Edgar Rangel

Perspective on the Development Division

Tue, 01/22/2013 - 11:58

It was late, but not too late to realize that Pemex needed to create a specific division for field development. This division must evaluate if the discovery is commercially viable, explore options to minimize development costs, and plan to optimize production through the best available technology.

Lakatch, Tsimin-Xux, and Ayatsil are fields for which the development plan is being processed in this more modern way. It is a very necessary step: Pemex needs to focus on development, before going to production mode. Before, the prevailing mindset was finding the easiest way to connect the well to production infrastructure, without planning to optimize production throughout the field’s lifecycle.

This clear division of roles has also made the exploration division stronger: their projects now have their own budget. In the past, this division would drill wells and before they had a chance to analyze them, the production division would push to start working on them. Since it was easy oil, it was all about ‘just emptying the tank’. But times have changed and this era is over.

The challenge now is to grant the development division sufficient independence to ensure that its efforts materialize in successful projects rather than disappear into swollen binders. It is also a matter of shifting Pemex’s cultural mindset; many field experts have been there for decades, know their reservoirs very well, and are reluctant to incorporate external advise. It is a culture that has to evolve; otherwise we will keep doing the same thing, over and over again.