Harry Bockmeulen
Country Manager
Petrofac México
View from the Top

Setting Down Roots n the Mexican Oil Industry

Wed, 01/22/2014 - 11:29

Q: What have been the major challenges and achievements of your work in the Santuario and Magallanes blocks?

A: Petrofac has been looking at Santuario and Magallanes for two years now. The way these two blocks have developed to date validates our work and we definitely see a lot of long-term potential there. In terms of challenges, it should be noted that we took our first steps in Mexico when we started with these fields two years ago. At the time, we were unaware of the possible difficulties we would face. However, we have been pretty successful at being able to operate, our relationship with PEMEX has developed and we are working to increase production. Petrofac did take some time to fully understand where the bottlenecks were in Magallanes, but today, production is up significantly and continues to steadily increase. The wells in Santuario are bigger and more accessible but those in Magallanes present a more steady production. It is a super-giant field with over a billion barrels originally in place. Our initial approach for these blocks was not based on new technologies as Petrofac drilled horizontal wells in Magallanes and Santuario, in addition to using ESPs. These may not be new technologies but they were applied for the first time in these fields, and we will maintain this approach.

Q: What were the complementarities between the expertise and capabilities of Petrofac and Schlumberger that led to the creation of Petro-SPM?

A: Petrofac is a company that is very strong at building surface facilities and infrastructure. Schlumberger, on the other hand, is very strong in subsurface technology and has been in Mexico almost as long as PEMEX. Petrofac benefits from that experience. These were the main reasons behind this international alliance, which has proven its worth in Pánuco. The idea is for each to play to our strengths, so Schlumberger provides the sub-surface team while all of the surface operations and facilities are provided by Petrofac. Pánuco is one of the largest fields in Mexico, with around 7 billion barrels in place but the wells are not producing much. The development plan calls for several hundred wells to be drilled in order to understand where the production lies. Schlumberger has several rigs in the area, but the challenge is getting them to where they need to be. We are only a year into the cycle so we are just starting to execute this plan in Pánuco. I have not seen any significant changes yet but we never expected a surge in production like we did in Magallanes and in Santuario, though. Pánuco is more about gaining a broader understanding of the surface and testing our technology. The rate increase will come later.

Q: What led you to bid again on the Arenque field after the process was declared void during the first round of bids?

A: Arenque is a huge block of 2,000km2. This is almost the equivalent of ten blocks in the North Sea. Our sustained interest in Arenque comes from its enormous production potential. PEMEX also made a number of discoveries in this area which need to be appraised. We must remember that Arenque is offshore, thus the financial risks entailed in reaching a production phase are entirely different from Magallanes or Pánuco. Nonetheless, I think it is a fantastic block to work in, especially since we have a good understanding of its sub-surface characteristics.

Q: What importance does Petrofac place on promoting and developing local workforces?

A: We naturally focus heavily on local content. We do not need to source everything from elsewhere. Petrofac also participates with PEMEX in programs aimed at supporting the development of small and medium-sized companies and providers. We also work with the government of Tabasco in similar endeavors. It is very hard to recruit locally in the communities where Petrofac works as our industry is capital intensive rather than labor intensive, meaning we need highly skilled people. An important part of our human capital strategy consists of approaching local universities and offer students employment positions and training options. Beyond this, Petrofac places great emphasis on sourcing the skills it needs locally. For example, our staff’s composition is about 90% Mexican and 10% international. I am very proud of the fact that our company has close to 350 staff members in Villahermosa and Tampico, with most of them being Mexican. The company provides them with training courses to improve their skills and generate new abilities. After all, we are going to be here for several more decades and we will need plenty of people over that time period.