Drilling Solutions Deliver Results in Chicontepec

It does not take an oil and gas expert to guess that to successfully face this industry’s future challenges in Mexico, being armed with the right knowledge and technology is crucial. It turns out Key Energy Services possesses both in Mexico, doing over 5,000 well interventions, including repair operations, across the country. Today, the company’s services are divided between technology and knowledge. The former is covered by its offering of well drilling, workover and repair operations, flexible piping, steel lines, and electric registries, while the latter is covered by Key Energy Services’ consultancy division. Rafael Graham, Mexico Country Manager and Managing Director International Business Development of Key Energy Services, claims no other player can match this twin expertise. “Our goal is to become the preferred supplier for customers in mature fields and well repair operations,” he says.

Graham says overall activity in Chicontepec has decelerated and, given the results of the Third Round of ISCs, PEMEX’s demand for the company’s services has also decreased due to the shift in focus of the oil company’s 2013 budget. Key Energy Services has used the situation to diversify its client portfolio, working with other important players, such as Monclova Pirineos Gas and Schlumberger, companies that are working in other mature fields throughout the country. Graham says the experience obtained through ISCs definitely gave Key Energy Services an appetite for future collaborations. The firm has studied the fields that were tendered during the last round and has identified some of the most meaningful opportunities. Taking this into account, Key Energy Services is considering participating in upcoming ISCs in partnership with other players. Given the adversities it faced during 2013, Key Energy Services is more than ready for the business climate to improve. Graham knows the Energy Reform will attract more private investment, which will increase funding for new technological developments that are vital for fields such as those in Chicontepec, for which the company is biding this time. This new sector will allow Key Energy Services to engage with both PEMEX and private companies, although Graham explains that each entails a different approach, mostly in terms of operational requirements. Key Energy Services spent much of the fallow period of 2013 working on wells in the South Region, to bolster its visibility and prove its capabilities. According to Graham, striking a balance between workovers and drilling new wells is a critical factor in any company’s success. “A workover results in the cheapest oil production of all, since the infrastructure is already there and success is based on a detailed prospect analysis. New drilling operations are as important as implementing new technologies to improve recovery factors in the field,” he says, adding that this is particularly important for operations in Chicontepec. Graham finds the South Region’s well diversity to be of high interest, given its challenging blocks with high depths, temperatures, and pressure levels. The region also presents Tertiary projects that are suited to the equipment Key Energy Services already has in Mexico. For example, the company’s torpedo technology yielded positive results when deployed in certain wells. This system fractures formations with an explosive that creates a mechanical wave to increase their permeability. Unfortunately, problems with contracts have not allowed Key Energy Services from further rolling out this technology.

One problem Graham has found in Chicontepec is that the area is made up of many small reservoirs, producing minor quantities of hydrocarbons which are not interconnected. If all these small reservoirs were to be connected, production would increase and the financial feasibility of doing the project would be higher. With that challenge in mind, Key Energy Services also provides the option of implementing a multi stage fracking approach called Fractured Kilometer. This consists of drilling various wells and defining blocks of one hectare in size, making as many fractures as possible within this area to link all the productive reservoirs and enhance oil flow to the surface. This multi-fracking technique is more costly than vertical drilling, but the results end up yielding a larger output with just one well being drilled. Another of Key Energy Services’ instruments, the KeyView control software, has also provided notable operational advantages in Chicontepec. Graham explains KeyView brings net safety benefits, saying that his company’s competitors are more prone to accidents as they do not have the equally effective security systems in their equipment. He says Key Energy Services can also provide faster services due to its control systems such as KeyView. “We strive to be more efficient regardless of the available resources, which enables us to reduce costs,” says Graham. “Imagine an unexperienced driver who drives at a slower pace as he is not fully comfortable with the vehicle. The KeyView software allows operators to work in a more controlled manner, giving them the confidence to operate faster.” These technologies can also be applied in offshore operations, a segment on which Key Energy Services is counting on, given its prior experience in fishing services in the US side of the Gulf of Mexico.