Mexico Oil & Gas Review 2018

Page 178

INSIGHT

AFTER A STRONG HIT, AN OPERATOR ON THE RISE BRUNO PICOZZI Director General of Sapura Energy Mexico

174

Activity is returning to oil and gas following a challenging

years, not in three or four as many are hoping,” he says. It

downturn. When factoring in the results of the bidding

is after those 10 years that he believes there will be enough

rounds, competition is tough for companies trying to win

activity to propel a thriving hydrocarbons market in Mexico,

service contracts from the new operators entering the

allowing for the creation of a strong value chain capable

country. But with memories of the crash still lingering,

of working together with international companies and

operators are demanding favorable reward-risk ratios.

even developing its own technology. “Until that moment

Sharing the risk through different contract models, says

comes, work will remain intermittent, which in turn means

Bruno Picozzi, Director General of EPC Sapura Energy

low security for service companies.”

Mexico, is one way to compete in this robust environment. With Sapura’s experience, it is therefore not limiting itself “As a company with activities across the oil and gas value

to only working as a service provider. “Because we are a

chain, from building and installing platforms and pipelines

fully integrated company with activities in every aspect

to drilling and producing hydrocarbons, we are capable

of the offshore value chain, we are capable of working as

of properly quantifying the risks associated with all these

an operator,” Picozzi says. “In that sense, we could take

activities,” he says. “In that sense, we can offer single or

part in both farmouts with PEMEX and in the licensing

integrated solutions that adapt to the client’s strategy.”

rounds. As a matter of fact, Sapura has prequalified as an offshore operator.”

Sapura Energy Mexico is a diversified company in the offshore sector. With three divisions — E&C, E&P and drilling

The regulators are learning lessons as they go in this

— global operations and a relatively young fleet, Picozzi

relatively new playing field and Picozzi also highlights

firmly believes the company is capable of providing services

the importance of Mexico taking advantage of the fact

that fully address the needs of the operators. In that sense,

that its industry is one of the last to open internationally.

Sapura is looking with interest at all the possibilities the

It is therefore capable of learning from others’ mistakes.

country offers to diversify its activities.

“Mexico remained a monopoly for a long time. Now the incentives the country is providing for the development

Initially, the company looked like it would brave the

of its oil and gas industry in such a difficult international

downturn with a strong 2015, when it performed four

scenario means investment is a no-brainer for many

platform installations and installed two major lifts and 40km

companies,” he says.

of pipelines. At the beginning of 2017, Sapura began to feel a budget squeeze but this did not discourage it from

Picozzi warns, though, that the country should tread

focusing on Mexico. “The hydrocarbon licensing rounds

carefully. One potential area for failure is that of local

are boosting activity in the arena and more discoveries are

content. “While the rules enforced by CNH and the

taking place, so we are preparing for an upturn in activities,”

Ministry of Economy require a healthy level of local

says Picozzi.

content, we can see this situation mirrored in the opening of Brazil’s energy market,” he says. “The country went

Mexico’s oil and gas industry has been bolstered by the

from producing 1.2 million b/d to 2 million b/d as the

successes of the oil and gas bidding rounds. But Picozzi

market opened. But as Brazil’s local content requirements

warns that to create a strong industry, the country needs

became ever stricter, investors felt wary of investing more

to keep the licensing rounds going for at least the next 10

in the country. These changes ultimately made projects

years. “The Energy Reform has been very successful in its

more expensive and disincentivized investment instead

first two licensing rounds but it must be recognized that

of promoting the inclusion of more local companies into

the industry will only develop to an adequate level after 10

activities.”


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Articles inside

KEEPING PIPELINES GOING FOR THE LONG TERM

1min
pages 318-319

DIVERSIFICATION THE KEY TO SUCCESS

1min
page 317

COMPRESSION AND COGENERATION TO MEET RISING DEMAND

1min
page 316

PROVIDING MEXICO’S GAS SECURITY

1min
pages 314-315

ADVANCED TECH AT CENTER OF CUSTOMER-FOCUSED VISION

1min
page 293

FULLSTREAM ACTIVITIES IN A FULLY OPEN COUNTRY

1min
pages 290-291

KEEPING THE WELLS FLOWING

1min
page 261

SHALLOW-WATER ACTIVITY TO PICK UP PACE NEAR TERM

1min
page 208

AFTER A STRONG HIT, AN OPERATOR ON THE RISE

1min
page 178

PICKING UP THE DEEPWATER THREAD

1min
page 203

A VARIETY OF SOLUTIONS, ONE INTEGRAL OFFER

1min
pages 174-175

SPREADING THE POWER OF DATA TO THE OIL AND GAS INDUSTRY

1min
page 145

COMPLEXITY IS A MARKET OPPORTUNITY FOR THE PREPARED

1min
page 144

PIONEERING SCHEMES OPEN DATA TO PRIVATE COMPANIES

1min
pages 138-139

AN EXPERIENCED PLAYER SEEKS MATURE OPPORTUNITIES

1min
pages 126-127

WORK STILL NEEDED TO KNOW STATE OF INHERITED FIELDS

1min
page 122

TAKING THE LEAD: THE ZAMA DISCOVERY

1min
page 116

RESTRUCTURING FOR OPTIMUM PERFORMACE

1min
page 115

WORKING WITH GIANTS

1min
pages 106-107

PLAYING A POSITIVE SUM GAME

1min
pages 106-107

TEN YEARS CREATING VALUE

1min
page 80

SOLVING A DICHOTOMY, ON BOTH SIDES

1min
page 79

REVIVING A SOUTHEAST GIANT

1min
page 62

NORTHERN MEXICO’S HYDROCARBONS BET

1min
page 52

KEY GOALS: GENERATE EFFICIENCIES, MAINTAIN COMPETITIVE COSTS

1min
page 104

A YEAR RICH IN DISCOVERIES

1min
page 28

TIME TO PLACE YOUR BETS ON MEXICO

1min
page 19

ENERGY REFORM DEMANDS BEST INTERNATIONAL PRACTICES

1min
page 18

NO NEED TO FEAR FUTURE OF LICENSING ROUNDS

1min
pages 20-21

UNDILUTED ACCOUNTABILITY FOR A HEALTHY INDUSTRY

1min
page 22
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