Financial Discipline, Service the Recipe for Success

Q: How has the overhaul of Weatherford’s global business strategy impacted your work in Mexico?

A: The changes in our global strategy have also been reflected in Mexico. We have taken all the necessary operational steps to pave the way for consistent financial and operational performance. After difficult years of internal financial discipline and re-engineering our field execution workflows, in 2016 Weatherford achieved the best safety record in the company’s history, and measurably improved our service quality and performance. Our Mexico team was part of this collective success. We remain fully committed and focused going forward and our priorities remain intact. Our customers, our financial discipline and consistent service quality in the field will be our recipe for success when partnering with customers on their different projects in Mexico.

Q: How is Weatherford repositioning itself to increase competitiveness at a difficult time for the industry?

A: The drop in oil prices was a shock for the whole industry and has affected Weatherford as much as any other player. The downturn was worse than anyone could have predicted. We have adapted our processes accordingly and are working with PEMEX and other operators to find the best ways to meet the challenges of the industry’s new landscape. Although the lower level of activity has led us to reduce personnel and implement new strategies, we are still investing in training our staff and maintaining our facilities. We are definitely more focused on providing high-quality services to customers and on developing our employees’ skills to achieve this goal.

Q: What opportunities does Weatherford Mexico have in its sights in the coming years?

A: The biggest opportunities we anticipate will be in unconventional and offshore operations and we are preparing our structure for these projects now. We are establishing Weatherford as a partner for the majority of our customers in the country, helping them optimize their processes and making them realize our company is one of their best options for their reservoirs in the short and medium terms.

Q: Weatherford Mexico has worked solely with PEMEX. How will it deal with new, possibly international clients?

A: Mexico is presenting attractive investment opportunities for companies looking to develop the vast hydrocarbon resources in the short and medium term in practically all operating environments. Weatherford is prepared to continue to expand and to adapt our services to those potential customers in their selected fields. It is important to note that significant experience has been gained after almost four decades of operations in the country, not only for PEMEX but also for international customers. The level of technological development, integration and overall operational complexity have evolved significantly and we are ready to provide this knowledge and to put it into action in offshore and deepwater operations in the country.

Q: How will Weatherford remain cost-effective while improving quality and safety?

A: This is not an easy feat. The key is integration, with many product lines working together on the same project, so production time is reduced and processes improved. This method is not only advantageous for the client but also useful for building Weatherford’s reputation as a provider of high-quality, efficient services.

A great way of optimizing costs is providing our personnel with high-quality training. Customers like to see real talent in the employees we send from Weatherford. By paying more attention to the quality of our services the chance for errors is greatly reduced. Avoiding service failures is vital to preventing subsequent costs and the negative impact on customers. Weatherford understands the importance of a proactive approach toward safety and training. The cost of investing in these areas pays off because we avoid mistakes that could result in more expenses later. In fact, we were pleased to receive PEMEX’s Safety, Health and Environmental Protection recognition thanks to our zero accidents rate throughout all our operations in Mexico in 2016.

Q: How can Weatherford’s special focus on safety help PEMEX and new operators in Mexico?

A: As Weatherford has transformed into a more mature company, our safety standards have likewise grown. We hire high-level specialists with a lot of knowledge and experience in oil and gas safety, making Weatherford a leader in this area not only in Mexico but in most of the countries where we operate. Our statistics reflect these improvements. Our standards, procedures and regulations are vital in achieving these advances. For us the motto is not “safety first,” but “safety always.”

Q: Why should potential customers choose Weatherford over other oil service companies?

A: Weatherford has more than 40 years of experience in the Mexican oil and gas industry, originally as a well construction company and now as a fully integrated service provider. We have an impressive level of experience in many product lines in Mexico and also a high level of responsiveness to our customers. In Mexico, our successful projects in the past were in unconventional fields, in Chicontepec and Terciario in the south, and now we are breaking records in offshore operations. IOCs and PEMEX are aware of Weatherford’s presence in Mexico, our price competitiveness and service quality.

Q: After Chicontepec, which projects best demonstrate the company’s capabilities as an oil service provider?

A: The Chicontepec project was a positive experience for both Weatherford and PEMEX. For us it served as a basis for subsequent growth in other parts of the country. It used to be our main project and was also the best known but it was not our only area of operations. We also had projects in Burgos and Villahermosa. Our main strengths lie in the offshore and unconventional areas where we continue improving our capabilities. We are actively upgrading our offshore operations, so we are well positioned to service PEMEX and other incoming companies in this area. We are also very interested in working with the winners of onshore blocks from Round 1.2 and are approaching them to promote Weatherford’s capabilities.

Q: What role will PEMEX play in Weatherford’s future?

A: The reality is that the budget cuts instigated by the Mexican government will affect PEMEX and have a chain effect on its production activity so it is looking for new ways to avoid decreases in production. We will have extra work coming from the private sector, resulting from increased activity from IOCs and national oil companies. Also, Weatherford is the main services provider for many of the companies involved in CIEPs and COPFs contract migrations.

Regarding oil prices, there is little certainty in the industry on what the future holds. However, popular opinion among CEOs and economists is that the price will recover slightly in the second half of 2017. If that happens, we can expect to see increased activity in 2018.

Q: What are your goals for 2017 and how will you reach them? 

A: Weatherford Mexico is in constant communication with the global corporate branch of the company. The main drivers will be service quality, the competence of our staff and forming partnerships with operators working in Mexico. We are especially focused on the last goal and we are working on building relationships with new private operators. Weatherford reacted very quickly to the changes in the Mexican oil and gas market, adapting the company through internal restructuring. We refocused our attention on our product lines, technical sales staff and highly trained staff in marketing, sales and business strategy. These changes have been made to cover the requirements of the industry at the moment.

Our presence in Mexico is for the long run and we base our decisions in the country with that perspective in mind Mexico is a country that depends heavily on the oil and gas industry. Revenue from oil is vital for the economy’s stability and this will continue to be true. The Energy Reform was enacted at the right time and is attracting investors to the country so more opportunities will be available for all of us.