Continuing Recovery of Maritime Sector

Q: Which opportunity resulted in the creation of Integra Consulting and what differentiates your value proposition for the maritime sector?

A: Integra Consulting (Integra) offers various services to the oil and gas, maritime, and port industries, which are destined to strongly benefit from foreign and domestic companies venturing into the Mexican market following the Energy Reform. Founded in October 2011, Integra has developed a diversified portfolio of services for maritime shipping, maritime and port advisory, brokerage activities, procurement services, and the recruitment and outsourcing of staff. Our strategic alliances with other companies in the sector have enabled us to provide these services to foreign companies. Our clients look to us to handle their legal, fiscal, and logistical affairs, while providing operational advisory services for ships and drilling equipment.

Q: What have been the main trends in Ciudad del Carmen’s maritime market in the last few years?

A: Ten years ago, the market was buoyant, the total number of ships in the area’s fleet stood at around 400, and a conventional 54m supply vessel that was not from the latest generation could net a daily rent of between US$6,000- 6,300. Since then, the number of ships has remained stagnant, fluctuating between 350-400 vessels. Between 2010 and 2012, due to economic difficulties highlighted by a dramatic downturn, many vessels were anchored in port in the absence of contracts. The existing contracts only served to balance out the operating costs of the vessels and little profits were being derived. There were no possibilities for companies to compete based on value since there were so many vessels available. The only alternative left was to reduce costs. Although the market has not entirely recovered to where it stood ten years ago, it has recently started picking up. Daily rents dropped to around US$4,700 before climbing back up to US$5,300 in 2014, which shows the recovery is not complete. PEMEX’s recent budget cuts and the suspension of certain contracts have seen costs and rates reduced, which has had a direct impact on shipping companies. I believe the recovery of the market now stands at around 60%, and the shipping industry will probably recover in the first semester of 2016. A problem we still face in this sector is the competitiveness of vessels. For example, we see that some customers demand vessels with certain requirements, such as a FIFI (Fire Fighting) 2 rating, but these standards are not commonplace and the rates remain low. In this scenario, vessels cannot maintain their operating costs and therefore cannot compete.

Q: How is PEMEX’s gradual shift to fields located at greater distances from Ciudad del Carmen affecting the offshore services companies?

A: As operations move to locations that are farther from Ciudad del Carmen, such as Tuxpan or Tampico, companies will not be able to maintain the same operating base. The increased distances will impact fuel costs, among other factors. Companies will have to find alternative ports in the north in order to reduce distances and costs in supplying PEMEX’s deepwater activities. It is certain that PEMEX, as a productive enterprise of the state, will try to reduce its costs by maintaining operating bases in close proximity to its activities. I do not see Ciudad del Carmen dropping in importance since it will still cater to PEMEX’s traditional fields. It may lose some of its allure but Integra will remain here while diversifying into other regions.

Q: What opportunities do you anticipate for offshore companies as a result of the Energy Reform?

A: These business opportunities will benefit the drilling companies most. What they gain will depend on the resources they invest. Smaller companies that offer services to the drilling industry, such as catering, human resources, logistics, and technological equipment will also be facing new business opportunities. This is especially true for technology companies that will find more customers willing to pay for innovations. Especially in deepwater, innovative technologies will have an impact on the Mexican market. However, we cannot ignore the low price of oil. This puts us in a very difficult position since companies ask themselves if they should invest at all. We will have to overcome this obstacle and wait for the market to recover. Currently, I believe the best bet to service the drilling market is through vessels that focus on processes, such as mud vessels, well stimulation vessels, or FPSOs. Regardless of budget cuts and low oil prices, these vessels must continue their work for oil production to continue at all.