Gaspar Franco
Commissioner
CNH
/
View from the Top

Regulating the Industry´s Fruitful Development

Thu, 05/24/2018 - 12:00

Q: What is your stance on private farmouts and consolidation of alliances for E&P contracts as a result of the licensing rounds?

A: The administration of these contracts involves awarded operators conceding a certain percentage of the control or participation over their contracts. We have a certain guideline for cession and control exchange whereby, if companies win a block, they are entitled to associate with some other company as long as it meets the proper criteria to participate in the project.

Q: How is CNH overcoming internal bottlenecks regarding technical components from your daily activities and operations?

A: CNH has grown exponentially and we have found areas of opportunity that we are trying to cover by training people in the areas that hurt us the most in each department. We conducted a survey in each department to uncover the weaknesses they were experiencing based on their area of expertise. We want to train our people as regulators, not as technical operators.

Additionally, we want to strengthen the mapping of our processes, their implementation and improvement, so we need to increasingly professionalize our staff and have our people ready to face any possible scenario. We also need to accrue our budget independence to work properly and systematize information acquisition and processing to accelerate processes and export experiences much more quickly.

Q: What are some of the practices you would like to see from private players in the industry?

A: First and foremost, I would like to see a true and honest commitment to the country’s development and a genuine alignment to the work taking place for the country’s benefit. If they remain committed this will create jobs, improve onsite performance, foster human capacity development, improve productivity and things will flow naturally for the industry. The long-term interest is to create a strong Mexican industry and we, as regulators, have to do everything we can to optimize the regulations, processes and requirements to achieve that.

Q: What are CNH’s plans for the future and what is your message to those operating in the Mexican oil and gas industry?

A: We have announced the guidelines for secondary and enhanced oil recovery techniques as we expect to see a larger number of operators applying these practices. Mexico has over 1,400 reservoirs in around 700 oil fields and not all of them have enhanced recovery processes. We made this move because we deemed it necessary to enforce the process legally so operators could do it. There are cases in other jurisdictions where some fields have doubled their reserves when they introduced these processes. We want to push operators and service companies to venture into new things, and to try new processes. We want to stay on top of technological developments that allow us to better untap Mexico’s potential. Also, the regulation on exploration and development plans is about to change for the better and it will reduce timing for the approval of these plans.

We are constantly identifying opportunity areas and try to implement the modifications as fast as possible. We want to demonstrate that the regulatory impact will always be in favor of those who are regulated and that we are committed to the elimination of hefty regulations that place hurdles in front of the industry