Pemex's Recent Offshore Bid Round and Using Technology To Unlock Reserves

Interview conducted by TWA editors Carter Clemens, Li Zhang, Nii Ahele Nunoo, and Bruno S. Rivas.

Javier Hinojosa is the general director of Pemex Exploration and Production, a position he has held since March 2016. Before that he was the director of development and production for the company. Hinojosa joined Pemex as an operations engineer, and throughout his career he has held numerous managerial positions such as technical specialty coordinator; production manager of the Marine Region and Southern Region; manager of analysis and evaluation of investments in exploration; and deputy director of the well maintenance, drilling, and field development unit in the Northeastern Marine Region. He is a member of SPE, the Mexican Academy of Engineering, the Mexican Association of Petroleum Engineers, and currently the president of the Mexican College of Petroleum Engineers. He has received several awards, including the Miguel Angel Centeno Prize and the National Petroleum Engineering Award. Hinojosa holds a petroleum engineering degree from Universidad Nacional Autónoma de México.

Pemex is one of the world’s largest oil producers in shallow waters. What role has technology played to get to this point?

It has been fundamental; without technology those discoveries would not have been developed at an appropriate cost/benefit ratio. Shallow-water technologies are being adapted and applied to face the environmental conditions such as seafloor instabilities, water currents, and hurricane-force winds of the Gulf of Mexico. Additionally, in these waters we have found a great variety of reservoir conditions where technology has been the key to exploit these kinds of reservoirs properly. For example: extremely high reservoir pressures and temperatures, control of connate water production, organic and inorganic scales, sour fluids, heavy and extra-heavy oil, and also compartmentalized naturally fractured reservoirs.

At this point, most of our fields in shallow waters are mature, so the technological application becomes a preponderant factor for their cost-effectiveness. Likewise, technological innovation nowadays is and will continue to be a key factor for the exploitation of the enormous reserves of extra-heavy oil, which we have in these waters.

What is Pemex doing with its mature fields with high decline rates?

Our strategy is to use technology to face these challenges, focusing on three key aspects:

  1. Pemex will be an intelligent buyer. Eighty percent of the technologies that our company requires already exist in the national and international market. The challenge is to integrate the technological and supply departments so the product can be delivered to the operative areas.
  2. We need to look at technology that is available on the market but needs to be adapted to our reservoir conditions. We will conduct tests for all emerging technology in the same conditions where we will implement them. We have already identified several technologies of interest for implementation: unconventional wells, static and dynamic reservoir characterization, smart fields, big data analytics, and some secondary recovery processes, among others. Our plan is to implement these technologies within 1 to 3 years.
  3. The final part of our strategy is new technology development, and is directed toward enhanced oil recovery processes: double-displacement, smart waters, in-situ combustion, and hydrocracking. These technologies need to be developed since they are not available on the market and represent long-term growth for Pemex. Due to the complexity of our reservoirs, we will first focus on the double-displacement process applicable to naturally fractured reservoirs; second, on the smart waters process in order to improve the recovery factor in water-invaded zones; third, on the hydrogenation process suitable for extra-heavy oil reservoirs. Because this part requires a substantial amount of research and development (R&D), implementation will be in a period exceeding 6 years.

With the new open market in Mexico’s upstream sector, do you see any advantage to new partners and competitors arriving to Mexico? Why would Pemex be the partner of choice?

Companies moving in have great opportunities in Mexico. Because they operate all around the world, they have been exposed to many different conditions and have acquired the experience that will allow them to develop innovative ways to operate Mexican fields.

Additionally, they already have most of the technological and human resources necessary to succeed. They also have the advantage of having Pemex as a partner, because our employees have knowledge and the expertise in the exploitation of these reservoirs; this will help them rapidly and efficiently produce oil at economic costs.

Pemex has experience with enhanced oil recovery (EOR)—is there any particular method of EOR or tertiary recovery that you are most proud of or excited about?

Pemex implemented the largest secondary recovery project ever seen in shallow waters with the injection of nitrogen in the Cantarell complex. However, due to the fact that most of our reservoirs are naturally fractured in carbonate formations, it has not been feasible to apply any EOR processes in these types of reservoirs.

We have had very satisfactory results with steam injection in the exploitation of extra-heavy oil sand deposits. The Samaria Somero project is a pride for our company, since it has been the most successful EOR project in Pemex history.

Two successful technological tests have been carried out in our carbonate formations: The first in the Cantarell field with the injection of foams and surfactants to reduce interfacial tension and increase the recovery of hydrocarbons in the rock matrix; the second in the Cardenas field with the injection of air for in-situ combustion. More investment is required in order to be able to conduct other tests of greater scope, but due to the prevailing oil market conditions, these have been postponed.

What does the recent round of offshore bids mean for technology within Pemex? For example, will that affect the way you conduct R&D or the speed with which new technology is implemented?

