Long-Term Vision Pays OffFri, 02/16/2018 - 10:17
As the Energy Reform was put in place, many companies were caught unawares by the new CNH requirements, such as making the API-Q2 Standard a good practice certification for flow control equipment. Companies that were ready, are already ahead, says Raúl Cullingford, General Manager of Control Flow. “Control Flow is the only company in Mexico with API-Q2 certification for Blow Out Preventers (BOP),” he says. “If a competitor decides to get API-Q2 certified, it will take that company 12 to 18 months to achieve it, with all the effort, capital and time involved. This is a clear advantage we now have.”
Control Flow, based in Houston, is an engineering company with over 40 years of experience producing and providing services for pipeline products in the oil and gas industry and BOPs are critical equipment for drilling operations as they directly ensure security. “It is an element that no one wants to activate, but that has to be 100 percent functional and ready to go to prevent a catastrophe from happening,” says Cullingford. While the advantages of having the certification are clear now, the company’s road to offering API-Q2-certified service for BOPs was not easy, Cullingford says. “In 2013, Control Flow ventured into a five-year project with the objective of becoming the No. 1 control flow service provider in the region,” he says. “Such a project meant the pursuit of the API-Q2 certification for our control flow equipment and service was essential.” But as international oil prices dropped and activities almost stopped, Control Flow was placed, together with almost all other companies in the industry, in a tight position. “As our contract for BOPs with PEMEX all but halted, we faced a hard decision: either continue with the investment or pull out and enter into survival mode,” he says.
The company made the fortuitous decision to continue with the project and, although it struggled with debt, it is quickly getting back on track, and with greater loyalty from the NOC. “Our first and most important goal to achieve in 2018 is to reach financial stability,” Cullingford says. Achieving such a goal should be easier as the companies’ activities are now starting to ramp up in the southern region of Mexico. “We are almost at 110 percent capacity and our BOP stock can barely keep up with PEMEX’s requirements because our contract with the NOC was renewed until June 2018,” he says. “We are one of the only available contract options to meet PEMEX’s BOP requirements.”
Despite having its hands full with PEMEX’s activities, Cullingford wants to reach more companies that are coming into the country and to which, beyond the API-Q2 certification, Control Flow can offer an extra benefit. CNH requires operators to use a certain amount of local content to boost the national economy. Control Flow, being a Mexican company with Mexican staff, can help these companies reach their local content requirements while at the same time providing cutting-edge technology. “For many years, the Mexican industry was dependent on sourcing its most critical equipment from the US, as well as repairing it there,” he says. “We are working to change that.”
Beyond complying with regulation, Cullingford says the clear advantages of having a local, certified supplier of equipment is the reduction in downtime caused by exporting parts for repair. “Time is among the most critical factors for optimizing an oil operation,” he says. “If a part breaks down on a rig, the operating company needs to have the spare part and the service provider in the nearest location because every minute of operations lost can represent thousands of dollars.”
Happy with what has been achieved, Cullingford says that Control Flow is now betting on a new project. “In 2018, we will start working to obtain API-16A and API-16AR certifications for reparation and re-manufacturing of BOPs at the Cunduacan facility,” he says.