Julio Loreto
Former Country Manager
View from the Top

Planning the Most Efficient Route to Success

Tue, 01/21/2020 - 19:32

Q: What were the critical factors behind Weatherford’s turnaround in Mexico?

A: The turnaround began in September 2017, when the company decided to reduce layers of management. This also involved an optimization of the structure. We changed our company culture, a process that is still undergoing. All of this enabled us to set up a business model that took advantage of the opportunity that was put in front of us. Mexico was opened up by the Energy Reform and PEMEX is hungry to demonstrate that it can compete. Healthy competition between contractors was created and service companies like us are here to help. We can take advantage because we have the right structure, the know-how and experience drilling around 3,000 wells in Mexico.

Q: How do you manage the direction of the company to deliver success?

A: We are fostering a cultural change that focuses on efficiency and ensuring our employees make the right choices. We have asked ourselves whether we should focus on the bottom line or on all of the contributing factors that get us there. We chose to look at the processes to find out how to make our procurement more efficient, improve our inventory management and put the right people in the right places, among many other factors. Our new focus and results-driven service allows us to complete projects more quickly than other major companies, including PEMEX.

Q: What is success for Weatherford?

A: Success is being a world-class organization that functions perfectly and looks great. To me, success for Weatherford means that when clients place an order, they have the assurance that they will get what they need. Whether that is a well drilled or a completions package, we must be at a level of reliability and efficiency that leaves clients in no doubt. Financial performance and economic benefits for employees will be the consequences of getting to this point.

Q: How does Weatherford choose its opportunities?

A: We first understand our pipeline and installed capacity so that we can target contracts in the most efficient fashion. There are areas where we can compete, places we can explore, and others that we should ignore. We look at what we are good at: Managed Pressure Drilling (MDP), Tubular Running (TRS), Drilling Fluids, Cementing Accessories and Integrated Solutions, to name few. Then we start matching opportunities. If we see a perfect match, we check the profitability of the project and go there. Our technology and experience can be the differentiators that make projects viable.

Q: What should other companies know about what Weatherford does in Mexico?

A: Anyone in the oil and gas industry knows Weatherford but they may not know we are in Mexico. We have two centers of excellence in the country, one in Villahermosa (Tabasco) and another in Poza Rica (Veracruz). The center in Poza Rica is set up in a way that allows it to control or support any inland operation. Villahermosa covers the south and offshore.

Q: What are the main changes to your drilling practices over the last five years?

A: We are much more efficient now than we were in the past. We produce more profit for the same activity because we have dramatically decreased our Nonproductive Time (NPT) rates year-on-year. When we decrease our NPT, our projects are completed more quickly but we are still paid lump sums. The greater efficiency of our drilling practices allows us to earn more.

Q: What is in store for Weatherford this year?

A: For this year we are looking to improve our standing in Mexico. The challenge we have is to continue this internal focus and build a healthy organization that can expand or contract in a flexible way, depending on the market. This year’s market, and the Energy Reform, is still evolving. We still do not know if the Reform will be a success but the healthy competition it has brought to Mexico was needed. It will drive PEMEX to improve.

Weatherford is one of the world’s largest oil field services companies and specializes in delivering innovative technologies and solutions to oil and gas producers to meet current and future energy needs.