Antonio Villaluenga
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Diversification, Future Outlook Key to Wood’s Strong Performance

By Peter Appleby | Wed, 01/06/2021 - 10:40

Q: How has Wood adapted to the new environment and how have its Mexico projects been affected?

A: All Wood employees are now home-based where possible. We have ensured business continuity on sites, implementing and strictly following increased safety protocols. Although this has been a change and a challenge to the way we do business, execution has remained relatively unchanged for our Mexican operations, thanks to our effective team interaction, as well as the support we receive from our global colleagues at Wood.

Over the past 12 months in Mexico, offshore operations have been very active. Wood is working with several of the operators in this geography. In the early stages of projects, the work is carried out from Wood’s Houston office, with support from local participants for issues regarding regulations, local specifications and expertise.

Activity in fuel terminals has also increased considerably over the last year and Wood is consistently providing expertise and developing storage terminals for clients in Mexico. One such terminal is located offshore in the Gulf of Mexico, and we have also been carrying out construction engineering and site selection for an onshore facility.

We are also turning our focus to major projects we know are coming to Mexico, including upcoming LNG projects. We have trusted partnerships with some of these clients working on LNG projects and hope to strengthen these relationships as these their projects move forward in Mexico. We have been providing engineering expertise for the supervision from our Houston office and will move to Mexico once activities begin on the jobsite. We feel we have a strong reputation in Mexico, as a result, we are diversifying and moving into both the mining and chemical sectors in the region. Despite the pandemic, activity in Mexico has been very busy for us with ample opportunity in these areas.

 

Q: How did Wood achieve its solid 1H20 performance amid the crisis?

A: There was an initial reduction in overall project activity as companies reevaluated investments in light of COVID-19. Nevertheless, the major change we made, and the important factor behind our 1H20 performance, was in diversification. When Wood bought Amec Foster Wheeler, it did so with the idea of diversifying its portfolio. More than two-thirds of Wood’s revenue prior to the Amec Foster Wheeler purchase came from oil and gas, and the majority of that was from upstream. With Amec Foster Wheeler, strong downstream experience was added, including expertise in digital technologies. This offered a more diverse portfolio that enabled us to continue operating successfully despite the suspension in oil and gas investment activity. We have been focused on the renewables sector to enable the energy transition. We are also involved in the chemicals sector and have a pharmaceutical focus in Mexico too. This pharmaceutical sector is seeing increased investment due to the nature of the current crisis.

 

Q: How can Wood apply its renown for technological innovation to Mexico?

A: One of the main advantages for us is having the ability to bring knowledge from the operational side of the company together with advisory, design and execution expertise.

Another advantage is our experience with digital twin technology, which is used during the engineering stages of projects to ensure there are no faults. The digital twin can also help with optimization of the design and CAPEX estimations for the facility over its lifecycle, among many other necessary information points. Using our own technology for the maintenance of platforms, we can advise the client in terms of optimization through predictive, preventative, or corrective maintenance. Optimizations can be implemented from the very beginning of the design via the digital twin.

 

Q: How is Wood approaching the energy transition in regard to Mexico?

A: From onshore and offshore wind, to solar and hydrogen, we have a long history and expertise in renewables. This expertise and the relationships with the power generation sector are advantageous. In the US, we work on many EPC projects for wind farms and solar plants, while in Mexico we are beginning to work on site selection and technical packages to help alternative power generators access finance.

We are also involved in tidal generation and waste-to-energy technologies, including the ownership and operations of facilities in Europe. In Mexico, we are looking to expand into the waste-to-energy sector.

Globally, we provide consultancy and management for carbon capture projects. This might not happen in Mexico in the short term, but it will be ready and deployed when policy or the demand mounts domestically. Oil and gas will undoubtedly be the focal point for Mexico for the short-term, but Wood expertise can be tapped for Mexico’s energy transition.

 

Q: Where does Wood see opportunity in Mexico?

A: I believe that the expansion of the refining sector in Mexico, in addition to the Dos Bocas refinery, should be a goal for the country. Any large investment that can produce the final product, the associated job creation and cluster of companies around the refineries will be positive for the country. When the government came to power, it talked not only of one refinery but two, and we hope that in the future a second refinery may be realized. The revitalization of the other six refineries is also important and this is an area where Wood can offer its expertise.

The other opportunity we see is in nontraditional oil. Several shallow water and deepwater licenses have produced good results from exploration but there is a clear opportunity for Mexico in nontraditional oil considering the West Texas Basin stretching south of the border.

 

Q: How is Wood continuing to support Mexico’s offshore players?

A: Wood’s consulting business offers world-class subsea solutions. Right now, we are working on some deepwater route definitions for a pipeline from an offshore field to ashore. This is a very specialized form of engineering. We can consult on everything, from the early stages, to the project’s completion. For example, we have helped a group of private international oil companies to create baseline guidance on environmental regulation for its members in the past. For PEMEX, we have reviewed regulation from drilling and exploration to maintenance and reliability. This included interaction with CNH and SENER.

On this branch of projects, we are providing conception engineering right through to the start-up of a facility. We have begun to work on the basic engineering for a new platform, which is now in Phase 2. In addition, our operations business provides specialized solutions to full operation and maintenance services for offshore and onshore.

 

Wood is a global leader in engineering and consultancy across energy and the built environment, helping to unlock solutions to some of the world’s most critical challenges. Wood provides consulting, projects and operations solutions in more than 60 countries, employing around 45,000 people.

Peter Appleby Peter Appleby Journalist and Industry Analyst