Total Seeks Successful E&P Partnership with PEMEXWed, 01/21/2015 - 22:40
Q: What are the main opportunities that Total has identified in Mexico’s oil and gas industry, and which of these are you looking to capitalize on?
A: Given the magnitude and diversity of Total’s exploration and production activities around the world, the company is interested in the upstream opportunities that the Energy Reform will bring about. As of today, we carry out E&P activities in more than 45 countries, where we handle a wide variety of complex areas. Mexico is aligned with Total’s worldwide target of producing 15% of the world’s deepwater assets by 2017. With more than 500 wells in different regions and eight FPSOs currently operating, Total is already well positioned globally to benefit the industry locally. We are interested in working with complex challenges and we know that we have the capabilities to decipher the Mexican deepwater reservoirs, be it in the unexplored subsalt region adjacent to Perdido or any other area already explored by PEMEX.
It is evident that the diversity of Mexico’s offshore assets has sparked great interest on a global scale. Nevertheless, the complexity of the factors involved to successfully explore and produce the country’s resources is a critical topic that has to be considered. Total understands this challenge and will focus on projects that add value to the Mexican oil and gas industry, while also making sure the company remains profitable. Our involvement in Brazil’s deepwater projects surely sets an example of how the company will approach new ventures in Mexico. About eight months ago, we signed and secured our involvement in the Libra field, a project in which Total’s contribution of technology and human capital revealed a newly-set standard for the company’s involvement in large deepwater field developments.
Total has been present in Mexico for over 30 years and the company has over 6,500 employees in the country. Even though the company has been working with chemicals and lubricants here for so many years, Total has still not participated in the E&P segment of the country’s energy sector. We are thus hoping to participate in deepwater, extra-heavy oil, and unconventional projects in the near future.
Q: What will be the key drivers defining Total’s E&P strategy in Mexico, and what are the challenges ahead for PEMEX that Total can help to solve?
A: One of the greatest challenges that Mexico will face is making sure that PEMEX remains a leader in the national oil and gas industry. The continuous development of PEMEX must be promoted by aiming for the highest technological standards that are required to tackle new and more complex fields. Total is aware of the technological capabilities that these new ventures will require, and that is precisely where it is looking to combine forces with PEMEX to take on new projects, not only for the benefit of Total, but also to establish the firm as a partner that works together to boost the NOCs capabilities. Throughout Total’s experiences in other parts of the world, the company has seen that having a strong national oil company is crucial for the success of the private sector in a country that has a tradition of state- owned production. As a result, we know that PEMEX will have to continue to be a leader in the industry, which is precisely why we are looking to build a strong relationship with the now productive enterprise of the State.
Q: What would be the advantages and disadvantages for Total in creating a partnership with PEMEX?
A: Given PEMEX’s long history of operating in Mexico, the weight of its human resources and its technical expertise in the country’s assets make PEMEX an indispensable ally for any new company venturing into the oil and gas industry. PEMEX’s technical work and its extensive collaboration with the contractors operating here is definitely an advantage that can benefit any newcomer in the reshaped hydrocarbons sector. It would not be a good idea for any company to come into Mexico thinking that it can do things alone. On the other hand, companies must bear in mind one important factor: PEMEX has never partnered with any other operator before. For this reason, I believe that restructuring PEMEX’s way of doing things will be a challenge. Total is ready to support PEMEX throughout this process as a partner that is aware of the NOC’s strengths and limitations, while also understanding its inherent qualities and technical capabilities. Total can become a trustworthy partner to PEMEX and we want to materialize this opportunity by showing that we can truly take on deepwater and unconventionals projects collaboratively.