Picking up the Deepwater ThreadSun, 06/03/2018 - 08:37
Q: What opportunities does Noble see in Mexico’s oil and gas exploration segment and what advantage do you offer?
A: We have a long history in Mexico. We believe we understand the market, having operated one of the first deepwater rigs in Mexico prior to the Energy Reform. At the height of our activity, we had 13 jackup rigs in Mexico which at the time, represented 80 percent of PEMEX’s work requirements. We are obviously very proud of that and had a great relationship with the NOC.
I believe Round 2.4 yielded very promising results and many of the clients we work for won significant blocks in the licensing round. This is positive for us as we know Mexico and its operating infrastructure very well. There are some green shoots appearing here and there, with current bid activity up, but we view the recent lease sales as opportunities we are excited about. When we worked in Mexico we did so with very limited expatriate crews and large Mexican national crews and we gained many loyal Mexican employees during that time.
The Noble Advanced Training Center takes our training capability to a different level. With the technology we have there, as well as our skilled instructors, we are able to train and prepare large numbers of employees for key roles on our rigs. Additionally, many customers have been using the facility to run DWOS (Drilling While On Simulator) drills, which significantly improves their start-up operations and continued drilling operations. We believe this center provides us an advantage in being able to train people in the Noble way and to our standards.
Q: Given that all these changes have happened quite quickly, what is your forecast for the industry over the next 10-15 years?
A: I have asked several of our customers that were active in the last deepwater licensing round what their plans are in terms of timing and I must admit that it was much more aggressive than what I was expecting, which is very good news. Hopefully, we will begin to see real activity in the Mexican sector of the Gulf by next year, although it could take longer. But regardless, we are very excited and optimistic about the timing and about working in Mexico again.
Q: What cyclical challenges does the offshore rig business face?
A: Currently, we are dealing with an oversupply of rigs. With the aging rig fleet that many companies had, we all started building new rigs in the US$100/b environment and we now have excess capacity. For the first time in a long time, we are seeing some discipline among the drilling contractors in retiring older assets but we still have a long way to go in that area. Since the spinoff of Paragon Offshore, we have retired seven assets we did not feel were going to be competitive, although they are still perfectly capable of drilling successfully. I think it will take some time before we add a significant number of rigs to our fleet because we need some balance to come back into the marketplace.
Q: What sets Noble apart, versus other rig suppliers?
A: We believe several things set us apart but first and foremost, our employees and the culture that they create in our company. We have many long-tenured employees on the Noble team and they carry that culture to the new employees we hire on the rig and pass it down. When you go on a Noble rig, it truly is different from that of other contractors and even our customers communicate this to us in a positive manner. Our employees understand what Noble expects and they also well understand what our customers expect and they deliver excellent results. We have worked hard to transform our fleet into a young, highly technical fleet of drilling assets but without qualified employees on those assets, they are just like any other drilling rigs. We have customers asking for certain rigs by name because of the reputation those rigs have, not because of the quality of the drilling rig, but because of the crews. This is what sets us apart.