Luis Moncada
Vice President
Baker Hughes
View from the Top

Drilling in Unconventional Fields

Tue, 01/22/2013 - 11:37

Q: What technologies and processes could be brought from Baker Hughes global operations to address main challenges in Mexico’s unconventional fields?

A: Right now a group of Pemex engineers is at our R&D facilities in the US to see what technologies Baker Hughes uses in the US that could potentially be applied in Mexico. Even though Baker Hughes has neither drilled any shale wells for Pemex nor has it provided any services in this field, the biggest challenge for Pemex is how to make those wells profitable. The issue that Pemex has had in the north is that it has spent a lot of money drilling wells that did not yield the production that was expected from this high investment. Nevertheless, we are working with Pemex on an after-action review and analysis of the techniques that could be used to increase production, and thus make the company’s shale wells profitable.

Q: Mexico is evolving from easily-extractable oil two more challenging production from unconventional oil and gas reservoirs as well as deepwater. Which role could Baker Hughes play in this process?

A: Every reservoir is di†erent but we always try to identify similarities between them. For example, we have drawn parallels between Chicontepec and fields in the US – like Marcellus. There are always things we learn in one place and apply in another, and we always push our scientists and researchers to look for these parallels. For example, water technologies that we have used in places with similar conditions and geology are being considered for potential application in Chicontepec. Our focus is not only on Chicontepec, since Pemex is conducting an aggressive deepwater campaign. Baker Hughes is a leader in both the drilling and completion of deepwater wells in the US Gulf of Mexico, and there are a lot of lessons to be learned from operators on the other side of the border that could be applied here in Mexico.

Q: How successful is Pemex in attracting and applying new technologies for unconventional and mature fields?

A: We are seeing great improvement in this area. There are a lot of technologies that have not been applied in Mexico for di†erent reasons; however, as Pemex opens up its contracting scheme, more companies enter the Mexican market and showcase their technologies. For instance, the field labs are a great example of Pemex being more flexible and more aggressive in pursuing the technologies needed to exploit Chicontepec. What has made our field lab in Corralillo successful is that we really paused and took the time to analyse the reservoir to develop an optimal drilling and well completion plan, rather than rushing in and drilling. That made the di†erence. In the end it comes down to analysing and identifying where and how to drill those wells in order to optimize production and not commit mistakes that cost time and money.

Q: Is shale gas in itself profitable enough for Pemex or should the company focus on shale oil?

A: Prices of gas today, especially in the US, are fairly low, which makes it challenging for a lot of shale gas wells to be profitable. However, with the right techniques, Mexico has the opportunity to become a large gas producer, able to satisfy national demand and maybe someday once again become a net exporter of natural gas.

Q: What are the main advantages and expertise that would dierentiate Baker Hughes from other companies with the ambition to become Pemex’s partner of choice in future shale gas projects?

A: In shale gas we have developed new technologies like AutoTrak Curve, which is a directional drilling technology specifically designed for shale gas and shale oil applications. We have been successfully applying that technology in the US, and as Mexico develops its shale resource we could potentially bring this technology to Mexico. It would make a di†erence in terms of improving drill speed and increasing the contact with the reservoir.

Q: What has been the impact of shale gas drilling in the US on the availability of drilling rigs for international markets? How would a slow-down in the US shale gas market aect the availability of these rigs for Mexico?

A: I think activity has been fairly soft in the US; therefore, there is an excess of drilling rigs that could be readily and easily moved to Mexico. Regarding Baker Hughes, I would say we have great capacity in the US that we can rapidly deploy, as we have done in Chicontepec in recent years.