What niche does Sproule occupy within the international oil and gas sector?

Sproule is a private oil consulting and advisory firm that has been in the market for 63 years. It has 130 employees, including geophysicists, geologists, engineers, and economists. Our key expertise lies in reserves and resource evaluations, control and evaluation advisory, and deposit studies. We also have extensive active experience in courts and a training branch, the Sproule Academy. Our main operational base is in Calgary, but we have a representation in Bogotá for work in Latin America, including Mexico. We recently opened another office in Brisbane to serve the Asia-Pacific client base. However, most of the work is coordinated from the Calgary headquarters.

What interest do you have in following the Mexican gas and oil reforms?

The opening of the Mexican gas and oil industry after more than 70 years represents a series of opportunities for foreign companies; however, the initial explorations will be in the sea and in unconventional shale basins, which are more suitable for larger companies. In Canada, there are hundreds of gas and oil companies, but most are small, with fewer than ten employees, and the actions in Mexico’s deep waters and shale require investments from companies with more funds. That said, mature fields represent a good opportunity for smaller companies to partner with Pemex or even take care of some existing fields alone.

It is expected that the Burgos Basin and its unconventional resources can attract Canadian experience and technology. Pemex has drilled some wells in the basin, but without economic results. Is it too early to understand the existing opportunities in these deposits?

There is not much information about the Burgos Basin to indicate the real potential. It will probably take a few years of data collection before any commercial action is seen in these places. Currently, the calculated amount of shale reserves is based on other similar basins, as well as the volume of rocks. The figure of 60 billion barrels that Pemex claims to be in the basin is a potential reserve, not a reserve.

From your point of view, is it still an interesting opportunity?

From a resource perspective, it is always interesting when there is such a large area undeveloped, as the potential is enormous. In the case of Mexico, this interest is tempered by uncertainty about the fiscal conditions of the new contracts. Mexico has to put some very competitive terms to attract the necessary capital to exploit these sites; the potential of shale alone, without favorable fiscal conditions, is not enough to interest gas and oil companies.

The current recovery factor in the Chicontopec heavy oil basin is around 4%. How can companies reverse this trend in existing wells with such low recovery factors?

One of the main ways to increase the recovery factor in a heavy oil field is infill drilling, but this requires capital. Often, the recovery of a field can be improved just by drilling closer wells. The deposit may require additional energy, such as water flooding or polymer flooding to push oil to the producing wells. Again, the economic factor of these methods is an important issue, and many studies must be done before starting any remodeling.

If Mexico manages to produce three million barrels per day by 2018, what would be the consequences for the Canadian economy?

The gas and oil sector is a global market; regardless of location, if there is an increase in supply, the price of a barrel will fall. Some OPEC countries are trying to increase their market share by lowering the price of oil; this will inevitably have an impact on the production of heavy oil. Once Mexico increases production in its heavy oil fields, it is likely that the price of oil will decrease, affecting Canadian production.

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