Sergio Rivas-Farias
Country Manager Mexico Office
View from the Top

Norwegian Companies Prepare to Pounce on Mexico

Wed, 01/21/2015 - 15:38

Q: What is INTSOK’s perspective on the Energy Reform and the opportunities it has created for Norwegian companies?

A: At INTSOK, we are very optimistic as we have been working closely with the authorities regarding opportunities in Mexico. We do not tell any Norwegian company what it should do, we only present our experience. We have been working with Mexico for 14 years, inviting companies and organizing workshops in Mexico and Norway alike. Under the current administration, we have presented two annual seminars, with the first being to explain to the Mexican market how the Norwegian model was implemented. When we saw that the Energy Reform had been approved, we were very optimistic about the idea that Mexico was finally following international best practices.

At least 15 Norwegian companies were established in Mexico before the Energy Reform and 40 more are now looking to enter the Mexican market. Aside from Statoil, the Norwegian oil company, around 300 companies are part of INTSOK, with most being suppliers. These companies could do business with PEMEX, but they may prefer to negotiate with international companies to have freer agreements. Following the Energy Reform, our members have higher expectations that Mexico’s commercial practices will be aligned with international models. The new local production target of 4 million b/d is excellent news for Norwegian companies that can provide pipelines, platforms, or many other types of technology. On the technology side, our companies can also help Mexico raise its recovery factor. In Mexico, on average, the recovery factor stands at an average of 22-24%, as opposed to 60% in Norway. This is because Norwegian companies deploy many technologies that help to raise this total little by little.

Q: What should happen in Round One to increase the attention of Norwegian companies?

A: Statoil is already participating in Mexico, and even if Statoil was not here, our suppliers would come to work with the likes of Shell and BP. Although our suppliers are still focused on Statoil’s business, making it technologically advanced, they will naturally extend their services to other companies as well. We are also targeting the increased involvement of Norwegian companies and creating opportunities for Mexican companies overseas with our International Energy Project in Mexico. We want to show local companies how they can grow to participate in the global market through cooperation with Norwegian companies. Right now, Norwegian companies are looking for partners in Mexico and local companies are looking to expand to the outside market.

Q: Do you envision a situation where Norwegian suppliers could work with PEMEX?

A: The main area where Norwegian companies can contribute is technology. Several already have successful track records in Mexico, such as Fishbones, a small drilling technology provider that began working with Statoil and is now dealing with PEMEX. Another example is Wärtsilä, a Finnish company that has been in Mexico for many years and which acquired Hamworthy, a Norwegian company. Hamworthy has offered two main technologies to the Mexican market. The first is focused on separating oil from water and the second one works towards reaching zero flaring. Hamworthy is currently in negotiations to establish an agreement related to zero gas flaring with PEMEX. Norwegian companies are always focused on how to increase the recovery factor, which is one of this industry’s prime directives.

Q: What role does INTSOK aspire to play in the development of the Mexican oil and gas industry?

A: Our most important contribution is to bring our best technology and knowledge through our partners. We have organized many seminars on integrity, safety, and prevention, so we have brought in companies to show the necessary technology to achieve the best results in these areas. Our objective is to present the most advanced inovations in the industry and facilitate access to this technology for Mexican companies. We currently have 40 companies interested in Mexico that want to make sure PEMEX receives all the information it needs. Mexico is a really promising market and we are absolutely satisfied with what has been done by the current administration.