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Mexico 2019 | ENERGY | INTERVIEW

Shell is set to drill faster in Mexico than it has anywhere else before.

Alberto de la Fuente
BIOGRAPHY
After a variety of roles in the public sector, in 2006 Alberto de la Fuente joined Shell as Marketing Manager at the North West Shelf Gas in Perth, Australia. Over the years, he has represented the company in Oman and Dubai. He has a master’s degree in economics and history from Oxford and an MBA from the Australian School of Business in Sydney.

Why did Shell decide to enter Mexico's deep-water industry?

We decided to do this for several reasons. The most important being that Shell is a leader in deep-water development and exploration around the world. Second, Mexico offered the right opportunity for us to come and participate in this particular area. We produce nearly 1 million bpd from deep water globally. From the bids that took place in 2018, we were able to secure a significant footprint in Mexico. We currently have 11 blocks in the upstream sector. We operate 10 out of the 11 blocks, nine of which are in deep water. We operate in the US as well, and had been exploring the US Gulf of Mexico for some time when we thought it was high time to explore the Mexican side too.

What strategies is the company using to maintain its ambitious drilling plan from now till 2020 in Mexico?

We would like to start drilling by the end of 2019. Recently we obtained the regulatory exploration approval from the National Hydrocarbons Commission. Hereinafter, we have to put forward the drilling plan application. We also obtained the environmental approvals that go along with that. There is still some logistics planning needed to support the operation. It is like a big jigsaw puzzle. We are continuing to evaluate, and as the date approaches will be working more on the actual drilling. It is about having everything in place to move forward. In 2020, Mexico is big on our global radar. In fact, Mexico could be the place where we drill the largest number of wells. Toward this end, we will have a large exploration campaign in 2020. This is the beginning of a busy four-year schedule for Shell in Mexico. Our operations in Mexico are set to become the fastest we have drilled anywhere. Also, this will be our biggest exploration campaign in 2019 because it's quite significant for Shell as a group. It shows the long-term commitment, we have for Mexico and our understanding of the country's need for speedy investments and new infrastructure.

What characteristics do you look for in a company before deciding to collaborate with it in a consortium?

Looking at our history, all our collaborations are specific in terms of geography and time. We recognize the value of partnering with others. Shell partners with national oil companies around the world. Similarly, we participated with PEMEX in two previous bid rounds.

What is your outlook on the delay of licensing rounds from the new administration?

The President of Mexico has been clear in terms of evaluating the success of this model before moving forward with new bid rounds. We have been engaged in a very productive dialogue with the new government and are hopeful the results of the work carried out by Shell and other companies will be sufficient to help the president and his government make the best decision. It is in the best interest of Mexico that we discover and produce as much hydrocarbons as we can. We already see signs of investment and the number of wells the industry is committed to drill. The National Hydrocarbons Commission has already approved 331 wells, which shows the commitment we have made as an industry to seriously move forward. In all, AMEXHI, the Mexican Association of Hydrocarbon Companies, is producing around 31,000bpd, and by the end of this government we believe we can produce around 280,000bpd. We are already seeing results, which is quite remarkable considering the long-term nature of the industry.

What are your proposals for the National Development Plan?

We are focused on increasing production through more bid rounds, strengthening PEMEX, having more farm outs, and improving infrastructure. We also stressed the need for government support in terms of engaging communities with social programs. These must also be in line with the president's objectives of simplifying processes and reducing bureaucracy.