Sergio Saldivar
General Manager Mexico
Amec Foster Wheeler

EPC Company Strengthens Its Operational Scope

Wed, 01/21/2015 - 14:17

For Amec Foster Wheeler, the past year has presented some critical changes that have opened the door for future opportunities. According to Sergio Saldivar, General Manager Mexico of Amec Foster Wheeler, the acquisition of the Mexican engineering and project management firm NorthAm Engineering in June 2013 could not have come at a better time. “Our business was primarily focused on engineering but we are now a full EPC contractor,” he shares. Since then, Amec completed the takeover of Foster Wheeler which resulted in the creation of Amec Foster Wheeler, a technology-driven company that has carried out a large number of reconfiguration projects for PEMEX.

Like most companies, Amec Foster Wheeler is now examining the areas of opportunity brought about by the Energy Reform. “The spectrum is huge and we are well aware that we cannot tackle everything, so we decided to focus on our strengths,” tells Saldivar. While his company is keen to continue executing engineering projects in the upstream segment, there has been little activity from PEMEX in this area. This is due, in part, to the productive enterprise of the state still waiting for the results of the contracting rounds, as well as for the precise budget to be announced. “Even though we are still interested in participating in Mexico’s upstream market, 90% of our current backlog is related to downstream where we are working on four out of our six main projects,” details Saldivar. Amec Foster Wheeler is carrying out engineering work for Cobra Energy at Cadereyta and EPC at Salina Cruz, and is supervising at Madera and Salamanca, which highlights the company’s current focus on the downstream segment. “We have always told PEMEX that we are here for the long run,” states Saldivar. “We are now really materializing this ambition, since these projects last three or four years each.”

Amec Foster Wheeler also seeks to take advantage of its reputation in order to enter into upstream projects with newcomers, as well as to leverage its business relations in shale and offshore activities. The company has been successful in US shale plays over the past three years, as it has worked with ConocoPhillips and other independent operators. The company now expects to replicate this success in Mexico’s shale developments. However, this interest in participating in Mexico’s shale development does not shake the company’s continued focus on offshore activities, such as deepwater projects. “The fact that we already have collaboration agreements with the international players that are entering the industry and making investments over the coming years, gives us an advantage over other companies,” asserts Saldivar. To successfully execute Amec Foster Wheeler’s planned projects, Saldivar says the company is adapting its human resources, infrastructure, and systems to cater to the different league in which it is now playing. The company plans to grow its team from 500 people to well over 1,000 in Mexico. This will not be easy, but, if done properly, Saldivar is certain that it will enhance trust among investors and clients. The company has already been looking as far afield as Houston and Venezuela to capture professionals, but, in Saldivar’s experience, finding engineers and technical professionals has proved to be a continuous struggle. “PEMEX awarded over US$7.5 billion in contracts in the Mexican downstream market in just two months during early 2015. These projects will require ongoing engineering efforts for up to 24 consecutive months, which translates into a huge number of man hours that need to be covered,” he explains.

The recent slowdown in the development of the Mexican oil and gas industry has bought Amec Foster Wheeler some time. Even once the fields tendered in Round One are assigned, there will be a considerable amount of time before the chosen operators start to fully need the company’s services. “By that point, the downstream contracts we have with PEMEX will be winding down, which will enable us to use our skilled workforce to take on upstream projects. By combining the capabilities of Amec and Foster Wheeler to serve the oil and gas industry, our competitors might be in for a big surprise,” says Saldivar. These opportunities lead Saldivar to a firm belief that the face of Amec Foster Wheeler will be completely different by 2016. “The company will be well on its way to becoming one of the top EPC contractors in the Mexican oil and gas industry by then,” he states. Once this objective is attained, Amec Foster Wheeler is planning to expand to South and Central America, while also looking for opportunities in sectors outside the oil and gas industry