Strengthening Position as a Service Provider

Q: How are you adapting your strategy to support Mexico in meeting its production targets after the Energy Reform?

A: We anticipated some of these changes by being proactive with our internal restructuring, which took place before the Energy Reform was even announced. The Energy Reform will have a large effect on unconventional and deepwater exploration and development. We participate very heavily in North America in these areas and are currently reaching out to our North American customers that might be potential players in the Mexican market to share our experience in Mexico with them. We want to ease their transition to the Mexican market. Unconventional and deepwater are very clearly defined as leading the themes in our growth strategy, and mature fields make up another segment where we have a lot to offer.

Q: Which competitive advantages are you relying on to maintain and strengthen your market position as a leading oilfield services provider?

A: We have several strengths that are specific to the Mexican market. The first thing would be our 77-year presence in Mexico; Schlumberger began operating in Mexico only ten years after the company was founded. Our experience and track record, our relationship with PEMEX, and our performance across the entire portfolio of PEMEX’s operations are also competitive advantages. We consider our size to be an additional source of strength: we are well represented in every geographical area and in every technology segment within our portfolio. As PEMEX has ventured into new areas, such as its recent foray into ultra-deepwater activities, we have worked side-by-side with the company’s teams in their main discoveries. This was the case with the Perdido discovery, in which a majority of the key technologies used came from Schlumberger. Going forward, our technological leadership is going to play a very important role in the expansion of deepwater and ultra-deepwater operations in the country. Another source of strength is Schlumberger’s ability to integrate across disciplines. This ability is very helpful when entering into unconventional resources, deepwater, or mature fields. This trend has been quite important over the last decade or so in Mexico, especially in different well construction or field development-related projects. We believe that, within the service industry, we are the leaders in integrating across multiple disciplines. Despite the changes and transformations of the Mexican oil and gas industry, these will continue to be very important factors even in the new market. Outside of these factors, another important aspect is our familiarity with the new players that will enter the Mexican oil and gas industry or increase operations here. We have worked with these customers in North America and other parts of the world. The service industry in Mexico will definitely get more competitive. We do not consider that to be an issue at all as we successfully compete for work in the more than 85 countries where we operate and we will continue to compete for work here in Mexico.

Q: What have been the operational highlights for Schlumberger in 2013?

A: We have had a very solid performance across all of the regions we have worked in. We have seen marked success in the Southern Region, in the deep, complex well environment under the Mesozoico and Alianza contracts. We continue to push the limits in terms of operational excellence in these projects. In the Marine Region, we participate in both shallow water and deepwater, where we are implementing the latest generation of deepwater technology, particularly for wireline logging, well-testing, sampling, and completions, as well as drilling technologies. As for other emerging themes in the industry, such as unconventional resources development, we have introduced new completion technologies, such as the latest generation HiWAY and Broadband technologies for PEMEX’s exploratory and appraisal work in shale areas.

Q: Which segments of the Mexican upstream market will be your strategic priorities for 2014?

A: All of our technology segments within the reservoir characterization, drilling, and production groups will be priorities. The key areas where our technologies and processes will make a clear difference are in deepwater exploration and development, heavy oil development, and production enhancement in mature fields. Going forward, we also hope to continue our leadership in the deep complex well environment. These are all areas where our experience, integration, and technology can add extraordinary value.