Experts in Mature Fields Look to Diversified Future

Q: What are the main changes the company has made to its processes as a result of the present industry context?

A: Obviously, the projections that Mexico and other oil-producing countries were counting on for 2020 have been drastically affected. As a result, we have seen the reshaping of investment plans for NOCs, IOCs, and medium-sized companies everywhere. We are no different. We had to adjust our expectations and budgets accordingly. Upcoming projects were put on hold, particularly the launch of our offshore activities off Paraiso's port town, Tabasco. This project is an alliance of a local company with PEMEX as our client but is currently on hold. We expect they will restart sooner rather than later, depending on the evolution of COVID-19. The work invested in these projects is not lost. Together with PEMEX, we will coordinate the safe execution of our activities and then resume working. I think all service and technology companies like ours in the Mexican oil and gas sector need to harness our experience with similar situations. For example, we faced twin crises with our operations in Ecuador. We believe that building effective emergency protocols unique to the company in the case of COVID-19 contagions are essential. These initiatives turned out to be beneficial for us because it has motivated our technological evolution by forcing us to invest more in our digitalization and automation processes. Our mentality and attitude had to change accordingly. In a certain sense, we had to readjust ourselves in a preventative way to avoid having to adjust our operations to some other emergency down the road.    

Q: How does the oil price environment change the appeal of your lifting and well intervention services?     

A: On one hand, a higher oil price allows service companies like ours to increase their rates significantly. With lower prices, regardless of how much more appealing our services might become, our prices still have to go down, which means our entire supply chain might have to be compressed and rearranged to keep profits coming. Our advantage in this context is that we possess the technological capabilities that can adjust our tools and solutions to each well. This flexibility gives us more options to make our operations more efficient. We can also adapt to the conditions of each reservoir.

Q: To what degree are you redesigning your Mexican client and project portfolios between the public and private sectors?

A: PEMEX is undoubtedly an enormous player for us, not just in terms of our direct work for the NOC but also in terms of the work we do for companies like Baker Hughes GE with PEMEX as its client. We, too, do extensive work for private operators in Mexico, like Petrofac, for whom we recently concluded a technological test and obtained very positive results. Unfortunately, Petrofac's ownership is transferring to new owners, and we have yet to establish contact with this new management team. Either way, we continue to approach the big operators, especially in the offshore area. We have demonstrated our offshore capabilities previously in successful projects in Peru and Trinidad and Tobago. We are also thinking of providing services to large companies in exploratory phases to reshape our portfolio regarding those terms. 

In general, Mexico's position in our global portfolio continues to be quite high. It has not been an accessible market to enter. However, I think we have established a valuable precedent with PEMEX regarding the quality of our services, our international profile, and the competitive prices we offer our clients. In assets such as Samaria Luna and Cinco Presidentes, among others, our solutions have proven successful.

Q: What would you consider to be your most important projects despite the industry's contraction?       

A: We are currently in talks with prestigious oil & gas and renewable energy companies with whom we are evaluating an array of opportunities. The truth is that their interest in us, as the interest of other companies, has to do with the broad applicability of our expertise and technologies, which extends into both offshore and onshore EPC, particularly for the engineering design aspect of these activities. We are comfortable with the international standards of oil and gas infrastructure, even those beyond the upstream segment. The American Petroleum Institute recognizes us in this regard. We develop our patents and technologies. We can also participate in projects such as the Dos Bocas refinery. For the past 30 years, our experience has focused on mature field and EOR. Nevertheless, we have also diversified our services. We are continuing to develop our product lines as designers. For instance, we recently released a new type of pump for oil well water reinjection. We plan to reassess our work in the industry, but we believe that oil prices have recovered considerably and that gives our business plans a certain degree of stability.

SERTECPET is the first Ecuadorian company to offer integral energy solutions on a global scale. It conducts international research activities to propel scientific and technological developments in the industry.