John Padilla
Managing Director
IPD Latin America
/
View from the Top

Real-time Risk Monitoring to Boost Production

By Peter Appleby | Sat, 12/21/2019 - 09:00

Q: What are the key services that IPD Latin America has delivered to oil players in Mexico in the last two years and what sets the company apart?

A: IPD Latin America is a boutique energy consultancy celebrating 20 years in the region. We offer strategic advisory services, syndicated research and detailed market studies. We focus on sector-related political, economic and financial analysis and specialize in government relations, legal and regulatory assessment. IPD’s senior consultants have an average of 30 years each of energy sector experience. Our long-standing, uninterrupted presence in the region allows for unparalleled local insight, context and granularity. Our clients value the objectivity and accuracy that comes with our tactical understanding of the industry and the integrity of our ethically-sourced intelligence and data. In response to the 2013 Energy Reform, we expanded our suite of products, customizing an online upstream regulatory platform to facilitate the navigation of Mexico’s extensive and taxing regulatory framework. To help our clients maintain compliance in a fast-moving and complex regulatory environment, we teamed up with the law firm Goodrich, Riquelme y Asociados to construct this platform as part of a broader comprehensive support service. After mapping out Mexico’s entire regulatory framework as it applies to E&P contracts, we had programmers build this platform from the ground up. This bespoke management tool gives our clients a unique advantage, saving on unnecessary penalties and fines, and improving their reputation for stringent compliance. IPD’s Key Stakeholder Map (KSM), which we refined over the past 20 years, is a second product that is proving highly valuable post-reform. The new administration has brought in numerous government officials and politicians who are not well-known to the private sector, and interaction to date has been limited. Understanding the new dynamics and individuals, as well as developing effective approaches to key officials at both a national and local level, has never been more important. Identifying alliances and conflicts can save a company valuable time. We have converted this longstanding  KSM service to an online platform that offers full customization, is systematically updated, and can be accessed via smartphone or computer. With market participants actively seeking engagement strategies with the new government and the strong possibility of more changes ahead, the KSM provides valuable insights, saves time and is a powerful tool to address the challenges companies across the board are grappling with in today’s complex energy market.

Q: How concerned is IPD Latin America about the future of Mexico’s oil and gas industry?

A: The long-term outlook for Mexico’s oil and gas sector is extremely positive based on the major discoveries that have been made by private sector companies over the past couple of years. Nonetheless, the short to medium-term outlook, depending on policy decisions made, is rocky. Oil production has fallen steadily since Cantarell peaked and no administration has properly planned for a post-Cantarell/Ku-Maloob-Zaap world. We fundamentally believe that oil production will continue to decline in the short term, despite the government’s accelerated and mature field development plans. While modern day PEMEX was constructed to manage mega oil fields, Mexico’s future will require increased nimbleness to manage a much larger number of smaller fields. We forecast private sector oil production to account for over 300Mb/d by the end of President López Obrador’s term based on discoveries made to date, provided that smooth permitting procedures and a healthy oil and gas ecosystem where PEMEX provides unencumbered access to its infrastructure are in place. That number could rise as more companies start their exploration drilling campaigns. A significant injection of technology, cooperation and leveraging of know-how are needed to improve Mexico’s standing. And it is important to keep in mind that the country continues to actively compete for global investment dollars, including those within the region such as the Permian (U.S.), Guyana, Argentina and deepwater Brazil.

 

IPD Latin America is a regionally-focused consultancy that offers tailored services to both private and public entities. The company focuses on leveraging on-the-ground insight and analysis with global perspective for actionable decision-making.

Peter Appleby Peter Appleby Journalist and Industry Analyst