Juan Manuel Delgado
Director General
Schlumberger Mexico
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View from the Top

An External Look at Pemex’s Development Division

Tue, 01/22/2013 - 11:55

Q: What has been the main recent development in the Mexican market from Schlumberger’s perspective?

A: The biggest change in the market over the last couple of years has been the introduction of the integrated service contracts concept. This has been advantageous both for Pemex, which will eventually be able to use the projects to boost its production figures, and also for the private sector, which will be able to participate a little more in Mexico. This will give an additional volume of work for service companies in the market, both upstream and in terms of transportation infrastructure.

Q: How have the changes in the structure of Pemex E&P affected the way you do business in Mexico?

A: 2012 has been a transition year for the implementation of this new structure, and Pemex is still adjusting internally to these changes. The production assets are now focused on production and the new development division has a chance to prove itself at two upcoming projects, Tsimin-Xux and Ayatsil-Tekel, but the results are yet to be seen as both projects are still in the planning phase. For Schlumberger, this change means splitting our traditional way of working and contracting, since our company used to be contracted by the drilling department for one specific area into the production team, since they used to have a macro perspective. Now, you have a separate division that is planning much more ahead to create the best conditions to develop a field. That is certainly creating openness to innovation. This does not mean that the new structure will facilitate additional flexibility in the industry: we still have to follow all the contracting procedures and follow the rules in place. However, there is one important benefit: the development division will enjoy its independence to focus solely on field development objectives, without being influenced by production objectives or budgetary issues. The success of this division is to be seen in the future: 2013 will be the year for this branch to prove it can expedite contracting execution and facilitate new technology introduction.

Q: Has Schlumberger made internal changes in its organization to match Pemex’s structure in order to better interact with the three divisions that exist today?

A: Yes, definitely. However, we have to be patient, since Pemex is still in the process of finalizing its new administrative processes. This means we will have to wait until everything is more concrete before we set our own processes in stone. We will see what the changes are, how they are going to affect us, and then we will need to adapt very quickly. In the meantime, we are creating areas of focus within the company that are directed specifically to these new processes.

We actually started to shift our own internal organization before the restructuring at Pemex E&P was announced. It is sort of a coincidence that we have an exploration group that is composed of different segments that participate in exploration projects. While some solutions and technologies in our portfolio are used in the exploration phase, they can be applied across the entire value chain. We will not precisely mirror the changes at Pemex, because we have a measure of overlap between the services we offer across our product lines. We prefer to group our services into reservoir characterization, reservoir production, and drilling. There are services within each of these areas that overlap with the different processes involved in exploration, development and production. We do mirror Pemex in their geographic organization; but our service organization is different. We also have individual experts in areas such as reservoir characterization and petrophysics who provide their expertise across a range of different areas. Each of these experts belongs to a technical pool that we draw from whenever necessary to services any of the three subdivisions from Pemex E&P.

Q: What are today the main topics in your discussions with fellow petroleum engineers in important positions in Pemex E&P such Carlos Morales Gil and Antonio Escalera?

A: The passion and the excitement is high among all the subdirectors who have participated actively in the chain of events. We are delighted to be part of their success, and we are here to contribute to further progress at a project that we desire to be successful, not only as a service company, but also as Mexicans and petroleum engineers, geophysicists, and geologists. Our conversations circle around the fact that 2012 has finally proved that everyone who participated in the project was right: we found oil in deepwater and we now have to focus on transforming these discoveries into a production reality. We have proved our expectations to be correct both to the country and the industry. This makes us proud; it is the reward of many years of hard work.