Alexandro Rovirosa
CEO
Roma Energy Holdings
/
View from the Top

When Opportunity Knocks, Successful Companies Answer

Wed, 01/18/2017 - 14:30

Q: How did Roma Energy approach the bidding of Round 1.3?

A: Roma Energy has been a service provider for the last 20 years, working closely with PEMEX on several different projects. When the Energy Reform became a possibility, we saw an opportunity and decided to take advantage. Initially we had different roads to follow: the first was working for the new players entering the market, the second was developing strategic alliances with potential new players based on our knowledge of the Mexican business and with the benefit of our 600 employees working on the ground. The third and most ambitious was to become a new E&P player.

When Round 1.3 came around we saw the perfect opportunity because the guidelines and technical aspects of the onshore blocks were perfect for us. It was an aggressive round and high royalties were offered but our strategy helped us win a block. From the very first moment the blocks for the bidding round were announced we started working on G&G studies and hired an independent firm to do reservoir assessments. The company also hired an engineering company to help us develop the appraisal plan. We submitted that plan to CNH, as well as the social and environmental baselines to the Ministry of Energy and ASEA, and now we are waiting for approval and getting ready to start operations.

Everyone is learning in the Mexican market, even the regulators. They did not know what condition the blocks were in when PEMEX put them up. These blocks have not been in operation for the last 20 years and much of the infrastructure is aged and requires maintenance or must be completely replaced.

Q: How are Roma Energy’s partnerships helping the company develop the Paraíso block?

A: Tubular and Roma are owned by the same group and ION Geophysical entered the bid as a technological G&G partner because of its experience. ION was a really good partner to work with during the bidding round but when we signed the block we decided to exercise the option to buy its part too. Now it is working with us as a service provider. We have no plans to replace ION because working with it so far has been extremely successful.

For drilling operations we chose Halliburton as a service provider after undergoing an international bidding process with major companies like Schlumberger, Baker Hughes and Weatherford. During the process, Halliburton proved to be a reliable partner. This is our first operation and we want to make sure everything goes right. For the appraisal plan all the players involved, including Halliburton, Sinclair Engineering and ION through its E&P Advisors division, contributed their knowledge. We will follow the same procedure for the development plan once the appraisal gets accepted.

People and knowledge management have been among the most challenging areas we have encountered. Putting together a team with ION, Sinclair Engineering, Halliburton and our own people, who have plenty of experience as former PEMEX employees, has given us a clear advantage but there is also a lot of work to do. Our main requirement is that the people who work with us have to be open and collaborative 

Q: What are Roma Energy’s specific drilling and production plans for this block?

A: We are planning to drill five wells in 2018. We are confident we will drill all of them during the next year because they are in shallow waters and because we are going to target a Miocene area. Initially CNH announced that the block had a Cretaceous era formation down to 7,000m and with high pressure. After doing our homework and reprocessing existing data we found an interesting opportunity in the Miocene reservoir that is easier to reach, therefore making it our priority target in the appraisal plan. If this reservoir had not been discovered our job would have certainly been harder, involving higher investment and risk. We will comply with our offer in the bidding process but will now achieve it more easily thanks to this discovery.

Sinclair Engineering calculated that, per well, we can expect around 2,000b/d, for a total expectation of 10,000b/d once the five wells are in production, hopefully by next year. The crude in the Miocene is light, API 32° to 35°, so it is not too complicated to produce. For production, we are planning to first use modular facilities and eventually build a pipeline from our block to the Dos Bocas facility, which is really close. We have already held talks with PEMEX and PMI about this.

It has certainly helped that we are seen as locals and that we have plenty of contacts in the region, making it easier to work with the five land owners and the one ejido positioned right in our target areas for drilling. We are all on the same page in negotiations, which does not happen too often. Many companies have found this area to be problematic. In terms of location and production, this block turned out to be excellent.

Q: After finishing its planned wells, what does Roma Energy’s future look like?

A: After drilling the five wells and starting production, we are planning to go into the Cretaceous reservoir. Furthermore, we are also looking at Round 2.3. We are aware that there are 16 companies interested and that only one has been granted access to the data room. We want to focus on the southern onshore area close to Tabasco in this round and are planning to bid for blocks CS-1 to CS-6.

In the long term, we want to consolidate ourselves as a major reliable E&P onshore operator in the southern Mexican region. We do not discard the opportunity of offering our knowledge as a service provider for both PEMEX and the IOCs that are coming to Mexico because we know the importance of having know-how and experience working in the region. Tubular Technology would take the lead on that while we will keep growing toward our goal of becoming an E&P operator.