Ignacio Ficili
General Manager
TrueBlackOil
/
View from the Top

Onshore Cost Lifting Services

Wed, 01/20/2016 - 12:56

Q: What are TrueBlackOil’s main activities in the Mexican market, and what main challenges are you facing in a time of low oil prices?

A: TrueBlackOil is entirely focused on the onshore market in Mexico, with our main focus on lifting cost management. While a company would usually have to deal with at least 40 different suppliers, manage them, and supervise the field, at TrueBlackOil, we are capable of managing everything in an integrated manner, saving our clients time and money. At the moment, we are about to form alliances with four major companies, one of which is listed on the NYSE, and the three others are international players. We provide four service-lines: Operation & Maintenance, Waterflooding Management, Technical and Business Consultancy, and Onshore Rig Brokerage. Operations and maintenance represent between 85-90% of an onshore company’s OPEX. We focus on helping our customer operate and maintain the field, meaning we provide them with surface oilfield services by providing technological innovations, workers, vans, trucks, and chemicals.

Q: What exactly does your waterflooding technology consist of, and what are the advantages of using this over secondary recovery chemicals or injecting gas?

A: Water injection is a process that increases the reservoir recovery factor. Water is injected into the well, to increase the reservoir pressure to its initial level and maintain it near that pressure. This is a complex task, where well geology, mobility ratios, reservoir pressure, and facilities characteristics play a key role in efficiency. TrueBlackOil, in association with an international company, provides clients with the engineering of the injection well’s design and with the necessary equipment to carry out that installation, such as mandrels, valves, and packers.

Nowadays, water injection is part of assisted recovery. It is important to note that not all reservoirs have the same reactions to water, and at times it may be preferable to provide stimulation with organic chemicals or even steam. Waterflooding is a cost-efficient, reliable process in many countries and can easily be implemented in Mexico. For the kind of reserves we have, water injection is one of the cheapest options in terms of cost per barrel, and one of the advantages of this method is the product management. The water injected in the well can be reused once it is properly treated, as the process does not call for potable water.

Q: How does the lower-than-expected participation in R1-L01 impact your brokerage activity, and what is your prediction for participation in the third phase?

A: I have mixed feelings concerning R1-L01, since the awarding of blocks shows the reform is working, whereas the process was slow and the contract terms needed to be more competitive on an international level. A positive aspect is that CNH is already addressing this issue and attempting tomaketheprocedureeasierandthetermsmoreefficient. Concerning R1-L03, the blocks may be difficult for operators to manage since there are a variety of environmental and social costs required, as many of them are populated, and a serious cost-planning structure and cost efficiency in the evaluation and development phase is required. Large IOCs might not be interested by this tender process.

Q: How do you plan on developing your onshore rig brokerage division, and what is your strategy to gain contracts with existing and new players in the market?

A: We are already closing contracts with all rig contractor companies in Mexico through a partnership with another local company. Most of the contractors have agreed to put most of their rigs in our system. We will provide an easy connection between supply and demand but, unless our clients request it, we will not undertake the negotiations for them. TrueBlackOil believes that, to become an important part of the Mexican oil and gas market, it is essential for international companies to associate with local companies. Although the market players may change, opening an oil and gas business in countries with a more mature sector is simple because the industry is consolidated. In Mexico, however, the players are changing. This is why we believe companies would feel more comfortable entrusting business to a local player that understands what is happening in Mexico at the moment. Our main aim for the two next years is to show the market that we are managing our clients’ lifting cost in an efficient, reliable, and sustainable way.