LUIS VÁZQUEZ SENTÍES

Mexico 2020 | ENERGY | INTERVIEW

Diavaz's activities are related to the Mexican energy industry, ranging from oil and gas exploration and production, to processing, transportation, and storage until its final consumption.

Luis Vázquez Sentíes
BIOGRAPHY

Luis Vázquez Santíes is the founder and member of the board of directors of Diavaz since 1982. He has been and still is an advisor of several national and international companies, all of them related to the energy industry. Vázquez actively participates in a wide variety of chambers, associations, as well as professional and entrepreneurial organizations. He is chairman of the Mexican Natural Gas Association and former president and current member of Mexico's Chapter of the World Energy Council. Vázquez is a chemical engineer; he graduated from Ryerson University in Toronto.

What is your overall perception of the health of the oil and gas industry considering we have an administration with a new vision for the sector?
Diavaz has been in business for 46 years so we are used to seeing new administrations. In this case, we had energy reforms in 2013. But the current president of Mexico does not like these reforms because production has not peaked. Diavaz has four fields. Right now, we are producing around 20,000bpd. We are the second-largest producer of hydrocarbons in Mexico. In the US and Mexico, there are companies that have already started drilling offshore, which is exciting. We hope the president will realize we need new blocks to be built with the involvement of the private sector. We have told the president that, at the end of the six-year period of the current administration, the oil industry will produce about 280,000bpd minimum. I believe it will be slightly more, maybe 320,000-330,000bpd. As for our own production, we will produce between 50,000 and 60,000bpd, which is a tripling of our production.

What have been the advancements in the four fields that Diavaz operates and how do you plan to expand your production in these fields?
We have two small fields: the Barcodón block in Tamaulipas and the Catedral gas field in Chiapas. The positive thing about the Catedral field is that Chiapas needs the gas. We are drilling two wells at the Barcodón oil field. At Ebano oil field in the northwest, we hope to deliver around 15,000bpd. We got the approval in mid-2019. We will start drilling at Ebano in the last trimester of 2019, and I expect that program to carry on for two or three years.

What does the country need to improve its gas infrastructure?
One of the things we have to do is convince the government that gas is important; it industrializes the country. The most industrialized city in Mexico is Monterrey because it started producing natural gas in 1930. Another example is Guanajuato State, with places like León, which is one of the most industrialized regions in Mexico. It started producing gas 25 years ago. And that area has the petrochemicals industry. The president is trying to increase investment in the southeast in places such as Tabasco, Chiapas, and Oaxaca. Out of the 32 states we have in Mexico, 20 have natural gas. We need to have natural gas in all 32 states.

Does Mexico need new refineries?
One factor is that we must have a balance. There is no way a country can import 80% of its gas. Even if it is not a good business, or it is not as attractive as some other areas, we need some refineries. There are six right now. Pemex is trying to modernize its refineries to start producing more, and I hope it is successful. Overall, it will ultimately benefit the country. I was at Dos Bocas recently and there was a great deal of activity there. Building a new oil refinery will increase productivity and activity in Tabasco. It will be better for people in the area around Dos Bocas.

Which of your projects is the highest priority for the company at the moment?
The priority is to start increasing production in the four fields we have where we are producing oil and gas. However, we also have two fields, Cuervito and Fronterizo, where we only provide services. We signed a multiple services contract with Pemex for these two fields in 2001-2002. We are like an exploration and production company, but we get paid for the services we provide rather than for the increases in production or reserves. We hope that in a year or two we can talk to the president about pre- and post-energy reforms as a Mexican company that has two different ways of working—as a service contractor and as a producer.