Key Energy looking at Latin American expansion

Houston-based onshore service company Key Energy Services is looking at developing new activities in Latin America beyond its current operations in Argentina and Mexico, Key president and CEO Dick Alario said, according to a transcript of a presentation. "We have business development activities both in the Middle East in addition to Russia, Canada and other places in Latin America. I can't tell you that tomorrow we'll be active in any of those places, but if we have the same kind of success we had in Mexico, and I think we can duplicate that, it won't be too long before we'll be able to put another flag up," Alario said. One factor that may make Latin America attractive compared to the Middle East is that the firm would have to spend a considerable amount of money to prepare a US rig to work in the desert. Bringing a US rig to the Middle East thus would probably not be feasible and the company would need either newly built equipment or to purchase local equipment. "Latin America may not be quite as different in terms of the kind of equipment that's needed," Alario said. However, some Latin American countries have very restrictive rules about sending used equipment to carry out services. The company spent "a great deal of cash" to improve equipment in Argentina over the past 2.5-3 years. "As a result, we're able to sustain that marketplace even though it's not the strongest place in the world at this point," Alario said. Alario was speaking at the 2009 Credit Suisse Group Energy Summit in Vail, Colorado.