Eckhard Hinrichsen
Country Manager Mexico
View from the Top

Unique Positioning in Third-Party Verification

Tue, 01/21/2020 - 17:21

Q: How would you rate the help provided by DNV GL to help companies comply with SASISOPA and ASEA regulations?

A: It was a tough year. It did not start well but picked up in the second half of 2018, driven by SASISOPA and Probable Maximum Loss (PML) services. In 2016, insurance requirements for upstream were increased for deepwater and shallow water drilling in particular. In April of last year, midstream operators were required to undertake a PML study with the help of an agency authorized by ASEA. In 2016, we started the process to acquire authorization for upstream and were the only company in Mexico that fulfilled the technical requirements to become authorized. Business was not booming because the major IOCs are self-insured. That changed when the insurance regulations were extended to midstream. The potential market is larger and we had the authorization and the technical expertise to perform these studies.

Our focus is now on midstream and PML. We are helping operators to get SASISOPA implemented and approved by ASEA. We have worked with several operators to resolve issues with SASISOPA and ASEA. If SASISOPA is not approved on time then the final client of the operator can apply fines.

Q: What are some of the questions that the new PEMEX asset managers are asking you?

A: With regards to integrity, they want to know where to start. There was very little investment in PEMEX in the last few years due to the crisis and the focus on becoming more profitable, so maintenance budgets were curtailed heavily. Now there is a large backlog. First, there needs to be money allocated to invest smartly. The focus is on increasing production at any cost and on grabbing the low-hanging fruit, onshore and in shallow water. There seems to be little long-term activity to replace reserves and there is little investment in deepwater or unconventionals onshore. Shale is politically off-limits, at least for now.

There is no forum of independent third-party companies that provide certification and verification services on behalf of the regulators, mainly ASEA. This is a very important function to ensure that oil and gas activities are performed safely and that the risk to human life and the environment is reduced as much as possible. This has been a good and proven practice for decades in most oil and gas-producing countries, such as those in Europe, Brazil and the US. We have the impression that the new government is not very much in favor of certification from third parties. There is the risk that some oil companies will exploit that. It is important that ASEA and CNH are supported by experienced international third parties like ourselves because they do not have the resources to oversee compliance for all the projects that will be executed during the coming years.

Q: DNV GL is making a big push into digitalization. How does that reflect in the local market?

A: The main element of our strategy is to become more digital in all we do. We are developing services, providing platforms and training our people to lead the digital transformation. We are offering these services to our local clients and have had success with midstream companies. Most of the new operators in Mexico are headquartered abroad and strategic IT decisions are typically taken centrally.

DNV GL has an open industry platform called VERACITY. We like to see this as a marketplace that brings together different players, such as our clients, software developers and authorities. The idea is to foster the exchange of and access to data and extract value from that. All of this is done with observance of the highest security standards and our clients have full control over their data and their access. We already have more than 100,000 registered users.

DNV GL is a global quality assurance and risk management company. It provides classification, technical assurance, software and independent expert advisory services to the maritime, oil and gas, power and renewables industries.