PEMEX Veteran Takes the Plunge

Q: Why did you choose to found PetroBAL, after almost 40 years working for PEMEX?

A: When I left PEMEX I did not have a clear picture of my next career step. During my mandatory one-year leave of 200 absence I had the opportunity to reflect and consider the various options available to me. Perhaps the most obvious option was academia, followed by setting up my own company or working for someone else. After exploring every choice, I joined Grupo BAL and founded PetroBAL with the support of the group’s strong foundation and performance in Mexico.

Q: What criteria did you use when assembling PetroBAL’s team of oil and gas experts?

A: My first thought when recruiting PetroBAL’s team concerned its size, which I wanted to keep lean. Secondly I considered the setup of the team, finally deciding on a three-tier system consisting of experienced professionals, midrange professionals and younger recruits. To find the experienced professionals, I interviewed PEMEX employees and retirees. Then I looked for people working in other companies to fill the midrange component. Finally, I visited universities to seek out new talent.

Q: What will happen if PEMEX’s production drops to 1.5 million b/d and how would this affect operators?

A: We do not expect such a dramatic drop to occur but if that were to happen, PEMEX will start looking for more investments. They are not investing at the same levels as they were three or four years ago but they are still investing. Costs, prices and rig rates have all fallen but since cost always correlates to price, in the end everything will surely level out and PEMEX will successfully adjust. National oil companies always survive despite financial and market struggles, so in our opinion PEMEX’s outlook remains positive.

Q: What are the main differences between the way PEMEX and PetroBAL operate?

A: There is basically no difference between PEMEX’s and PetroBAL’s project implementation and development. PEMEX has a very structured decision-making process when it comes to assigning resources to different projects and PetroBAL will follow similar procedures.

PEMEX can now participate in partnerships. PetroBAL has complete freedom from the outset to make alliances and partnerships with other companies and this is something we strive to take full advantage of. Associations will allow PetroBAL to diversify risk, grab synergies and complement our existing knowledge.

Additionally, the way in which we negotiate terms with our partners is different from PEMEX’s strategy. As a smaller company we do not have the same capacities as a company as large as PEMEX. Our authorization processes are very much alike, although PetroBAL may have a quicker turnaround time.

Q: What should PetroBAL’s portfolio look like in 2025?

A: Our philosophy and Grupo BAL’s philosophy is to build to stay. By 2025 we want to be producing 50,000b/d and 100,000b/d by 2030. After drilling commences in the areas we won in 2015, we will enter into the development plan phase and this will run into 2018. We will start drilling and building facilities and we will see the first oil in the second half of 2019.

Q: How important are PEMEX’s operational activities for private operators that want to enter the market?

A: PEMEX is a company with production above 2 million barrels a day and is among only a handful of global companies that produce at such a high level. PEMEX has played a huge role in the Mexican economy but also as a global operator.