Rafael Parrilha
Director General
Bureau Veritas
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View from the Top

Potential of TIC in Deepwater Development

Wed, 01/22/2014 - 12:27

Q: What have been the highlights of Bureau Veritas’ shift beyond traditional certification services?

A: Bureau Veritas is a global leader in testing, inspection, and certification (TIC). The firm helps clients meet growing demands in quality, safety, environmental protection, and social responsibility, while it has also been recognized in the Mexican oil and gas industry as a provider of integrated solutions. In addition to traditional certification services, Bureau Veritas intends to be a key partner for PEMEX and newcomers to the country after the Energy Reform, helping them to maximize operating efficiency and minimize risk. This is based on the large international experience it has accumulated over the last 186 years by working in 140 countries. We are also no strangers to Mexico, as Bureau Veritas has been present in this country since 1982.

Q: Which current oil and gas industry trends could drive Bureau Veritas to launch new certification or consulting services?

A: In recent years, Mexico has leaned toward a selfregulated model, where the certification and integrity management of assets has been carried out optionally. Bureau Veritas disapproves of such a model, as it does not comply with the responsibilities oil companies have to the public and to their own corporate interests. It is the duty of the more important global TIC companies to establish a close dialogue with both PEMEX and CNH. The goal of such dialogue would be to establish a new set of regulations suited for Mexico, but enriched with the international experience that these companies have. Mexico offers major potential to implement schemes intended to reduce environmental liabilities, increase energy efficiency, and demonstrate social responsibility. Schemes that link international standards, such as ISO certificates, to national standards and norms will be particularly relevant when positively impacting the performance of companies and communication with stakeholders.

Q: How could asset maintenance and integrity management be used to strengthen PEMEX’s strategy for efficient and safe E&P operations in deepwaters?

A: The management of physical assets – selection, maintenance, inspection, and renewal – plays a key role in the operational performance, safety, and profitability of a given industry. Deterioration processes, such as fatigue cracks and corrosion, will always be present to some extent. The management challenge is to ensure that the integrity of engineered systems, such as offshore structures, vessels, pipelines, and process systems, is maintained throughout their anticipated working life. The objectives of an asset integrity management system are fulfilling business requirements, maximizing returns on assets whilst maintaining stakeholder value, and minimizing business risks associated with accidents and production losses. Establishing an efficient asset integrity management system for deepwater operations is essential for PEMEX, as it will make upstream activities in extreme conditions more feasible.

Q: How can the deepwater regulatory framework serve as a preventive measure to make sure this segment’s development takes place safely in Mexico?

A: The Mexican regulatory framework did not see much progress last year because the Energy Reform was being eagerly awaited. Once the secondary laws and the role of CNH have been confirmed, Bureau Veritas will resume its work and adapt to the new rules and guidelines. As important as the regulatory framework is, it is more important to ensure that companies comply with applicable regulations. If the regulatory framework is too rigid or too shallow, the development of Mexico’s deepwater segment will not take place safely. Therefore, the greatest challenge will be to continuously improve the regulatory framework to maintain a balance that assures safety during exploration and production. The successful creation and implementation of this model requires an open debate involving PEMEX, CNH, oil companies, and TIC firms, which need to ensure compliance with clearly defined regulations.

Q: What impact do you expect the reorganization of PEMEX to have on its ability to develop Mexico’s deepwater resources in a competitive way?

A: The current organization of PEMEX does not allow it to be productive and efficient enough to satisfy national needs and expectations. Its reorganization seems to be based on modern models directed at increasing efficiency and performance. Also, a refocusing of priorities will allow PEMEX to concentrate its efforts to where these can yield optimal results that align with its general strategy. Recent structural changes will give investors and allies more confidence, enabling PEMEX to establish important partnerships with IOCs. This will result in significant technology transfers that are needed to develop the deepwater segment.

Q: Which other opportunities are you planning to pursue in the Mexican oil and gas industry?

A: PEMEX’s existing infrastructure is aging and we have to keep in mind that the conditions of oil and gas assets are different from what was expected during the design and engineering phase. Bureau Veritas can offer complete solutions using its own technical methodologies, software, and inspection techniques that include non-destructive testing (NDT). Therefore, I see room for Bureau Veritas to help PEMEX assess its equipment maintenance or replacement needs, adapt infrastructure to new service conditions, and keep operations within the acceptable risk levels. These are all important economic decisions.