What is Nabors’ position in the market?

Nabors is a drilling contractor and a leading provider of drilling rigs with a presence in 25 countries. The company operates nearly 300 land drilling rigs in the United States, 65 in Canada, and an additional 140 rigs internationally. Nabors has a significant presence in Saudi Arabia, Algeria, Argentina, Colombia, and Mexico. Nabors also owns Ryan Directional Drilling Services, which provides services in the Americas, as well as Superior Well Services, a business focused on high-pressure pumping in the production and completion portfolio. The company also has over 500 conditioning platforms in the US and Canrig Drilling Technology, which specializes in integrating and automating drilling rig equipment through proprietary engineering and software applications, with more than 90% of Nabors’ rigs featuring Canrig technologies.

What opportunities do you see in Mexico?

In Mexico, Nabors has seven modular offshore drilling rigs and had six onshore rigs until 2014. However, due to community problems and budget limitations at Pemex, the number of onshore rigs has dropped to less than 30. Nabors is currently constructing two modular offshore rigs with 3,000 hydraulic horsepower, which will have the largest installed power on modular rigs to date. The Mexican market is active both onshore and offshore, with Pemex having deepwater and shallow water rigs. There are four deepwater rigs and three additional semi-submersible rigs in the deepwater, while there are between 50 and 60 self-elevating rigs in shallow water. Nabors is the main player in modular offshore drilling rigs, operating seven of the 21 rigs currently in use.

How will the energy reform change the landscape for service companies?

The energy reform has progressed well, and most milestones have been achieved according to the schedule. The reform is a significant event, as the exploitation of natural resources will be open to multiple players, although resources will remain state-owned. This will be a turning point for service providers. The growth rate may be lower in gas if the availability of cheap gas from the United States persists, but there is already an increase in activity in oil. Another factor that will change the future is unconventional reservoirs. The Eagle Ford formation has a natural extension in northern Mexico, and the level of investment will depend on safety, local logistics, and infrastructure. There is also some complexity due to the relationship between the regulatory body (CNH) and Pemex, but in any case, Mexico’s hydrocarbon industry will experience significant growth in the coming years, and its evolution will depend on these external factors.

What advantage does Nabors have as a company already present in Mexico?

The Mexican gas and oil industry has been a significant source of GDP and national pride. Most service companies have had to adopt a distinctive local approach to ensure their success and alignment with Pemex. Therefore, understanding local regulations and customs and having a local workforce are critical to achieving success. Nabors is well-positioned because the company has learned to adapt and is valued by Pemex as one of the contractors with the best rig performance. The barriers to entry may decrease as new licensing rounds are completed. However, to be a long-term partner of Pemex, one must be able to face the ups and downs. In other words, companies should allocate sufficient resources to Mexico, regardless of how profitable the business is north of the border in the United States.