Page 19: of Offshore Engineer Magazine (May/Jun 2013)

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Editor’s Column

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Colloquy lutionary Party, may have new pro- not a sport.” ment offce, not a company. It is posal by September. He has vowed When bidding for regulated by the State and is non- to modernize Pemex by permitting Pemex contracts, companies are ex- competitive.

greater foreign investment, although pected to generate local employment, Pemex does not have an inde- it is likely that foreign investment and capital projects should have at pendent board of directors. A truly will only be allowed offshore and in least 40% national content. Opera- autonomous company would be able shale development. tions must respect local customs and to set its own budget, but Pemex residents: “They are part of us and has to negotiate its budget with the

PEMEX we are part of them,” Fong said. Mexican government each year.

The mission of Pemex Exploracion He stressed social and environ- Capital expenditures are reviewed by y Produccion (PEP) is “to maximize mental responsibility, and mentioned the fnance ministry. Hydrocarbons the reserves of the country, both the creation of buffer zones around are regulated by myriad arms of the in crude and natural gas economic industrial activities. There was a big government: n value, on [a] long-term basis.” PEP effort in the 1990s to clean up past SENER – Secretaria de Energia.

n is divided into four regions: North, drilling damage, he said. “Activi- CNH – Comision Nacional de

South, Northeast Offshore and ties need to be done better than they Hidrocarbures.

n

Southeast Offshore. were before. No company is going to CRE- Comisión Reguladora de

Ing. Jose Luis Fong, subdirector do work here and leave the land and Energía.

n of production for the South region, water in poor condition.” IMP – Instituto Mexicano del Petro- shared strategies at PECOM. “60% Ognen Stojanovski, a Research leo.

of our production is offshore and the Fellow at Stanford University’s The upshot is that the Mexican gov-

South region is important,” produc- Program on Energy and Sustainable ernment has becomes too dependent ing 508Mbo/d and 1652MMscf/d Development, says that Pemex’s on short-term revenues from Pemex natural gas in 2012. Crude from the economic effciency “does not and has not diversifed its tax base.

South region varies from 20°API to compare favorably” with other large

Future potential 60°API, and comprises three main operators. Stojanovski is an engineer streams: Maya (3%), Istmo (64%), and attorney, and recently penned a US drilling has surged in the Eagle and Olmeca (33%). The region lengthy chapter about Pemex in: Oil Ford shale and in the Gulf of Mexico. employees 27% of Pemex’s 15,896 and Governance: State-owned Enter- But Mexico has not developed the workers. prises and the World Energy Supply shale south of the US border, and the

Fong characterized extraction costs (Cambridge University Press, 1036p., Mexican Gulf waters are relatively as relatively low, and said artif- published January 2012). The editors untapped. There is substantial poten- cial lift systems were in place. The contend that NOCs produce most of tial in both areas.

logistics challenge is to incorporate the world’s oil and bankroll govern- The future of oil development in more coiled tubing and nitrogen ments across the globe. Stojanovski’s Mexico is about secondary, enhanced operations, and attempt to double, or analysis, “Handcuffed: oil recovery, shale

PECOM 2013 even triple the effciency. He men- an assessment of exploration and off- th 19 Exposicion y tioned a continuing problem with Pemex’s performance shore development.

Conferencia del Petroleo downhole centrifugal pump failures, and strategy,” is A recurring theme de Mexico and stressed the need to improve among the NOC case of discussion at 9-11 April 2013 response times. studies in the volume. PECOM was when,

Parque Tabasco,

It’s important for companies to be Is Pemex even an where, and how

Villahermosa, Mexico fexible, Fong said. Small and medi- NOC? PECOM speak- foreign involvement um-sized companies must be more ers challenged this, pointing to will be allowed to speed up Mexi- effcient and more competitive: “We Pemex’s lack of fnancial autonomy. can oil and gas development. In the must make hydrocarbon extraction According to the Mexican Constitu- meantime, proven reserves are being more effcient…This is a business, tion Section 90, Pemex is a govern- consumed. oedigital.com May 2013 | OE 21 colloquy.indd 21 4/22/13 9:31 PM