We have to work on the implementation of the suitable technologies that allow us to be a competitive and efficient company. We are currently optimizing our R&D portfolio, not only because of these rounds, but because of our business plan goals, including the assignments that we have already been awarded and those where Pemex will bid.

In projects and initiatives on deep waters, for example, Pemex will not go alone and will rely heavily on the technology that its partners will bring in order to accelerate development and deployment and get it to success. We would then assimilate these technologies rapidly for the purpose of applying them in future projects where our company will take the operator role.

The same will happen in shale oil and shale gas blocks. The new trends point toward developing technology for shallow waters, heavy and extra-heavy oil, and naturally fractured carbonates blocks. As Pemex, we have the challenge to improve oil production and to add new reserves. This is why R&D has such an important role.

Do you see any advantage to pairing with other industries to advance technology in the oil and gas industry (aerospace, health, etc.)?

We do. Pairing technologies from other areas is essential for us. For instance, magnetic resonance, which has been used successfully in medicine, is an important downhole logging tool in the petroleum industry for in-situ fluid measurement in porous media.

Around 40% of our R&D efforts are being conducted with centers from other industries. These are the CONACYT (National Council of Science and Technology) R&D centers and universities and the experience has been exciting.

Nanotechnology, big data evaluation, and the application of metallurgical engineering in terms of steam injection in extra-heavy oil reservoirs also have potential to help improve oil production.

Where do you see the technology in the oil and gas industry 5–10 years from now? Do you believe there will be huge changes in processes or current technologies?

Let me give you an example to answer this question. Back to 2009, when the CONACYT-SENER (Energy Ministry) Fund for R&D was born, we proposed a project to develop nanorobots (nanobots) that we could put into a hydraulic fracture to sense and transmit fracture productivity information to the surface to be analyzed. We consulted with world experts on the topic and they told us that was going to be possible in 10–15 years from then, that is just 3–8 years from now. We have very exciting technology that will be implemented in the future.

Is there any strategic plan in Pemex focusing on the career of professionals?

We do have a program called “Career Plan.” Its main objective is to provide an alternative to skillful professionals in technical areas to achieve better positions and salaries without having to take jobs as managers or directors, or getting away from the technical areas. The program also provides the technical path that young engineers should follow to develop the skills and domain level that will let them reach advanced stages of both administrative and technical career pathways.          

Advice to Young Professionals

Career planning is a big topic for our readers. Can you talk about a role that really influenced where you are today?

My role as a leader in the Marine Region had a big impact on my career. I managed the Cantarell Project, which was the largest shallow-water oil and gas engineering project in the world at that time. The project’s complexity involved the field engineering design, construction of a nitrogen plant, design and construction of processing centers, design of distribution pipeline networks, implementation of security systems, and adequate logistics management to go along with all of that. I had the opportunity to work with many great engineers and they provided me with the knowledge, experience, and feeling of the industry that now lets me do what I do.

Much of my work experience benefited from the many different ways Pemex supports career development. It is my belief that career planning should be focused on the company needs, but also tied to an employee’s individual interests and objectives.

What is your advice to young professionals who are scared to join the industry because of the current downturn?

Historically, exploration and production oil processes have shown expansion and contraction cycles, which mainly relate to the world’s economic growth and geopolitical social fluctuations. On the other hand, we have to mention that the contraction periods are considerably shorter than the expansion ones; this can be a great incentive for the young professionals to not give up.

For over a year, the oil price has increased slowly but consistently, which is promising news for all the passionate young engineers in the petroleum industry. The oil industry has always been a development engine, so industry professionals should not be disappointed with the natural cycles of it.

Considering our reader base, is there one skill you commonly see that you think young energy professionals can improve upon?

Many successful young professionals that I have seen are very skillful at modeling, which implies a high-level management of math and computer science. They are also very good at team working and most of them are able to communicate in a foreign language. These are key skills I would recommend young professionals to improve on.

Another piece of advice is to go for a master’s degree or PhD. This can really empower you in a more competitive world. It can give you a better image of yourself as someone willing to do “whatever it takes” to get what you are aiming for and get the job done.

Is there anything else you would like to mention that our readers might find particularly interesting?

Day after day, unexploited reservoirs are getting more complex by their own nature. It becomes necessary to continuously innovate and evolve to make them economically exploitable; in this context, the young generation that will embrace this industry should be specialized in branches even more challenging than before. They need to be open to the development of disruptive technologies emerging in the business. The petroleum industry will still demand highly prepared professionals, so our current generation of engineers should harness their aspirations and desires in order to get into this distinguished industry.

What is clear about the oil industry is that it will still be playing an important role in our lives and, unless there is a new substitute product, it will be necessary for some decades more. Oil is, and will still be, an essential player in the upcoming years.



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