Talanza Energy Consulting

May, 2021

Technology transfer theory and practice and how to overcome Mexico’s impasse

After seven years, oil and gas operators are still confused about how to comply with Training and Technology  Transfer (T&TT) Programs in their Exploration and Production (E&P) Plans (Exploration, Appraisal, and  Development). As a consequence, there are dozens of T&TT programs that are not approved or stucked in  government’s process for approval.

Both ministries, Economy (SE) and Energy (SENER), have not realized that our national oil and gas industry won’t  benefit if E&P companies continue to be forced (through E&P contracts) to act as technology Transferors. Instead,  they should recognize that there could be more benefits if they provide more flexibility to the process and allow  stakeholderstoplay therole that brings morebenefitstothem. In this one-pager, weanalyzethe T&TTfundamentals  and provide some recommendations to overcome the impasse of T&TT in Mexico’s oil and gas sector.

How to overcome the impasse in T&TT

The main reason for the impasse is believing that T&TT process only requires Transferor and Receiver (left-hand  graph). Moreover, operators not owning technology or not benefiting from this process are common obstacles  for T&TT programs in the Mexican model.

To overcome the impasse, we need a T&TT model where all stakeholders benefit from the T&TT process.  Thus, we propose two improvements for Mexican T&TT model that require no legal or regulatory  changes: (1) Including the role of Facilitator (right-hand graph) which can provide support in different  areas like financial, networking, symmetric information, regulatory compliance, among others, and (2)  allowing operators to participate as Receivers, Transferors or Facilitators.

The main flaw of the current model is to consider that T&TT processes are automatic. The government only  sets a contractual obligation for E&P companies (the Transferors) to transfer technology to the National Oil  Company or Mexican research centers (the Receivers). However, there are two main obstacles in this model: (1)  the lack of clear incentives for operators to share their technologies (which could be part of their main  competitive advantage); and (2) Limiting their role the one of Transferor.

The proposed model is more flexible as it allows all stakeholders (operators, PEMEX, Universities, service  companies, etc) to participate as Transferors, Receivers and Facilitators. This flexibility will improve all  T&TT Fundamentals: Stakeholders, Capabilities, Commitments and T&TT Environment. (see definitions at  the section at the margin).

Conclusion and recommendations:

T&TT requirements are not working, and Mexico must make some changes in order to benefit from the activities  of an increasing number of international players in E&P activities (operators and service companies). International  experience is already in place and Mexico can apply it without any further change in regulatory or legal framework.  For instance, allowing operators to play the role of Facilitator or even as a Recipient. Additionally, SENER  and SE can implement mechanisms to improve coordination, communication, and networking, such as a  National T&TT Strategies or Forums like OG21 Forum (Norway) and The North Sea Transition Forum (UK).

To be successful, T&TT must  consider the following  fundamentals:

Five steps for operators to follow during their T&TT processes.

  1. Establish active partnerships between key stakeholders to enhance T&TT  (government, AMEXHI, operators,  receivers, others);
  2. Permanent assessment of T&TT needs;  (receivers, AMEXHI)
  3. Stakeholder participation in the  processes of technology creation,  development and adaptation;  (operators, service companies,  universities, R&D, etc)
  4. Design and implement T&TT plans and  specific actions (AMEXHI, operators,  service companies, universities, R&D,  etc);
  5. Assess and improve actions and plans,  and (operators and service companies)

As an international firm with presence in the U.S.A, Mexico and Colombia, we guide companies in the energy sector towards proper regulatory compliance and we advise governments to design and implement regulations that promote long-term sustainability in said industry.
Born from Canadian and Mexican leaders in the industry, we specialize in quantifying, controlling, and reducing CH4 emissions. As pioneers in Mexico in applying OGI technology, we support the journey towards sustainability of the O&G international industry.