News Article

R1-L04: Transforming Deepwater Ambitions

Thu, 06/16/2016 - 12:46

Moderator: Ernesto Marcos Giacoman, President of Amespac
Panelist: Salvador Ayala, Vice President of Marketing, Sales & Technology of Schlumberger
Panelist: William Waggoner, President and CEO of Mexico Petroleum Company
Panelist: Mike Martínez, VP Business Development OPF of Wood Group
Panelist: Marco Osorio Bonilla, Director of Product Technology at the Mexican Petroleum Institute (IMP)

Foreign companies need to identify local resources they can use and those that must be brought in from abroad to ensure the development of a healthy supply chain, given the national content requirements enforced by law, a panel of leading experts told the Mexico Oil & Gas Summit 2016 in Mexico City.

Local suppliers and services companies need to reach out to the private operators that want to dabble in the Mexican market, says William Waggoner, President and CEO of Mexico Petroleum Company. They need to advertise their capabilities. Even though foreign companies might be tempted to use their own capabilities and existing international supply chains, they are also willing to work with Mexican suppliers and service providers.

Mike Martínez, VP Business Development OPF of Wood Group, said his company has been working with local operators. In his opinion, these opportunities have evolved not only as work relationships but also as relationships of trust. In the case of Wood Group, it decided to create a joint venture with a local company to have the best of both working cultures. “Local talent has been key to the growth of Wood Group,” he said during the panel, Critical Success Factors for a Healthy Supply Chain, moderated by Ernesto Marcos Giacoman, President of Amespac.

For a company such as Schlumberger, its VP of Marketing, Sales and Technology, Salvador Ayala, said that service supply in Mexico is quite well-established in terms of accessibility and logistics capabilities. Due to the geographical proximity of Mexico to the US, it is relatively easy for suppliers on the other side of the border to establish operations in Mexico since they are in their comfort zone. He added that the Energy Reform would provide important business opportunities for small suppliers.

Marco Osorio Bonilla, Director of Product Technology at the Mexican Petroleum Institute (IMP), said that communication and openness between operators and technology focused companies is needed because working as a team is important for the industry. Osorio said IMP must have a balanced project portfolio with research focused on industry needs. It also needs to push for the certification of suppliers as a way to provide private companies security regarding their investments.

The industry’s drive to reduce costs is also having an impact on how companies do business. Martínez said that Wood Group had to reduce its engineering costs by 50 percent. The cost-reduction mandate led it to create an innovation team that is in charge of reinventing procedures to make them more cost-effective. Standardization, he said, has played an important role in this process, while emphasizing that the Energy Reform in Mexico needed to also be a technological reform. The industry here needs a shift in its production mindset, he said. Local companies need to come up with new industry standards that reduce costs but that produce safety and quality.

Schlumberger’s Ayala added that until oil prices return to previous levels, companies need to get creative. Mexico has done a lot in a very short period of time and companies such as Schlumberger are very optimistic regarding the opportunities that are arising, he said.

The panel also turned its attention to the actions that IMP can perform to maintain the technological capacity that is often lost when crises such as the current one arise. Bonilla mentioned that IMP has had to incorporate different strategies that are needed to avoid losing technological capacities. These strategies are based on taking advantage of fiscal incentives and developing research aimed at solving short-term problems. He added that IMP is changing its working scheme and is ready to work with national and international companies and not just PEMEX. 

Waggoner encouraged Pemex to participate in joint ventures with private companies for deepwater exploration. He said that if the oil and gas expansion is going to take place PEMEX needs to look for opportunities in other types of ventures. When asked what else could be done by the Mexican authorities to improve the industry, Waggoner said that human capital needs to be prepared to face the industry challenges.