Alma América Porres
Commissioner at CNH
View from the Top

Untapping the Industry's Technical Potential

Thu, 05/17/2018 - 16:14

Q: To what extent did PEMEX’s ambitious participation in the licensing rounds harm its delivery capacity?

A: Several discussions on the number of assignations given to PEMEX have been made. On the one hand, some voices argue there were too many blocks. On the other hand, others claim it could have gotten more. Ultimately, we have to focus on the results. PEMEX has a long history of exploration success, making the NOC an undisputed global leader in shallow waters and heavy oil production. It has also been fortunate to discover deepwater resources, despite the lack of technological and financial capacities to develop them. PEMEX found a niche in the Perdido area and is moving forward with further exploration and development activities. The requirements for these kinds of projects implied finding partners, sharing the know-how and introducing new technologies to increase recovery factors in the NOC’s reservoirs. I believe PEMEX’s involvement in various assignations is positive. Now it is time for the NOC to meet its commitments.

Q: What factors account for PEMEX’s delay in migrating its CIEPs and COPFs contracts?

A: Integrating the clusters for migration and the conditions for this procedure is a challenge, mainly in the way the clusters are integrated. PEMEX decides the details, number of contracts and schemes, and must present that information to the Ministry of Energy detailing the number of contracts it intends to migrate and the schemes it will deploy for the migration. CNH's role is to provide technical opinions on the prospects and on the plans to improve conditions and speed up the processing times.

Q: What are the opportunities and challenges you perceive in PEMEX’s farmouts?

A: PEMEX invested heavily in these areas and developed them under different market conditions and procurement standards. I firmly believe that these are exciting areas with much potential. However, the development of the areas depends on the rapid adaptation of the current market conditions.

Q: How is CNH securing a competitive and sustainable natural gas market and what are your expectations from Round 3.3?

A: When the Ministry of Energy proposed the rounds for onshore areas, such as Burgos and Veracruz, for which we calculated the potential for extraction and the volume, there was a great deal of uncertainty surrounding the allocation of these blocks due to low gas prices. We were much surprised by the success of the rounds, given the gas market conditions.

We have studied the development of shale and onshore fields in other countries and we believe that the only way to make it work is to properly prepare regulatory entities, to have the necessary guidelines in place and to cause no harm to the environment or to communities. Mexico acted prudently in this case to develop guidelines before the rounds took place. We expect a similarly successful Round 3.3. I am convinced that ASEA, CONAGUA and CNH guidelines meet the international standards for these kinds of projects and several operators will be interested.

Q: What parameters account for a successful licensing round and how has Mexico performed in this regard?

A: I would say the parameters Mexico has put in place have proven to be successful. The way the country selected its areas have created value for the operators. The rules for awarding fields are also fair, as their size depends on their potential for discovery and the pre-existence of resources in the wells. The Mexican model has resulted in low levels of uncertainty and richness of data. Transparency has also provided confidence, and our licensing rounds have met the top international standards in this regard.

Q: What steps has CNH taken to secure the fulfillment of the awarded contracts despite a new presidential term?

A: We already have 107 contracts signed, and they will be enacted and fulfilled regardless of the next administration. One of CNH’s most significant advantages is its autonomy and the transversal appointment of its commissioners. Activity in the industry has already started, and it cannot stop now.