Audrey Leon speaks with Cesar Granados, Mexico country manager at Weatherford, to get the service company’s perspective on Mexico’s newly opened oil and gas industry, and what role Weatherford aims to play in it.
A Weatherford operation offshore Mexico. Photo from Weatherford.
OE: What are your thoughts on Mexico, pre- and post- the energy reform?
Weatherford entered Mexico in 1976, with a manufacturing facility for its cementing products. Today, we are one of Mexico’s largest and most diversified service companies, thanks to our strong local infrastructure and core values, including our great local people, our entrepreneurial spirit, and our large footprint in the country.
Our industry is a living, ever-changing, cyclical environment. The drastic reduction in oil prices, capital flows, and exploration and production activities starting in mid-2014 offered an opportunity for us to innovate. We have transformed our operational workflows and are integrating technologies and processes in a way that creates value through operational efficiency. During a difficult time, we focused on developing and preserving the right combination of people, technologies, and processes.
OE: What does the drilling services sector look like in Mexico currently? What is your perspective on current activity offshore Mexico?
The recent industry challenges that we faced have made our sector even more solid and efficient than before. Our long-term commitment to doing business in Mexico drove our decision to preserve our local talent and capacity during this severe downturn.
Our preserved infrastructure now makes it possible for us to absorb additional activity resulting from CIEPS (integrated exploration and production contracts) and COPFS (financed public works contracts) migrations, and to become a major service provider for the independent operators taking on these projects.
There are some challenges for deepwater development in Mexico. If you compare the service profile and technical characteristics of deepwater fields in the US and Mexico, the biggest difference is the capacity and infrastructure in place. Mexico is working to explore and to develop this complex and relatively new environment.
Shallow water is different, as Mexico is already a leader in this area and has an entire infrastructure in place for further development. Weatherford has experience in both deepwater and shallow water environments. Some noteworthy successes in this area include integrated borehole enlargement operations using our RipTide RFID drilling reamer, which is especially effective in Mexico’s deepwater fields, and a long and successful track record of installing liner hangers in the country.
OE: What are some of the challenges Weatherford sees in the Mexico market (workforce, equipment, etc.), and what are some ways the company has worked to overcome them?
There are many challenges in the industry today, not only in Mexico. During the current downturn, our industry has shifted to a single-purpose value mindset. Our clients had an urgent need for greater cost and operational efficiencies, innovative and integrated work flows as well as optimized production.
With regard to workforce, we continue to invest in human capital, maintaining close relationships with Mexican universities in order to incorporate and to develop local talent. This has remained important to us even during the recent downturn. We firmly believe that developing and strengthening our talent bench is essential to driving incremental performance into our business.
OE: As a company that has been present in Mexico for decades, what is the long-term outlook for Mexico’s oil and gas industry from your perspective?
The biggest opportunities we anticipate will be in unconventional and offshore operations. Higher activity from the private sector will increase competitiveness in the marketplace, and will certainly help develop our local industry. Weatherford has reacted very quickly to the changes in the Mexican oil and gas market, adjusting the company through smart internal restructuring. However, to succeed in the Mexican oil and gas industry, we need to continue demonstrating our integrated approach and our capacity to provide high-quality service in all environments.
The energy reform was enacted at the right time and is attracting more and more investors to the country, so more opportunities will be available to all of us.
Cesar Granados has over 20 years’ experience in the oil and gas industry, 17 of which have been with Weatherford. Granados holds a BSc in petroleum engineering and is pursuing an executive MBA. He is an active member of the Society of Petroleum Engineers, and has authored several technical papers and presentations.