Tony Solis
Vice President International Sales and Operations
TSC Offshore Group
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View from the Top

Paths of Success for Drilling Contractors

Wed, 01/20/2016 - 11:51

Q: How has TSC Offshore negotiated its goals with the realities of the downturn and their effect in the drilling market?

A: We have met our objectives in terms of growth in our market share and visibility. Although during the past year the price of oil has dropped drastically, we have been able to overcome that obstacle. We have succeeded in getting the TSC brand recognized and accepted by most of drilling contractors, including PEMEX. We had plans for expanding workforce and preparing ourselves for a couple of projects that we had in our sights. However, due to the drop in oil prices, we had to put those plans on hold. It is true that we have been affected tremendously by the drop in the oil price. Since we depend highly on drilling operations, our business suffers an immediate impact when these activities slow down. When we detect a lag in business, which we can anticipate, we start looking for ways to reduce our costs. The type of necessary efficiencies can be mostly found in transportation and logistics, so we start looking for ways to consolidate shipments. This keeps our costs down and helps in passing on our savings to our clients.

Q: How has your client base changed recently, and what are some of the most important aspects of your services that you highlight to new clients?

A: Because of the downturn, we have not seen any new drilling contractors entering the Mexican market, or at least none that we are aware of. Our most important clients continue to be the main drilling contractors, specifically CP Latina, Oro Negro, Seadrill, and Perforadora Mexico, among others. We also do quite well with a couple of service companies that have maintenance contracts with PEMEX. TSC Offshore has helped them reduce their operating costs by offering products with the benefit of superior quality, compared to what they have been offered, at a much lower cost.

We are also offering new services, such as the new TSC app which gives access to an array of information. This can be done from any smartphone or tablet device. The application allows users to find TSC’s full range of products, news, presentations, and more. Customers can easily see the solutions we offer, and we can tailor those to fit any customer’s needs.

Q: How have you advanced with PEMEX's US$63 million contract to carry out refurbishment works, mechanizations, and automation on several 2000 HP land rigs?

A: We were hired to serve four land rigs. The work for each rig is planned to be developed into four main phases: surveys, purchases, performing the work on the rig, which includes refurbishment, modernization, automation, and postdelivery services. At this point, we have finished the survey phase for two of the four rigs. Due to the market conditions, the project has suffered a tremendous impact in terms of following the schedule. However, PEMEX has been clear in its desire to maintain this project in its priority portfolio.

When this project is completed, it will enable PEMEX to add modernized rigs to its current land drilling rig fleet. These modernized rigs will be more efficient, which in turn will allow PEMEX to drill wells quicker without putting safety at risk. We will continue to work closely with PEMEX, and we hope to secure other contracts in the near future. This contract has a central effect on PEMEX’s operations, as the NOC has 21 rigs operating in the same conditions as the four rigs awarded in our contract. Therefore, investing in its fleet and acquiring state-of-the-art technology will help PEMEX improve its operational efficiency substantially, while also having a tremendous impact on its QHSE variables.

Q: What are your main objectives for 2016, and what upcoming projects do you have in the pipeline?

A: One of our main objectives is to survive the difficult environment that we are all seeing in the oil and gas market. We are looking to bring a new product to market, for which we have high expectations. We are starting to see some activity with it in the US and will soon be marketing it in Mexico and all of Latin America. We remain optimistic about the market in Mexico, as we know it will gain momentum, and when it does, we will be ready to act immediately. We will continue to proactively promote TSC and its product and service offerings to all our current and potential customers.