Eckhard Hinrichsen
Country Manager
GL Noble Denton

Why Certification Matters in the Oil and Gas Industry

Wed, 01/25/2012 - 08:54

Germanischer Lloyd is known mainly in the Mexican oil and gas industry as a certification company, but is now looking to add value and depth to its offering in the market by using its unique strengths, created through its history in certification. Eckhard Hinrichsen, Country Manager of GL Noble Denton (the Germanischer Lloyd business unit in charge of oil and gas), explains that although Pemex’s safety culture has developed well in recent years, their use of certification has varied. “Pemex started certification activities in the mid 1990s, but their use of it has been up and down since then. Some areas of Pemex use it and it has benefitted them, whilst in other areas and regions they didn’t see the value, so they abandoned it. While the use of certification in Pemex’s shallow water activities is limited, demand for certification services is rebounding because of the CNH, which is asking for certification in deepwater, where Pemex has little experience so far.”

Despite this, Hinrichsen believes that certification matters in Mexico: “Certification ensures that all applicable codes and standards are taken into consideration and that the safety standards are adequate and applied uniformly amongst different companies. Not all contractors operating in Mexico have the same safety standards, and certification is there to ensure not only that standards are in place, but are also enforced.”

Today, GL Noble Denton’s certification work is mainly related to onshore pipeline infrastructure in Pemex’s southern region. The company aims to expand its offering in Mexico by looking to the areas where Pemex will need the most advice, namely areas such as deepwater where the company needs to develop safety and risk management strategies for completely new business areas. Hinrichsen explains that the company has already worked with Pemex to develop a risk management plan for the NOC’s deepwater exploration project at the Lakach field, and in February 2012 started a high-level risk analysis of the entire project. In 2010, the company completed a RAM (reliability, availability and maintainability) study for Pemex for all of its deepwater fields, and since September 2011, the company has worked with Pemex to develop a consequence analysis method for dealing with worst case scenarios, such as a loss of well control accident.

Rafael Parrilha, the Director General of Bureau Veritas Mexico, also identifies opportunities beyond certification. “We think we are in a situation now where we have to transfer the knowledge we have from countries where we are well-established to the markets where we need to grow.” In order to build its business beyond its inspection and certification services, Bureau Veritas hopes to expand its offering in Mexico to eventually cover a range of consulting areas, and turn the company from a simple certification business into a full-service consultancy as it operates in other countries such as Brazil.

Parrilha explains that Bureau Veritas cannot currently compete with local Mexican companies that offer lower prices, but also lack the international experience. However, there are some opportunities to gain a foothold in certain segments. “One of our growth platforms in Mexico is environmental consultancy,” says Parrilha. “With local companies here in Mexico, we are growing very fast with carbon credit solutions for a clean environment. This has been one of our fastest growing business areas in 2011. However, we do not currently work with Pemex in this area. This presents an opportunity as we have many services to offer, from simple certification in ISO 14000 to full service consulting. For example, we can offer engineering consulting to establish environmentally safe designs, and have computational models to curb and define gas flaring.”

Parrilha also believes that there is potential for the introduction of consultancy services in areas where his company already works with Pemex, such as on shallow water projects. “Our main strategy is to offer Pemex a more complete range of services, not only inspection but also to help them establish a management system for asset integrity. We have software developed in-house that ranges from inspection to helping the company define their inspection and maintenance plan, and to help them along the path of upgrades that will be necessary as the company works to revitalize its mature offshore fields. Such work will help to maintain the level of safety.”