What is your current perception of the Mexican energy sector?
The market is expanding rapidly and presenting a lot of promising opportunities for us. We specialize in drilling and infrastructure, including pipelay and platform installation. We also perform hook ups and commissioning of all equipment needed to get the platform up and running. We use drilling fluids for towel termination in order to optimize production. We perform the drilling and aid Pemex on any reworking or maintenance required.
How has the new package for marine infrastructure advanced?
The package was supposed to be awarded in 2018, but it was delayed until February 2019. We won Package A and Package B as part of the consortium. We have already fulfilled our commitments by laying down all the pipelines for both contracts ahead of schedule. Our next task is installing the platforms as soon as we receive them from the fabrication yards. Once installed, we will do all the hook up and commissioning necessary to be fully operational. The project should be completed by March 2020.
What are the key factors to guarantee success in winning these Pemex contracts?
We have been working on various contracts for Pemex for the last 70 years. We have delivered our recent projects well in advance of the due date, thus allowing Pemex to use their facilities ahead of time, which translates to higher returns for Pemex.
What are your main goals when it comes to your Latin American operations?
Currently, we are only focusing on Mexico; we do not have any projects outside of Mexico. That being said, we do have plans to go back to Colombia. Protexa completed its first international pipeline in Colombia in 1966. We plan to reenter the Colombian market in a couple of years because we have our eyes on some interesting projects. The Colombian government is planning to invest USD8 billion in its oil and gas sector in two to three years, and we intend to bid for offshore drilling, pipelines, and platforms. Previously, we did a lot of onshore work in Colombia, laying more than 2,500km of pipeline. Overall, we have laid 4,800km of pipeline across South America.
What strategies do you use to mitigate the risk of late payments from Pemex?
The Mexican market is currently a little volatile, and Pemex is one of the biggest players in the market, which means there is always a risk of late payments. However, we have been managing this risk for years and are willing to continue doing so because this is part of the Mexican oil industry. One thing we are sure of is that Pemex will always be in business. Even if the price of oil declines, Pemex will have a major role to play because the cost of extracting oil in Mexico is lower than in other parts of the world. For example, the cost of extracting one barrel of oil in the North Sea can be three to four times more expensive than the Mexican average. Still, even in Mexico, the price of extracting one barrel of oil varies.
What are some of the other projects that you are currently working on?
Once we are done working on the new packages for marine infrastructure, we will concentrate on finding new projects. Another focus of ours will be increasing the production of light oil in Mexico, which is in line with Pemex's priorities. All our efforts are focused on ensuring Pemex is able to accomplish all its objectives.