More Investment Needed to Keep up MaintenanceTue, 01/21/2020 - 17:31
Q: What is your experience working with PEMEX and how does being a family company benefit your business?
A: PEMEX is our principal client. Our experience was built together with the NOC and we have been able to weather the industry’s ups and downs, including the recent crisis, largely because of this ongoing relationship. Currently, our contract with PEMEX is for the maintenance of housing modules and control rooms at Cantarell and Ku-MaloobZaap. We have also worked with private sector companies but are not as strong there. As a family business, we are able to operate practically autonomously using our own equipment and logistics. Many of our people have been in the business for many years and pass on their experience to new employees.
Q: How has working almost solely with PEMEX impacted your business?
A: A factor that has certainly affected us has been payment policies. In our last contract with PEMEX, the payment was extended from the contract-specified 20 days to 90 days and then to 120 days. We had to adjust. It was the crisis, and everyone was being affected. For about two and a half years this region struggled. Fortunately, we had our contract with PEMEX and that allowed us to come trough these times, when many businesses closed or reduced the size of their operations.
Currently, our contract stipulates a payment date of 20 days, but it is still being paid after 120 days. This is the same for other service providers, suppliers and within PEMEX itself. Nonetheless, we have the financial capacity to operate without problems. Recently, we have also increased our work with private companies, such as Grupo CEMZA.
Q: What outside financial aid or loans help support your operations?
A: We use bank financing when needed. The contract with PEMEX acts as a guarantee. At the start of a contract, we consult a bank and it pays for the start of the project, providing about 30 to 40 percent of the sum of the entire contract. Once we start operating, we no longer need the financing as the contract becomes self-funding. We spend what we earn and repay the credit before the end of the project. We always work with a national bank and have never touched any local financing options.
Q: What is your opinion on the state of the PEMEX fleet and what needs to be done to improve it?
A: Having personnel on board, we know that many are in a deteriorated state. Some are no longer producing and are abandoned. The resources being invested right now are not sufficient. PEMEX knows that stronger investments are needed to run these installations and provide good working conditions. It has a program at the moment that focuses on resolving what they call “anomalies.” Our contract covers the basic necessities to keep the installation running without complication. It does not, however, provide enough resources for complete renovation of the housing areas.
Q: What is your working relationship with CEMZA?
A: We have a commercial alliance to meet the needs of PEMEX. We certainly see business opportunities with several of the companies that are part of the group. For example, the CEMZA group company Maren is now beginning a project with two platforms for perforation, and we are looking at what we could contribute.
Q: What does the next year look like for the company?
A: We have an expansion plan in place that involves boarding and construction work. We are able to provide services at a more economical rate than our competitors, including Cotemar, Diavaz and Grupo Protexa, so we hope to compete more aggressively with them in winning contracts. With respect to PEMEX, our current project ends next year and has a total investment of US$6 million. We will work to leave those installations in good condition and deliver the best job we can.
Júpiter Suministros y Servicios has been providing services in construction and maintenance to the oil sector since 1987. Its main services are electromechanical works, civil engineering and equipment leasing.