Gordon McCormak
Former President and CEO
Hyduke Energy Services
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Insight

Expertise in Streamlining Production Processes

Wed, 01/22/2014 - 16:19

Hyduke’s growth strategy has led it to focus on emerging economies to find new business. This led the Canadian energy services company to hit upon Mexico as its main target for international development. “The Canadian economy, especially the energy sector, is very boomand-bust, so we needed to look to markets and industries outside of Canada in order to sustain our growth, while keeping our leading position at home,” explains Gordon McCormack, former President & CEO of Hyduke Energy Services, which specializes in drilling, well intervention, and workover services. “Mexico was an obvious choice, both because it is not far away from Canada and there is not a huge time difference, and since PEMEX was starting to deal with the production decline in Cantarell. As a consequence of the steep slump in production that Mexico was facing in 2005 and 2006, a lot of Mexican and Canadian professionals started getting together to talk about technology. The idea was to find ways in which Mexico could tap into Canadian technology to deal with Cantarell’s production decline.” As it turned out, these conversations paved the way for Hyduke to enter the Mexican market. “We were looking for a place to expand and it just so happened that both our countries were getting together to look for technological solutions that could increase Mexico’s oil production.”

Bursting into a new market is not always easy, especially when the Mexican market presents great cultural differences as compared with Canada. McCormack realized this when directing Hyduke to expand towards Mexico. “There has definitely been a learning curve. Canada has plenty of skill, ability, and experience, but not all of this is transferrable when entering into another market,” he points out. “The first thing we needed to do in Mexico was to listen. We interacted with our customers and the main industry players to see what challenges operators and contractors were facing in Mexico. Then, we tried to gauge our response: whether we already had what was needed to help solve these problems, or whether the situation required us to come up with new solutions.” Hyduke has a state-of-the-art, in-house engineering and design group to produce or develop equipment that has helped the company to become part of Mexico’s active workover market. “As it turns out, the biggest difference that we encountered when designing products for the Mexican market was the heat and ambient humidity,” McCormack explains. “These factors forced us to make certain changes in the way we designed our equipment and the way we undertake our processes. While in Canada, we had to take care of the equipment by insulating it from the cold, in Mexico we had to insulate the equipment differently in order to prevent it from overheating.” Other factors the company had to prepare for were mostly related to corrosion. “In the coastal regions of Mexico, the salt in the water and the air could be quite tough on our metal structures,” he continues. “Our own coating business has come up with the appropriate coating to protect our equipment from such specific adversities.”

“The approach of reactivating and stimulating existing wells is important within the industry and represents a big part of the overall strategy to increase national production,” McCormack says. “Our biggest aim here remains well service and workover products for existing and mature fields. The idea of applying and using new technology to increase production in what were previously considered depleted fields is also picking up traction, which plays right into the hands of Hyduke’s product and service portfolios in the well service and workover branch.” Working with international companies that are being tasked with working on mature fields and depleted fields, with Halliburton and Baker Hughes leading the charge, Hyduke expects to see demand pick up for its workover products. “Our equipment is situated atop surface of the well. The workover hoists that the operator uses to introduce the downhole tools and programs it develops to increase productivity are directly responsible for increases in that same productivity,” claims McCormack. “So while we might not directly increase productivity, we significantly influence the result through our products and services: decreasing downtime, guaranteeing efficiency, and doing our work quickly plays its part in helping our customer lose less production.” McCormack believes that Hyduke’s biggest advantages include the swiftness of its execution, the reliability of its equipment, and the efficiency of its service. “Well servicing jobs tend to benefit from being as short as possible, so our equipment is highly mobile and has the ability to be transported quickly, thus diminishing non-operational timeframes for the customer,” he describes.

The future seems bright for Hyduke, McCormack believes. With PEMEX open to tender some of the more depleted onshore fields to private players, the Canadian company will offer its products and services to deliver efficiency and diminish downtime, while streamlining the process to increase production. “We will continue to follow a collaborative approached based on listening and learning from the local players,” concludes McCormack. “Differences in geology, supply chain elements, technology, and other factors make us reconsider our products and evaluate whether or not they need to be modified to fit the industry’s new circumstances.”