Robert Gordon University (RGU) has begun working with the Mexican oil and gas industry on behalf of the UK government to build a skills development framework. For decades Mexico’s oil and gas industry has been state-run and there have been no new sales of exploration and extraction licenses for 15 years, leaving its sector underdeveloped.
Now as Mexico embarks on a new energy phase, the country has looked to the UK’s oil and gas industry for advice before opening up previously untapped resources. Thousands more skilled workers will be needed to plan, build and operate new oil and gas projects, and Aberdeen’s RGU is in place to advise Mexico’s Ministry of Energy on the best training initiatives.
Here, the director of RGU’s Oil and Gas Institute Professor Paul de Leeuw explains how the partnership came about, what challenges Mexico will face and just how great the benefits of this partnership could be.
Molly Lempriere: What led RGU to collaborate with the Secretariat of Energy for Mexico?
Paul de Leeuw: In March 2015 the UK hosted a state visit for the President of Mexico and as part of that visit Robert Gordon University was honoured to host the president and his delegation at our campus in Aberdeen. After the state visit, RGU was invited to visit Mexico and to deliver a number of guest lectures. RGU representatives visited Mexico City in September 2015 and it was at this point we signed the memorandum of understanding (MoU) between the Ministry of Energy in Mexico and RGU.
The MoU is wide-ranging and provides RGU [with] the opportunity to use its experience to benefit the Mexican oil and gas industry. The Skills Development Project we are currently undertaking in Mexico is just one of the activities which have emerged from the MoU. The MoU also provides the opportunity for Mexican students to study at RGU.
ML: How has the skills development programme been implemented and how will it work?
PdL: Mexico has opened up its oil and gas industry on the back of energy reform introduced in 2013. Energy reform enables the transition from a state-controlled and managed industry to a far more liberalised market. The overall target is to increase production to over four million barrels of oil equivalent per day by 2030. This means that Mexico has to develop new production equivalent to what the North Sea is currently producing.
RGU has considerable experience in supporting countries to understand the skills and capabilities required to develop an oil and gas industry. We’ve been working in partnership with the Ministry of Energy in Mexico and the UK Embassy in Mexico City since July 2016 to progress the Skills Development Project.
To unlock the new oil and gas potential in Mexico, significant new skills and capabilities are required to support the industry. RGU estimates that around 114,000 new professionals at both graduate and vocational level will be required to deliver the ambitious agenda in Mexico. Specific recommendations on how to create these new capabilities have been developed and implementation is planned for 2017/18.
ML: A lot of RGU’s experience is in the North Sea. How similar is are these conditions to those faced by the Mexican oil industry?
PdL: The energy reform introduced in Mexico in 2013 envisaged a significant transformation of the offshore oil and gas industry, with a particular focus on new offshore developments. The UK and North Sea experience is particularly relevant given our track record and capabilities in areas such as deep water, subsea, supply chain, innovation and technology.
Not only is there an opportunity to share technical experiences; Mexico is also seeking insights on good practices in terms of policy, regulation and overall industry governance. With some of the world-class oil and gas industry practices developed in the North Sea, the UK is well positioned to assist Mexico in developing the overall governance of the industry.
ML: Oil production in Mexico has fallen a lot since the 1980s. Will this trend continue or will market liberalisation change things?
PdL: The overall oil and gas production in Mexico has declined significantly over the last few decades. Mexico has been relying on production from a few very large fields, which unfortunately have declined over recent years. This is rather similar to what happened here in the North Sea during the 1980s/1990s, with production in the North Sea relying on contributions from fields such Forties, Brent, Statfjord and Magnus.
Energy reform in Mexico is aimed at reversing this decline by getting new companies, new capital, new ideas and new technology into the Mexican oil and gas industry. Similar to the evolution in the North Sea, I would expect that Mexico will see more deep water fields, more tie-backs to existing fields, more subsea developments and an acceleration of technology applications.
I also think there is an opportunity to create different business and supply chain models in Mexico, particularly with new companies coming in and taking over activities from PEMEX, the Mexican state oil company.
ML: Are your recommendations based around that transition?
PdL: From our review, we forecast that Mexico will require an additional 114,000 people both at graduate (around 38,000) and vocational level (around 76,000) to support the industry and to develop, operate and maintain the two million barrels of oil equivalent per day of additional production by 2030. Our recommendations are focused on how to develop these skills and capabilities and to share how the UK system supports the development of skills for this industry.
We are also recommending that the regulators, ministries and government agencies are set up for success to provide appropriate governance for the industry.
ML: What does the UK get out of a partnership like this?
PdL: Robert Gordon University was funded by the UK’s Foreign and Commonwealth Office to undertake this six-month project. It is clear from the findings of the report that the UK has a significant role to play in supporting the oil and gas developments in Mexico. A number of UK operators have already secured offshore licences in Mexico and there will be a substantial opportunity for UK supply chain companies. There will also be great opportunities to exchange good practices in areas such as HSE, policy development and offshore regulation.
Organisations such as the Department of International Trade, Scottish Development International, the British Chamber of Commerce, Subsea UK and others are already actively promoting the UK’s capabilities and are providing guidance to supply chain companies on doing business in Mexico.
From an education sector perspective, the UK has world-class universities and vocational institutes and developed unique capabilities, and therefore will be well positioned to support Mexico to achieve its ambitious target of over four million barrels of oil equivalent per day by 2030. A number of Mexican students are already studying in the UK in a variety of technical to business disciplines. It is certainly an aim to significantly increase the number of Mexican students coming to the UK.
ML: Do you think policies like this are particularly important post-Brexit, given the concern about international partnerships?
PdL: The oil and gas industry is a very international business and is used to dealing with uncertainty. The UK has developed some unique capabilities and ‘maximising economic recovery’ is probably our biggest export product. Despite the Brexit complexities, I do think there is a genuine opportunity for the UK to leverage our technology, innovation, and creative thinking on how to develop and manage mature basins and how to leverage the skills and capabilities in the supply chain.
It is no surprise that wherever you go around the world in the oil and gas industry, you will hear a Scottish or English accent. The experiences gained in the UKCS are truly applicable internationally.