Home > Oil & Gas > View from the Top

An Experienced Player Seeks Mature Opportunities

Roberto MC Leod - Petrolera Cárdenas Mora
General Manager

STORY INLINE POST

Thu, 04/19/2018 - 10:15

share it

Q: PICO Cheiron won the Cárdenas-Mora farmout with PEMEX? Why is this significant?

A: The Cárdenas-Mora farmout we won with PEMEX is groundbreaking because it is the first where production is already present, while Trion, won by BHP Billiton, has a fairly high exploratory profile and associated risks. We understand that being PEMEX’s partner is a little difficult because it worked individually for a long time so we have to find a way to create good synergies with the NOC.

We recognize that PEMEX cannot change in one day. Fortunately, we have found PEMEX has been willing to work as part of a team, which will benefit both companies. The NOC is open to working with us to find the best technology solutions to improve operations and to reach optimal levels of production in the field.

Technically speaking, we identified attractive characteristics in the Cárdenas-Mora block that made us comfortable with placing a strong bid. Officially, we started operations as partners with PEMEX in CárdenasMora on March 6, and things have worked very well so far thanks to the good communication between us. The block has great potential to become highly profitable for us, PEMEX and the country.

Q: How do you plan to increase production in the mature fields you have in Mexico?

A: We have not yet introduced specific technologies to increase production in the farmout, as we are just taking over operations. We are studying the field to evaluate which of our strategies could work best to increase production and profitability. While some strategies have already been identified, it is extremely important not to base final decisions only on information from a data room, but to conduct production tests and see what the well displays.

In the case of our CIEP in Altamira, we have already used the best well-engineering technology to keep the well balanced and to avoid damaging the formation. We are also introducing a pilot project to inject vapor to increase the recovery factor of the well.

Q: Why has PICO Cheiron not yet finished the migration process of its CIEP in Altamira?

A: When the CIEPs and COPFs migrations started we were one of the first companies to present the documentation to PEMEX and to the Ministry of Energy but soon after, and due to a change in strategy, we temporarily retired from the process because we had other priorities. Weresumed our conversations with PEMEX last year and we expect to formally continue the migration process in May 2018.

Q: How would you rate the state of Mexico’s oil and gas production infrastructure?

A: Mexico is an oil and gas country. This has allowed it to create an extremely experienced national industry. In the country’s key oil and gas states, there is a wide range of infrastructure in place to produce and transport oil and gas. While it is true that the infrastructure has grown old and production has declined, this is due to economic factors and technical aspects such as the natural depletion of a well, and not because of a lack of human talent capable of handling cutting-edge technology. As a matter of fact, in Mexico almost all our employees are Mexicans and we are even looking to find more local talent. We have also found in Mexico a strong value chain that has almost all the products and services we require.

Q: How will PICO Cheiron use its Mexican operations as a springboard to Latin America?

A: PICO Cheiron wants to grow in Mexico. While the possibility of expanding into Latin America exists for us, first we want to consolidate Mexico as our focal point. That is why we created Compañía Petrolera de Altamira five years ago to provide support to PEMEX via a CIEP.

Q: Will PICO Cheiron take part in Rounds 3.2 and 3.3?

A: PICO Cheiron has a focus on shallow water and onshore mature fields, and from time to time those with exploratory opportunities. At this point, we want to stay focused on mature conventional fields but we are also looking at the possibility of venturing into unconventional fields. That will depend on the outcome of the numbers we run. For future rounds, we will follow this trend and bet on fields where we can provide the highest added value.

Q: What impact would you like PICO Cheiron to have on Mexico’s oil and gas production?

A: A single company cannot increase the country’s production. Now that the market is open, Mexico needs to allow the entrance of more companies so each can contribute to increasing the country's production rate. In my experience, Mexico is taking the right steps to become even more competitive in the global oil and gas industry. It took it more time than it should to open the market, but now that the decision has been made, it must continue. By the end of 2018 we would like to win another block and finish the migration process of our CIEP in Altamira. With that in mind, we would like to see PICO Cheiron as a fully consolidated subsidiary in the country. This goal implies a great deal of work, but we are prepared.

Q: What would you recommend to the new administration to strengthen the country's oil and gas industry?

A: The opening of the oil and gas market has been positive for Mexico. It must be recognized that Mexico is going through a steep decline in production, and also that we cannot expect to change the trend in one day. The process of stabilizing production, and then increasing it, will take time. Most probably it will not change in the coming five years. Mexico must therefore ensure that the openness introduced by the Energy Reform does not change, that institutions are respected and that investments are secure. The world has placed its faith in the country. Mexico must ensure that faith can be translated into a profitable business that is good for the companies and also for the country.

You May Like

Most popular

Newsletter