Local Expertise, ESG to Face Industry Hurdles: WTS Energy

Q: How has WTS Energy adapted its strategies to successfully enter and expand in the Mexican oil and gas market?

A: WTS began operations in Mexico in August 2016, marking 2024 as our eighth year in the industry. Initially, we focused on outsourcing administration, project management and specialized recruitment, primarily within the oil and gas sector. Due to the Energy Reform of 2013, the Oil & Gas market in Mexico was opened to foreign investments by International Oil Companies with whom significant opportunities were identified.

During the COVID-19 pandemic and in response to labor and fiscal reforms, we transformed our personnel management model into a specialized service one. This included updating our corporate bylaws to shift our focus: 80% toward specialized engineering services for the energy sector registered under REPSE and 20% toward specialized recruitment for Energy, registered under the Secretary of Labor and Social Prevention (STPS). This was a significant challenge given the difficult circumstances at the time.

Our success is largely due to our local expertise and international reach. In Mexico, becoming a preferred provider is achievable by ensuring transparency, compliance, and quality. Although this may sound simple, many companies struggle with understanding local labor, fiscal, and specialized services regulations. We gained the trust of international companies, starting with our first contract with an oil operator in 2017, by demonstrating quick response times, quality, compliance, and transparency.

Q: What do you see as the main challenges facing the oil and gas sector and what role is PEMEX playing in this scenario?

A: The industry requires significant changes. PEMEX's financing issues are a matter of concern, with many regions and companies facing financial difficulties due to non-payments. Currently, there are a several successful international operators in Mexico, however the potential is much greater considering there are approximately 300 Oil & Gas fields that are not assigned at the moment

In terms of labor, there is no specific legislation for the oil and gas sector. Offshore work typically involves 12-hour shifts for 14 to 28 days, followed by 14 to 28 days off. However, this is not reflected specifically in the Federal Labor Law, leading to legal disputes over, for example overtime, holiday and Sunday premium, which complicates matters for the private sector. Due to the risk of working offshore and the special working hours, workers in this industry already earn three to four times more than onshore positions, including those costs in their salaries. Without proper regulation specifically for Oil & Gas, the industry faces significant legal challenges.

Q: What role does talent training play in your strategy for Mexico and how effective have your local hiring strategies been?

A: Today, approximately 80-90% of our employees are local. When international oil operators first arrived, they brought in a lot of international talent because, apart from PEMEX, there was little to no expertise available at higher levels of the supply chain. It was a complex situation. However, the industry has focused on developing young talent. For example, in 2019, we hired a drilling engineer with little experience, and now he has grown into one of our leadership positions. 

Most companies are impressed with the level of talent in Mexico, people’s dedication, and the potential for learning within the talent pool. Continuous training, ongoing learning, and the exchange of experiences between international experts and local hires have become a regular occurrence. This approach has led to several highly successful campaigns and there are now plenty of examples of Mexican Talent hired in international projects outside of Mexico

Q: What initiatives have you implemented to support clients in terms of ESG compliance?

A: There is a significant stigma in the sector, with oil and gas companies seen as inherently problematic. While there are many ESG challenges, it is evident that processes related to governance, ethics, conflicts of interest, diversity, and inclusion are increasingly being integrated. Our success can be attributed to leading and adhering to these initiatives, which led to our selection by clients. Operators look for compliance in these areas when issuing tenders.

The focus of reviews has shifted significantly toward ESG issues. In the environmental realm, there are numerous regulations regarding hydrocarbons, chemical discharges, and more, designed to prevent incidents and accidents.

Q: How does WTS Energy prioritize Health, Safety, and Environment (HSE) standards in its operations in Mexico? What specific HSE initiatives have been implemented to ensure the safety of workers and the protection of the environment?

A: This year, we hired a Quality, Health, and Safety (QHS) specialist at our Mexico City office to lead projects and ensure compliance with all regulations and requirements. Additionally, when our personnel are on-site, we are required to follow our clients’ regulations and compliance protocols.

From the moment we sign with a new client, we include QHSE clauses and addendums in the contract to ensure all personnel are trained and understand the processes they must follow. We also create a document in collaboration with the clients' QHSE departments to ensure all aspects are covered. Additionally, we have a direct line for any compliance issues, allowing us to address any type of situation promptly. This helps us connect our existing protocols with our clients’ and ensure we meet or exceed their QHSE expectations.

Q: What role does innovation play in WTS Energy’s operations in Mexico? Are there any new technologies or digital solutions that you are particularly excited about?

A: We constantly analyze new technologies and tools, as they develop rapidly. For instance, last year we implemented an Applicant Tracking System (ATS) to streamline processes, from commercial sourcing and recruitment to onboarding and offboarding. This system includes AI capabilities and search assistance.

Despite our sector being somewhat manual, we continuously explore tools like ChatGPT and user-friendly solutions preferred by newer generations, such as Canva, instead of PowerPoint. We promote these changes to enhance efficiency, creativity, and effectiveness.

From the company's group perspective, we have two sister companies. One, Hiberhilo, is an IoT firm offering  a remote temperature and pressure monitoring technology that gives you full control of wellhead monitoring and management.  Many wells still operate manually, and without field visits, their status remains unknown. This tool delivers real-time information, improving oversight.

Reynard, the other company of the group, is specialized in Connecting wind turbines to high-voltage cables. With a team of 320 well-trained and dedicated high-voltage technicians, it focuses on seamless, safe, and efficient energy solutions for a sustainable future.

Q: Looking ahead, what are WTS Energy’s strategic priorities for the next five years in Mexico? How do you plan to navigate the evolving landscape of the oil and gas industry in the country?

A: We are entering a phase where several projects will be completed, positioning 2025 as a year dedicated to redefining and diversifying our business model and strategy . We are approaching this from multiple angles. In the hydrocarbons sector, we are involved with operators and new projects related to gas generation and transportation. We anticipate several large projects and are diversifying into more regional markets which should ensure picking up new projects from Q3 2025, onwards.