This year, Expert Petroleum celebrates its 10th anniversary. In our short discussion, David Martinon, CEO and co-founder of the company, stressed the main competitive advantages and differentiators of Expert Petroleum, the key lessons learnt over the years and the ambitions for the future.
10 years ago you co-founded with Michel Louboutin Expert Petroleum in Romania, why here and what was the vision then?
At the time, Michel and I, with our combined 35 years of Schlumberger experience, came to the realization that the Production Enhancement services market and mature assets rehabilitation needed a new approach:
- First, to be fully aligned with the reserves and Concessions’ owner, we needed to be independent of proprietary technology and instead, have access to fit-for-purpose services from local providers and technologies from around the world.
- Second, we needed to assume the Capex and Opex risks and part of the reward without the requirement to take and book the reserves.
- Third, we needed to take over and manage the employees operating the assets to transform, optimize, and incentivize the whole organization in order to ensure a longer economical life of the fields.
Based on our historical track record in Production Enhancement in Romania, the potential for growth in the country, and the unique O&G capabilities of Romanians, it was obvious for us to incorporate the company in Romania (Targu Mures) and create a HUB of excellence to serve Romanian and international operations.
Reflecting back on the last 10 years of operations what were the key lessons learnt?
“The devil is in the details”: To enhance brownfields’ production, you have to combine a long-term, big-picture rehabilitation plan with detailed local inputs from the production operators who have been operating the fields for many years. Empowering actions, initiatives and responsibilities from the field operators brings highly valuable opportunities.
Another key lesson learnt is that it is important that the shareholder structure be in accordance with the required patience and culture that the production enhancement requires. We initially had a US O&G Private Equity firm on board along with our Family-owned shareholder. Private Equity firms typically have to exit after five to seven years investment; how could this be compatible with a 15+10 years production enhancement contract, which has also a strong long term social component to it? It is not. The lack of alignment of those shareholders with the economic cycle of the firm actually made things difficult and risky, which is why we bought back the Private Equity shares shortly after having been awarded a large Production Enhancement contract. This gives us today a much stronger and more stable foundation with a sustainable and long term view to our business.
Finally we have demonstrated over the last 10 years that enhancing QHSE performances, and caring about the local communities where we operate, are crucial factors in the success of our business.
What makes Expert Petroleum different and competitive today?
I can see three main competitive advantages and differentiators:
- First of all, Expert Petroleum is a hybrid between a traditional oilfield service company and an E&P company: On one side we have a service approach and culture as we get paid a monthly fee for a baseline production and another fee for the incremental production we generate and we do not book reserves; On the other side, we operate like an E&P company: We employ all the local personnel who operate the field, and we invest our own financial resources in Capex and Opex to reduce field operating costs and maximize production and reserves.
- Second of all, we are an extremely lean organization which only focuses on mature asset rehabilitation as we believe this is the only way brownfield production can be enhanced economically while keeping the quality of the operations at international standards.
- Finally being a family-owned company, we have a very long term view on the business, and we take great care to ensure our operations benefit the local community around.
Moving forward what are your ambitions?
Now more than ever, with the current oil price environment, there is urgent need to operate mature and marginal Oil and Gas fields in a very efficient way to ensure they stay economical. This can only be achieved by having a dedicated lean organization which can afford to invest and manage on behalf of the resources and concessions holders the fields, in order to enhance the QHSE performances, reduce the field operating costs and maximize the production and reserves. We want to be this organization and the partner of choice for the brownfield resource’s owners.
In order to do so we have been developing over the years a Center of Excellence in Romania with our Romanian team in order to grow and offer our unique capabilities not only in Romania but internationally. Our Center of Excellence themes are:
- Green operations and energy efficiency;
- IOR/EOR methods;
- Reservoir stimulation and sand and water control;
- Flow assurance and chemical management optimization;
- Production facilities processes rationalization and automation;
- Stranded gas solution.
We believe Expert Petroleum has all what it takes to succeed and continue its growth in the next years in Romania and internationally.