A north-east drilling technology business has announced an initial $5m investment in Mexico as the country’s President visited Aberdeen to establish greater links between the two oil-producing regions.
President Enrique Peña Nieto’s arrival in Aberdeen, as part of an official state visit to the UK, has stimulated interest from the oil and gas industry in developing opportunities for investors within the emerging Mexican market, particularly in light of the country’s recent energy reforms.
Paradigm Drilling Services this week finalised the establishment of a new Mexican subsidiary, Paradigm Drilling Services Mexico, in Veracruz on the Gulf of Mexico, and is currently looking for premises to locate a large manufacturing and service facility in the city to support its operations. The new operation is expected to create around 15 jobs by the end of the year with more to follow.
The company has also announced it has won an initial $500,000 contract in the region with an international oilfield services business for the supply of rental equipment in support of an operator’s drilling operations. This is the first of a number of significant contracts the company has tendered for.
Paradigm Drilling Services is targeting turnover of £10m in 2015 – a projected rise of 54% on its December 2014 year-end run rate of £6.5m. The company employs 52 people and plans to recruit an additional 10 locally in the next six months.
Mexico is the world’s ninth largest oil producer and aims to become one of the top five economies by 2050. The country’s 2014 Energy Reform Programme allowed private firms to invest in the state-owned energy industry, Pemex, for the first time in 75 years – a move described as the biggest economic breakthrough in the country in the past two decades.
Fraser Innes, Managing Director of Paradigm Drilling Services, said: “We are delighted to announce this next step in the development of our company. The Mexican market presents opportunities for proactive companies and we are extremely excited about the growth potential of the new operation in Veracruz.”
Mr Peña Nieto met with the Queen and Prime Minister David Cameron for talks in London. During his visit to Aberdeen, the President signed an energy collaboration agreement with North Sea leaders and visited the Robert Gordon University.
An Aberdeen and Grampian Chamber of Commerce event for the oil and gas industry was also held at the Aberdeen Douglas Hotel with speakers from the Mexican Government, the country’s National Hydrocarbons Commission and the country’s state-owned oil company PEMEX, as well as representatives from BP, Shell and Wood Group.
Paradigm Drilling Services operates from a 40,000 sq ft facility at Thainstone, near Inverurie, and plans to open another large facility in Aberdeen to accommodate its drilling tools and research and development (R&D) functions.
Paradigm recently secured an initial £5m injection from new investment partners – Buckthorn Partners and Saudi Aramco Energy Ventures (SAEV), the corporate venturing subsidiary of Saudi Aramco – which will fuel Paradigm’s strategy to broaden its product portfolio, extend its geographical activity and bolster its R&D activities, in particular its Horizontal Drilling System.
Established in 2009, Paradigm designs, manufactures, sells and rents a number of new generation drilling and intervention technologies, used both in the conventional and unconventional oil and gas sectors. Paradigm forms part of the Paradigm Group, a corporate entity established in the Netherlands in 2009 to develop new generation oil and gas technologies.