New Operator Looking to Expand its HorizonWed, 01/20/2016 - 13:16
Iván Sandrea, CEO of Sierra Oil & Gas (Sierra), which is part of the consortium that won two blocks in R1-L01, believes that getting involved right from the beginning was the right decision. Thanks to its robust capital structure, as well as a strong team with a robust technical background, the company is determined to play a growing role in the industry. “Going forward, Sierra will continue to consolidate its status as pioneer and first-mover in Mexico within different spaces of the oil and gas value chain,” Sandrea asserts. CNH estimates that the consortium should eventually reach a production level of 23,600b/d in its Round One blocks. “We certainly intend to comply with the pre-established conditions of the contract and the timetable to the letter,” Sandrea voices. “In fact, the data that we have collected so far provides us with a positive view of the future.” Nonetheless, he mentions that it is important to remember that the consortium’s blocks are unique in that they are exploration blocks, which means that before any talk about production can be had, there needs to be drilling, findings, and an accurate assessment of the volume of the reserves.
Only then does Sandrea believe the group can make announcements about the precise production rates that it deems viable and intends to pursue. “Compared to the estimates based on indirect seismic data, the figure could be significantly revised upward or downward, depending on the findings from our exploratory efforts,” he explains.
Sierra is continuously evaluating a range of opportunities, not just through the bidding rounds. “We did not participate in R1-L03, but we will be looking at farmouts for R1-04 and R1-L05, should the latter go ahead,” the CEO divulges. Looking further into the future, the company believes it could potentially seize opportunities in R2-L01 and R2-L02. In other words, Sierra is certainly not planning on having Blocks 2 and 7 remain its sole assets in Mexico. When looking five years into the future, Sandrea envisions Sierra consolidating its position as a respected investor and operator in Mexico. “We want to become a partner of choice with a growing, high quality local portfolio, and to be acknowledged as a firm that excels in terms of its technical and managerial capabilities,” he adds. The company would like to have between 200-300 million boe of net reserves in projects in the development, exploration, and production stages, as well as select high quality midstream assets. In the long-term, the CEO expects his company to develop at least two flagship upstream projects that generate a significant amount of value, and are instrumental in increasing the country’s oil production. Sierra would also like to contribute to modernizing and expanding Mexico’s midstream infrastructure. “In other words, we want to be a posterchild, a case study of what responsible success looks like for the newly opened Mexican oil and gas market,” Sandrea sums up.