Rafael Llamas
Director General
Cargotecnia
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View from the Top

The Mexican Multi-Industry Suppliers Perspective

Tue, 01/21/2020 - 18:30

Q: What role does the oil and gas sector play in your industry-diverse client and project portfolio?

A: First, it is important to establish a background fact: The No. 1 industry in Mexico is construction and in that industry 2018 was substantially underwhelming. One of the main ways in which you can measure this is that cement production decreased significantly throughout last year and this year and CEMEX has been quite affected by all of this. This is not helped by the fact that the infrastructure market has been pretty slow as well. Obviously, there was the very heavy hit from the airport cancelation at the end of last year, but there are other signs as well. The slowness and halted rhythm of the Mexico City-Toluca train’s construction is also a manifestation of all these trends. That project was supposed to be finished two years ago. With all this in mind, we can look at the oil and gas industry as the industry that can close the gap created by this general slowdown. The Dos Bocas refinery is an obvious example, although projects of that size still have too many open questions in terms of financing. We have to focus our involvement in the oil and gas industry in a manner that can take advantage of both shortterm opportunities in the Gulf of Mexico and also long-term opportunities in areas such as fracking.

Q: How would you compare the oil and gas sector with other Mexican industries in terms of regulation?

A: It would depend on the industry that we are comparing it to. For example, oil and gas regulations are much more severe than those we deal with in the energy and electricity sector. We want to make it clear that, from our perspective, this makes perfect sense because of the degree of risk involved. It is not just the product itself that is more volatile and dangerous to handle, the transportation and lift methods in and of themselves are much more complex and filled with many more risk factors.