César Vera Méndez
Area Manager
Nabors Industries

Performance-Driven Onshore Drilling

Tue, 01/22/2013 - 15:47

With the decline of Cantarell, the role of drilling companies in Mexico has started to shift onshore, with one of Pemex’s main drilling priorities today being gaining access to heavy oil at mature onshore fields. César Vera Méndez, Country Director of Nabors México, believes the way of getting that production back is through performance-driven contracts for drilling companies at these projects.

“For Nabors, Mexico is the second largest market outside the US, after Saudi Arabia,” Vera Méndez explains. “This stems not only from a turnover perspective, or because of the number of rigs that we currently have in Mexico, but also because of the stability provided to the company from having a secure investment in the country with the high level of commitment that comes with it.”

Nabors is mostly known for its onshore capabilities, and Vera Méndez still believes in the growth potential for this sector, especially now that Pemex has had to look elsewhere to replace the production missing from Cantarell’s decline. “Onshore areas in Mexico have potential both now and for the future. They just need different technical approaches for development.” The approach that he suggests as the most adequate includes an incentive-based component to measure the real added value that drilling companies bring to the operation. “Drilling companies need to be measured on performance, and really provide additional value in terms of optimized drilling times and, thus, earlier production,” Vera Méndez explains. “Nabors can participate in providing true performance that raises the effectiveness of Pemex’s drilling plans. Whenever the opportunity exists to be measured on performance, and provide additional value in terms of shorter drilling times, we are willing to participate with solid technological and operational advantages under high safety standards and performance guidelines.”

For these performance-driven operations, Vera Méndez believes that automated drilling will be of assistance. “It doesn’t mean that drill operators are becoming redundant. The difference lies in that, instead of concentrating on handling the machinery, they will be able to focus on the way the operation takes place and when to intervene.” The technology that Nabors is offering could provide up to 30% savings in drilling time, and also cause less damage to the drill bits. “This would extend the life of the drill bits, and, increase the ROP (rate of penetration), while minimizing the error and maximizing the utilization of the torque drive and the power on the engines,” he explains.

Vera Méndez emphasizes that his company’s rigs have this technology already built in, and it is up to their clients to properly recognize it and utilize it. “Nabors’ precision service can be brought to Mexico immediately. The equipment already has the performance-based tools needed for it. It has certified quality, proper performance, and it is going to get the job done, for a specific market segment that does not necessarily compete head-to-head with the existing service companies.” Nevertheless, he understands that Pemex is a large corporation that has specific processes to follow. “They are going to work as the requirements come up, with a slow-paced progression towards a real cost-benefit scheme based on performance.”

At the same time, the introduction of the integrated service contracts offers new opportunities for drilling companies. Vera Méndez believes that Nabors should be working together with the private sector companies that are now operating in Mexico, in order to develop fields in the most effective way possible. “When I talk about performance, I do not ascribe to trying to compete with other companies to prove what each of us can do – which eventually are variants of the same. Performance refers to working with them, and alongside them, to meet the common objective of developing the fields in question. That way, we can not only provide rigs, but also services such as fracking, cementing, directional drilling, or coiled tubing. We can therefore provide earlier production in a shorter time.” In Vera Méndez’s opinion, this would account for greater benefits for all of the companies, obtaining incentives for doing their work correctly, and better oil production for both Pemex and its new private sector partners.