with the NOC?
A: DNV recently completed a two-year risk analysis project for all assets of PEMEX Exploration and Production, with highly satisfactory results for our client. In addition, DNV conducts investigations when PEMEX reports accidents. We also provide training on integrity management, relying on our standards that we developed based on global experience and best practices. For instance, DNV has been training a group from PEMEX in Ciudad del Carmen. Apart from the training we implement Asset Integrity Management systems for our clients’ assets in the energy sector, regardless of oil and gas installations, pipelines or renewable power plants. We provide engineering services but also our cloud-based software suite SYNERGI.
In terms of digital tools, DNV relies on the Veracity platform. It works like a data marketplace, where companies can collect their data and that of external providers, or DNV develop algorithms to extract value from the data. The platform was started 5 years ago and now has 32,000 companies connected and 300,000 users from different industries. For instance, a client's ship documentation can be uploaded to the platform and they can give access to a port authority before the ship arrives. This enables the authority to check the documentation beforehand and drastically reduces the time of the inspection.
Q: How important is cybersecurity for DNV in Mexico?
A: Cybersecurity is one of our key focus areas now. We have developed advanced products to tackle the issue. In 2021, DNV bought a specialized company in the Netherlands, Applied Risk. With that company in the DNV family, we are applying our services for Mexican clients to verify whether companies are well protected against online attacks or highlight where they have weaknesses so that they can strengthen their defenses.
Q: What is the company’s ESG strategy and how does it seek to promote it in Mexico?
A: ESG matters are a major priority in DNV, especially social and environmental matters. DNV Mexico´s offerings focuses more on the environmental aspect, as the social aspect is not an issue we normally interact with. In terms of governance, DNV guides clients that require an assessment. In addition, the company’s software platform, called SYNERGI Life, helps clients with issues of employee health, compliance and governance.
As ESG issues become more important, we can support the country's environmental efforts and commitments by bringing over technology that we have developed in other places like the Middle East and Europe. For instance, our combined satellite observations and drone solution could make it possible to monitor and measure methane emissions in Mexico, showing where the most important problems are. This has become an especially important topic in recent months, as Mexico’s methane emissions are allegedly exceptionally high.
Q: What are DNV's objectives in 2023 and what is the outlook for its main projects?
A: Other than a growing focus on renewable energy initiatives, cybersecurity is an area that DNV wants to promote in Mexico. We plan to reach out to key operators and show them how our solutions can help them. LNG and gas pipelines will also be a key focus. The company will also continue to support oil and gas projects like Woodside´s Trion, where we support Woodside with all the regulatory compliance and third-party work for the FPU and some of the related installations. Furthermore, DNV will continue to be of service to Hokchi Energy, Eni and others.