Midsized Tiger Prowls the Value ChainTue, 01/21/2020 - 19:39
Q: What were the most significant SUMMUM achievements in 2018?
A: 1H18 was challenging as the market awaited the results of the presidential race. But in the second half of the year, projects began moving forward. Private investors started to finalize projects, so new opportunities arose. During this time, we retained our personnel and began growing again in the second half of the year. We won important projects, including the design of a storage facility and a first treatment facility for a private investor in Mexico. The facilities will be located outside of the port in Paraiso, Tabasco, and are intended for crude oil from shallow waters. We have also been supplying engineering services for the design of onshore interconnections between oil fields for PEMEX E&P. This is required for new perforation sites. The work we do mainly takes place in Villahermosa, Tabasco, where we have an office. The original plan for 2019 was to drill about 60 new wells but that has been increased to about 130. Our role will be to provide the required engineering for the well sites to receive drilling equipment and to interconnect new wells with existing facilities. We have an extension for the PEMEX PEP contract, which is important because this is where much of the investment coming into Mexico will go.
Q: Who are your main competitors for the PEMEX tenders?
A: There are many engineering companies in Mexico but few with the foundations we have. Many Mexican companies can beat us on price but not on quality of work.. We explain our position like this: SUMMUM is not a large international company nor is it a small local company. We are right in the middle. We are very competitive because we have executed world-class projects – for which we beat out larger international companies – and that has given us a high level of experience.
Q: Why do you think you were selected for projects over your competitors?
A: We worked closely with construction companies, which meant we worked with the strongest companies in Mexico. We have strong connections with construction companies because one of the features of the Mexican market is that there are so few large EPCs. Among our successes in the past two years was to strengthen our relationships with those companies we believed would be among the competitors for major projects. Our strategy is to share risk from the bidding phase with construction companies. This way, we assure our participation in the development of engineering for the particular project in which our allied construction company gets selected.
Q: SUMMUM works in both private and public sectors and across every stream. What will SUMMUM focus on in the coming years?
A: In 2017 to mid-2018, all engineering companies were focused on the private sector. Since mid-2018, we have all been focusing on PEMEX and CFE. What can be inferred from the information we have is that the government will stop further private investment while respecting the contracts already assigned. The president wants to see results from these investments. However, private companies are still strong in the midstream, particularly in storage and distribution. The government is not going to invest in these areas so private companies will be there. For upstream and downstream we are going to strongly focus on PEMEX, and for power generation we will focus on CFE.
Q: SUMMUM has a digital solutions division. Who is this targeted to and which companies do you work with?
A: We do not yet have any projects for our digital solutions division in Mexico. We offer remote monitoring of oil fields. Unfortunately, Mexico is not yet so open to this kind of technology. This view is likely to change among private companies that won bids for mature oil fields that are functioning with 50-year old infrastructure. Private companies prefer to use cutting-edge technology to reduce personnel and employ more automation in their facilities.
SUMMUM is a midsized engineering service provider with more than 40 years offering comprehensive services in the oil and gas, energy and mining sectors. It is present in several Latin American countries.