Drilling Waste Recycling Transforms Mexico’s Oil Sector

Q: What motivated you to return to the oil and gas industry and start your company again?
A: A company that recently won a major drilling contract had no way to handle the drilling cuttings, they called me due to my expertise and knowledge of prior contracts with M-I SWACO , even though I was thinking about retirement, I decided to invest: bought the containers, brought them, fixed them, and signed a contract. However, I did not have a company anymore. Then a friend said, “Hey, I have MINSA Energy.” I spoke with my accountant, we transferred the shares, and that is how MINSA Energy started about three years ago.

In three years, we went from zero to invoicing around US$87 million last year. Now we are at about US$150 million, with huge growth prospects. The problem that slowed us down was, as you know, PEMEX’s payment delays. I could have taken on more work, but cash flow did not allow it. Now, we are in a very fortunate position because top Oil & Gas Private Companies are financing the government, they took the highest-producing fields, and we are in talks to handle all their waste.

One of our main strengths is the commercial partnership we have with the largest producer of drilling chemicals in the United States, Integrity Industries, and the collaboration agreement between Integrity Industries, IMP and MINSA ENERGY for R&D. With this agreement, we are actively collaborating with incredibly innovative products, new things that work better and cheaper; disruptive, as they say. We are now selling products made from polysaccharides instead of hydrocarbons. For example, we use a kind of corn sugar that ferments into alcohol, which you mix with other products to make a hydrocarbon equivalent, but green. That is what we are working on: disruptive chemistry and drilling cuttings management.

Q: Can you explain what drilling cuttings are and how your company manages them?
A: Drilling cuttings, the largest waste stream in Mexico across the industrial sector, are produced when you drill a well. You start with a 36-inch diameter and end at four inches. It is like an inverted pyramid. What you are cutting are different layers, going from soil, lutites, clays, carbonates, sulfates, rock among others.

The cuttings come back with chemicals because drilling requires additives to lubricate the bit and pipe. For example, oil based muds are formulated and added to prevent collapse and keep the hole clear. In the past, the usual practice was to dispose the drilling cuttings directly to the sea, causing a negative environmental impact. Other countries banned it, but Mexico in 1994, with the closure of the Atzcapotzalco Refinery in Mexico City and the new environmental laws emitted by SEMARNAT and PROFEPA classified drilling cuttings as hazardous waste, and later as special management waste.

Originally, at the Dos Bocas refinery, all waste arrived in containers we specially made. I transported them to Monterrey, a very expensive 3,000km haul, but it was the only option. Later, with Waste Management, they proposed a thermal desorber, a lower-temperature alternative to incinerators, which evaporates diesel and water from cuttings.

When I became independent, I partnered with M-I SWACO. They brought technology to take cuttings offshore, mix them with sea water, smash and liquefy them, and then inject them into a dry well using high pressure pumps. We ran that contract for seven or eight years, becoming the leading company worldwide. Later, we developed a chemical technology to encapsulate hydrocarbons in cuttings and make bricks. I also tested bioremediation, but it failed in Tabasco due to heavy rain.

Using knowledge from the Mexican Petroleum Institute, we now inject a chemical that cleans formations even at 5,000m depth. We apply this to cuttings: remove and recover oil, treat the stone with chemicals, and make bricks, zero waste. We just submitted the environmental impact permit for a plant in Veracruz. This recycling and reuse of drilling cuttings, recovering oil for reuse, is unprecedented globally and being implemented in Mexico for the first time.

Q: How has the market for drilling waste management evolved in Mexico?
A: Over time, many companies started charging very little, buying land, and claiming to treat waste. The market became corrupted, horribly mismanaged. There used to be 20 companies, and it was a very ugly situation. Now, the market has improved. Today, there are three or four suppliers; the market is smaller, and logistics costs are more than half of total treatment costs.

This is because special permits are required to handle these materials, taking a year or two to obtain. Trucking companies charge what they want. That is why I decided to invest in Veracruz. The future of drilling cuttings management will shift there. Being close to waste generation reduces transportation costs. Previously, in Tabasco and Carmen, freight was a smaller part of costs, but now proximity matters.

Q: What are the main challenges of implementing your drilling cuttings recycling technology?
A: The challenge is to make authorizations simpler. Using disruptive and sustainable technology, we recover oil and use the waste to produce bricks which can be used in construction, this technology is called CALY-TECH you can sell or use them in roads, keeping costs low. The goal is for authorities to validate the process so small plants can replicate it elsewhere, reducing trucking costs. Once the process is authorized, cuttings are treated, oil is recovered, and the stone is reused. It is zero waste. That is my main challenge. It will not be easy, but it is the goal.

Q: How has your professional experience helped you navigate the regulatory and operational environment?
A: I was fortunate to start in chemical waste management with the biggest company in the world, receiving training in different technologies to treat hazmat and other kinds of waste management. That opened many doors to government officials, then SEMARNAT, PROFEPA, and state governments, to solve waste issues.

Minsa Energy is a Mexican energy solutions company with over 25 years of industry experience. Its services span five key areas: materials transport and logistics, chemical products, synthetic base fluids, sustainable chemistry and biotechnology, recycling and reuse of drilling cuttings, and solid control equipment, supporting efficient and environmentally responsible operations.