This week’s interview of the week is with James Buis, District Manager at Nalco Champion. We discussed the company’s strategy for increasing its production capacity in Mexico and working with smaller independent operators. Nalco Champion is a global company delivering innovative, sustainable and safe chemical services to the oil and gas market.
Q: What is Nalco Champion’s key product for the Mexican market and why is it important?
A: From a chemistry point of view, flow improvers make the greatest contribution to our bottom line in the country. Mexico has to increase production using its existing facilities and equipment. Therefore, flow improvers will always be an important product. We were working on a total of five projects for flow improvers at the end of 2017. Some of these projects are with PEMEX and some are with independent operators that either have operations or are launching operations. We also have been working to build new chemistry solutions and we have a couple of new products in the pipeline, most of them focused on high-temperature and high-pressure application conditions. We expect to carry out field trials on them soon.
Mexico is expanding the frontiers of its oil and gas industry. This has been seen not only in the fact more exploration areas are being auctioned but also in the increasingly challenging formations these areas present. In this regard, Nalco Champion’s products will become crucial for operators to lower risk and increase the efficiency of their activities. While our R&D headquarters will not move from the US, some of our divisions are starting to focus on the development of technologies specialized in ongoing and future requirements in Mexico.
Q: Has Nalco Champion considered increasing its production capacity in Mexico?
A: We import most of our products sold in Mexico from the US, and more specifically from Texas. While we already have some production plants in the country, we are also looking at the possibility of producing more in Mexico. This, of course, depends on the kind of integration we achieve with raw materials, production and logistics, since at the core of our activities we always look to deliver the smartest supply chain with the highest added-value possible to our customers.
Q: How do you compare working for PEMEX and working for smaller independent operators?
A: I think a difference between PEMEX and smaller independent private companies is the importance the latter attach to return on investment. PEMEX has not traditionally emphasized return on investment, considering production a more important metric and, for example, not necessarily wondering what its lifting costs are in a particular field. Private companies consider such issues very important because occasionally they have to go back to the home office and show financial results. Another important difference is that smaller independent companies do not have to wait for private tenders to be published to explore opportunities. PEMEX is much more reluctant to explore business opportunities without a published private tender.
Nalco Champion has a long history in the country and we want to capitalize on that to serve all the new companies coming to the country. With a strong focus on Mexico, our company wants to become the local partner of preference for the provision of safe and sustainable chemistry programs and services to the Mexican oil and gas industry.
Q: Which KPIs does Nalco Champion use when pitching its products to the Mexican oil and gas industry?
A: It is hard to talk about one specific KPI that we pitch to companies, because each and every one of our products is tailored to enhance certain elements of the client’s operations according to the formations encountered. Nevertheless, ROI and safety are the two most important indicators Nalco Champion emphasizes.
Q: How can PEMEX improve the production of Ku-Maloob-Zaap and Cantarell, two of its main assets?
A: In my opinion, there are many self-inflicted issues with the Cantarell field. It is, of course, an older field from which PEMEX has reaped the benefits, so it is never going to be what it was. However, to slow that decline and to sustain production for a period of time would have a fairly large impact. The key is to find the right solution and check downhole. At that moment, PEMEX could review different methods of application and generate new ideas.
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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