This week’s Interview of the Week is with Luis Vázquez, Chairman of the Board of Diavaz of Grupo Diavaz. Grupo Diavaz is a 100 percent Mexican company founded in 1973, made up of business units focused on exploration and production of oil and gas, marine operations and installations integrity jointly created through strategic and commercial alliances with leaders of the international energy sector.
Q: Diavaz has traditionally partnered with many foreign companies. What do you look for in a partner and what do your partners get from you?
A: We have met companies from all over the world. We would like to operate offshore and are looking for a partner that has offshore experience. We are also interested in a partnership for the development of unconventional resources. We will be looking for a partner to work with and from whom we can learn how to properly produce from unconventional plays.
We have a good reputation globally. International companies know we are serious, that we like to accomplish things and that we like to learn. We offer them in-depth knowledge of Mexico. We have a great deal of data and have been working with PEMEX for 45 years. At one point we had a partnership on seismic studies with CGG and we have geological information from that period.
Q: What has been your experience with the migration of your CIEPs contracts?
A: The migration of our contracts should have taken place three years ago. The reasons we have been given for the delays include regulation, misplaced commas and other minor details that can take weeks to resolve. Three years ago, there were 22 contracts that were eligible for migration. If those 22 had been migrated three years ago or two and a half years ago they would be producing around 100,000-120,000b/d from 20 wells. But right now, of 22 wells, only two are producing under the new contract scheme, and those were migrated at the beginning of 2018, not three years ago.
We think the authorities are learning to be more flexible about regulation and to consider what the purpose of regulation is. When our migration process was delayed we stopped investing. Three years ago, we produced about 12,000-13,000b/d from our Ebano field. Now we produce 9,000b/d. We will not drill a single well before the migration of this contract is finalized because investing in it beforehand is a waste of money.
Q: Do you see Diavaz becoming a publicly listed company at some point?
A: I think our exploration and production arm, DEP Petróleo y Gas, might become a publicly listed company because of the financing required for those activities. As an operator in El Barcodón and El Catedral, the more money that we put in, the more money we are going to get out. DEP Petróleo y Gas could become a public company in two or three years, in all likelihood on the TSX but that is a decision that we have not made yet. Our only reason for an IPO would be to have access to more capital. We need to encounter new forms of financing to optimally develop the fields we have.
Q: What would be on your wish list from an incoming Mexican government?
A: I would ask for a revision of the drilling permit approval system, so companies are not forced to wait one year for a drilling permit. As far as I can see, the Energy Reform has gone ahead untainted by corruption. Everything has gone very well; the only problem is the length of time taken for permitting.
This is an excerpt from the 2018 edition of Mexico Oil and Gas Review. If you want to get all the information, plus other relevant insights regarding this industry, pre-order your copy Mexico Oil and Gas Review or access our digital copy.
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