Well Services – Marco Aranguren, Country Manager – Mexico
The country manager of only the second specialist hydraulic fracturing company to break into the Mexican market discusses the potential for applying pressure pump optimization solutions to the country’s more complex reservoirs. He delivers his predictions for Mexico’s nascent shale gas revolution and explains why Mexico represents the final frontier. He also introduces Calfrac’s proprietary products for fluid conditioning and demonstrates why they are well suited to water scarce areas endowed with considerable shale deposits such as Coahuila and Chihuahua.
Calfrac was founded in Canada in 1999 and is a leader in fracturing and pressure pump optimization solutions for well development. The company first entered Mexico in 2007, winning a three year fracturing contract. What have been the main achievements and milestones to date?
Calfrac was the second specialist fracking firm after BJ Services to break into the Mexican market. Today we represent one of only five pressure pumping companies active in the country. To have been operating in the Mexico market for seven years is one of our greatest achievements and outlines our credentials as a first mover. Meanwhile, we have been steadily growing the business from having a single contract in Reynosa to sustaining presence across the states of Tamaulipas, Veracruz and Tabasco today. From a reliance on one service line, we have also expanded our portfolio to cover cementing and coil tubing. In the last seven years, especially, we have enjoyed substantial growth.
Calfrac participates in the main fracturing markets around the world from the US and Canada to Russia and also maintains operations elsewhere in Latin America – notably Vaca Muerta in Argentina. How strategically important then is Mexico for the company’s global and regional growth prospects?
Mexico is pivotal to any Latin America strategy. As far as the fracturing segment is concerned, the country represents one of the largest markets across Latin America. Even taking into account Argentina, which also constitutes a substantial prospect in the light of recent discoveries, Mexico forms a fundamental plank of Calfrac’s global business plan and is strategically significant from a pressure pumping standpoint.
What have been your star projects to date?
Our biggest contract so far has involved assisting Pemex with its Aceite Terciaro del Golfo (ATG) project for Chicontepec which is a reservoir that is reliant on fracturing to be profitable. As Mexico undergoes a shift from vertical to horizontal drilling, Calfrac’s activity could grow materially because a pattern emerges in which we are required to complete anywhere from ten to fifteen stages for a single well. This is precisely the sort of change that is taking place in Chicontepec and something we will see a lot more of if the shale revolution takes off within Mexico’s borders.
Looking at Pemex’s submission to SENER for ‘round zero’, the NOC would appear to be withdrawing from a number of its shale assets to re-focus attention on areas where it is internationally competitive such as the shallow water plays. What future shale-related opportunities do you foresee for Calfrac?
As the market opens up there will be a larger customer base and that will translate into new opportunities for everyone across the oil and gas value chain, Calfrac included. The size of the market will increase, meaning correspondingly higher volumes of activity. With regard to shale reserves, it is still not clear whether Pemex intends to tackle those projects in conjunction with outside partners or whether the NOC is simply going to vacate those spaces thus unleashing third parties to come in and pick up those projects. We don’t yet see a Pemex strategy that has been cemented in place and so are positioning ourselves for a range of different possible scenarios. Whatever happens, Pemex is going to remain, , the largest and most significant player in the oil and gas market and therefore will continue to be our primary client. My personal expectation is that Pemex will be keen to keep a foothold in the shale segment until it becomes clearer just how lucrative it is.
Calfrac produces its own patented technologies from its in-house laboratory in Calgary, Canada. What can the company bring to Mexico in terms of technology and knowledge transfer?
As a specialist in fracturing technologies, we certainly possess a number of proprietary products that could be beneficial to the Mexican market to enhance well productivity and marginal recovery rates. One such product conditions and recycles the fluids that have been injected into the well during the fracturing process to use in successive fracturing jobs. This minimizes the amount of water needed for the overall process and means you don’t need to use a new batch of fresh water for every fracture. This is an example of the sorts of solutions that have taken years to develop elsewhere, but could be readily made available for water scarce areas within Mexico that are known to have substantial shale deposits such as Coahuila.
Having been active in the shale business across the world for 15 years, Calfrac has amassed a great deal of experience and expertise. Last year alone, we successfully performed approximately 15,000 fracturing jobs worldwide. What’s more, Calfrac has been a key participant since the infancy of the shale revolution across North America and globally. As the company entered new types of shale plays with different geological formations, we adjusted our techniques to compensate for different conditions in the reservoirs. This was, at times, a steep learning curve, but has ultimately allowed us to build up a formidable knowledge base.
We have also developed much expertise in the modeling and analysis that helps prepare the design of fracturing jobs. Originally fracturing was conducted using just water and friction reducer, but over time, it has been refined, deploying different sequences of composite gel and reducer. Our first-hand experiences around the world have taught us much about the most effective chemical treatments and sequences per specific type of reservoir formation so this is an area where Calfrac has a great deal to share.
What single piece of advice would you give to fracking firms contemplating Mexican market entry?
First movers are going to get the best options. If you want to be involved you have to be here right now.
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