José Altonar
Altopetrum & General Oil de México
View from the Top

Diversify to Evolve

Tue, 01/21/2020 - 19:13

Q: How did Altopetrum deal with the industry’s downturn and what is the state of the local companies that prevailed during this time?

A: Altopetrum survived the downturn by diversifying into other segments. In Tabasco, small businesses were particularly at risk and around 30 percent of those involved in oil and gas closed their doors. Surviving was a major challenge and only through diversification was the company able to pull through. The market has recuperated somewhat and with investment to continue Altopetrum will now return to focus exclusively on energy. Around two years ago, Altopetrum made the decision to diversify its services to supply Mexico’s open oil and gas market. We expanded our portfolio of products to include solid control systems, chemical products and drilling tools for rental and sale. We also expanded our specialized consultation teams for the oil and gas industry. In parallel, we began to offer certification training to deliver the international-quality services and guidance that the market required. In the last few months, consulting services have been the main driver of Altopetrum’s business. The repair of drilling equipment also has kept us busy.

Q: What are the challenges facing local service providers in terms of procurement and competition?

A: The local oil and gas industry is moving slowly. The main procurement obstacle is economic. Companies are waiting from 90 to 120 days to be paid for their services, which limits investment opportunities and growth. Altopetrum is a local company and therefore we know the market extremely well and that gives us an advantage. Nevertheless, until payments are expedited more efficiently, companies with larger investment resources will provide a greater contribution to the value chain, and for that reason, we see opportunities on the horizon.