Luis Ferrán Arroyo
Director General
The Mudlogging Company
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View from the Top

Drivers of Competitiveness in a Changing Market

Wed, 01/22/2014 - 13:59

Q: How did your time as President of AMESPAC help you to enhance The Mudlogging Company’s competitiveness as a service provider?

A: AMESPAC (Mexican Association for Petroleum Service Companies) gave me crucial exposure to what was happening in the industry. In my capacity as President, I interacted closely with many industry experts and liaised with top officials at PEMEX, the Ministry of Finance, the Treasury and SENER, as well as Congress. This insight into industry trends, at the macro and micro levels, was extremely valuable as it allowed me to discover the needs of the different segments of the Mexican oil and gas industry. I saw how incoming challenges would shape these needs in a variety of ways. Naturally, this information has reflected my actions since entering The Mudlogging Company.

Q: How has The Mudlogging Company adapted to a changing market?

A: Our strategy has changed over time, according to market developments. Although a company cannot move much faster than the pace of events taking place in Mexico, it must be able to anticipate those changes and adjust accordingly. The main internal change for us has been the knowledge that we will no longer have just one client in Mexico. Accordingly, from 2012 on, we began diversifying our client portfolio to include private operators such as Petrofac and Tecpetrol. Our idea is to adapt to the gradual increase of private companies entering the market, but without disregarding PEMEX. It will continue to be the dominant operator and our main client so we will continue to devote enough resources to its different teams.

Q: What describes the competitive positioning of The Mudlogging Company in the market?

A: Companies can either be a technology follower or a technology creator. For practical reasons, we have mainly been a technology follower while securing alliances with technology creators to have the best solutions available. This decision was made so that The Mudlogging Company could continue being an industry leader, while maintaining its profit margins and offering cutting-edge technology. But a problem arose as it is difficult to find the right technology to face particular Mexican challenges. Therefore, we are also trying to keep creating and developing our own technology. We are now operating in both worlds by first being a technology follower and now a technology developer. We consider ourselves self-sufficient in our role as technology creator, which is why we have not yet bid for CONACYT-SENER Hydrocarbon Fund projects. However, we would like to expand our alliances with international service companies to harness new technologies, both for mud logging and related services. Creating our own technology does not mean we can forsake our role as a good service provider.

Q: As new companies approach the Mexican market, the competition for talent will intensify. How do you plan to stay a step ahead in attracting new talent, and retaining your own?

A: To take our training one step further, we have struck agreements with universities to develop short postgraduate courses for our staff and their students. The scope of these agreements provides us with the opportunity of spotting technicians and engineers early on in their training, and open up our facilities so they can truly soak in what is going on in the industry. In return, we expect some reciprocity in becoming an attractive place for them to work after graduation. The competition for talent will be a difficult battle to fight, although we have faced this threat before. We knew that around half the people we hired would end up going to PEMEX, we were essentially acting as a training course for them. We are now facing the same threat but magnified as we compete against the likes of Shell, ExxonMobil, Total, and BP. This is why we need to establish solid systems to retain people and recognize their seniority, through economic compensation and long-term career programs. It will be a difficult battle to wage, since those international companies already have established programs to evaluate talent and develop it. One advantage we may have is that not every talented youngster speaks English. Those companies are looking for good engineers who speak English, while we base our strategy purely on knowledge and aptitudes, so English is not required. This is also the main reason why we established long-term agreements with universities: to be at the top of the wish list of young talents when they choose their first job.