Tech Solutions Make Light Work of Costly WorkoversBy Peter Appleby | Tue, 09/15/2020 - 10:32
Q: How has Welltec’s Mexican market activity evolved in the past 12 months?
A: Welltec provides a broad range of well interventions services and completions products. We have continued to grow across Latin America, especially in Brazil where we are helping Petrobras to deploy really cutting-edge completions solutions. In Mexico, we had very positive engagements at the start of the year but unfortunately the corona pandemic that has affected us all, prevented various opportunities from materializing. It remains challenging to enter Mexico and we continue to focus on various smaller local operators as well as Pemex. With the López Obrador administration there has been more investment into PEMEX in general and we definitely see opportunities more in exploration than development when looking at offshore operations. In other parts of the world our products are run in similar high profile deepwater wells that carry similar challenges to those faced by PEMEX during the exploration phase. In the private offshore market, the outlook is also promising and we are engaging with a few key companies such as Shell, Talos, Murphy and BHP Billiton.
Q: How does Welltec approach clients in the new price environment?
A: I think here we have to look at our approach to the pricing environment itself i.e. the general market and our approach to clients. The last downturn between 2014-2017 was quite severe for all and in particular the service industry was impacted by heavy pricing concessions. In addition, many companies have made massive improvements in terms of efficiency. The service industry was really only just starting to recover before this current downturn took hold. This has been extremely difficult for many but there is a realization that bulk of efficiency gains have been realized and that excess cost was also removed from the industry.
So for approaching the market we have done our best to focus on value and ensuring that our clients see that they are getting a ‘good deal’ on the solutions we’re bringing to the table and ultimately saving them money in the long run. An example of this is a digital tool in our portfolio that allows us to compare a client’s reference solutions with one of our own and generate a cost and rig time comparison between both solutions. This has proven successful in convincing clients, especially new clients or those working on new fields that have not previously used our technology. This value proposition analysis is carried out alongside the operator. They are the ones providing us with the cost data that we input into the comparison. We deliver a probability chart to them, which details the success of one solution compared to the other and we are able to support the claims with real data from previous well examples.
These types of propositions are the only way operators and service companies can mutually benefit. To put into a downward pricing game with competition is dangerous and the companies that go down this road may not be around when the market rebounds again.
Q: How does Welltec offer examples of its well services?
A: In terms of interventions services and in particular wireline-based interventions services, Welltec invented this market when we established the tractor in the mid-90s. Therefore, when it comes to examples of interventions, we have the largest track record and library of case stories. There are multiple examples of every service in every environment from all across the world. For example, our clean-out operations in the deepwater environments of West Africa or in the Norwegian North Sea continue to showcase how we can significantly reduce operator spend by negating the need for heavy intervention methods such as coil-tubing.
Most of our well completion solutions for the deepwater market are focused on increasing well integrity across the life cycle of the well. We can use them to enhance a cement operation or replace cement for life of well isolation on the annulus. We recently carried out an operation in the US GOM where the operator is using a conventional solution and carrying out a workover that would have cost between $4-6 million USD every time. Around 90 percent of the time the operator needs to perform these workovers, and this happens just after drilling because they cannot achieve a good cement job. In this case our completions products can vastly reduce the overall cost to the operator. Our tools can isolate conflict zones within their cementing operations and save the client millions per well at this early stage. In a recent example in Congo, we proved over $4 million USD in savings per well, including the rig time and our costs. Over a 10-well project, the savings are huge.
Q: How does Welltec approach PEMEX, a company that is now renowned for its openness to new technologies?
A: The industry as a whole is open to new technologies…it needs new technologies, but our industry is also extremely risk averse, especially when you are introducing ideas that go against the conventional way of doing things. And typically, the larger the company, the bigger those risk hurdles are. To overcome this, track records are key. Our interventions track record speaks for itself...this is a market where globally we are leading. For completions, I think we are at a stage now where we have a strong track record with over 200 deployments globally and so now, we can approach large NOCs like PEMEX to discuss technical trials. We have to prove ourselves every time and prove the benefits that others are seeing.
Q: How will Welltec expand its footprint in Mexico given the current environment?
A: Welltec is divided into nine global regions, one of which is Latin America. Mexico is a real potential market for us but as mentioned, it is challenging to enter. But one of our main advantages over our competition is agility and flexibility. We can easily support new ventures through satellite bases and we are experienced in working with a number of different partners and suppliers across the world. This is the model we operate. We know we do not offer a full catalogue of services but neither do we have to and we ensure we can very easily combine our solutions with others. Its this flexibility of solution that our clients really appreciate. They have full freedom to design and engineer the solution they actually need.
Welltec is a robotics solutions provider that focuses on reservoir optimization, well-completion technology and intervention solutions.