Innovative Insights for Heightened Well ProductionTue, 01/21/2020 - 20:03
The tighter budgets most oil companies were forced into as a result of the industry downturn are now staples of business, despite the steadied market. While this has caused problems for companies across the value chain, for Houston-based engineering company Control Flow, the budgetary dilemma offered a business opportunity, says Ernesto Sánchez de Tagle, Director of Latin America at Control Flow.
Sánchez de Tagle says that the combination of industrywide budget restrictions and the liberalization of the Mexican oil industry set in motion by the Energy Reform created an opening in the safety market that Control Flow was placed to take advantage of. “We saw that not all new operators entering Mexico had a couple million dollars to spare upfront to finance a new blow out preventors BOP, which is a vital safety component required by industry regulations. In response, we created a solid, customer-focused rental model for both Mexican and international operators.”
Control Flow specializes in the manufacture, rental and servicing of vital safety equipment on drilling rigs. Its pressure control group focuses on well heads, manifolds and BOPs. The company’s products, found worldwide, are concentrated on the onshore fields of central Texas, the Middle East and offshore platforms on the Mexican side of the Gulf of Mexico.
The rental model in Mexico, which began as a pilot and soon expanded, has allowed local operators to meet their safety needs without having to spend a chunk of budget. Renting also means that the equipment can be repaired or replaced should any malfunction or breakage occur.
Sánchez de Tagle explains: “Operators like our model because it helps them reduce their capital requirements in the short term. When they choose to rent, the BOP becomes a fully tax-deductible operational expense, not just a depreciation.” The company is uniquely positioned to provide BOP rental to both the US and Mexican markets, Sánchez de Tagle adds. From its perfectly-located production plant in Houston and a service and repair center in Cunduacan, Tabasco, Control Flow can manufacture its own equipment and repair rental equipment on quick turnaround time for operators in the Mexican Gulf. “Control Flow guarantees that every rental BOP is inspected and refurbished to a like-new condition. As the manufacturer of our own BOPs, we understand their specifications like no other equipment rental company and our customers can be assured that they will work 100 percent of the time,” he says.
As drilling operations in Mexico increase and the race to first oil gets underway, Control Flow has seen another opportunity emerge. In a follow-up move to becoming one of two companies in Mexico to be given the API Q2 Standard certification (quality of service) for servicing BOP equipment, Sánchez de Tagle says Control Flow will now move into recertification and repair of compatible safety equipment of other major brands. “In Mexico, we are carrying out the inspection, maintenance and certification of customers’ BOPs. Not counting other OEMs, we are the only rental/service company with its engineering package backed by an API manufacturer certification. Our own BOPs are similar to those of the major players, so our parts are totally exchangeable with most major BOP models,” he says.
In delivering its repair work, after its rigorous inspection process, Control Flow has discovered that many of Mexico’s older BOPs no longer meet the API’s material requirements. Sánchez de Tagle says the company is not prepared to risk working with this equipment: “As we cannot be sure how much stress the BOP has been under during its years of service that may reflect on material resilience. As a result of this and an inadequate storage, maintenance and service record, extremely deteriorated equipment has come to our shop. This is dangerous and we will not gamble with the safety of personnel or assets. In these cases, we tell our clients that they should scrap this BOP because we cannot certify it.”
While around 10 percent of Mexico’s offshore platforms use Control Flow well heads, with thousands more installed at oil fields internationally, Control Flow’s BOP market share is increasing. To continue the success of its rental model, Control Flow will be focusing on greater penetration into the market to attract other major players.