Opportunities Arise from Changing Landscape

Q: How does Arendal attract business from IOCs in Mexico?

A: Arendal’s diverse experience means we can work to international standards. This capability is proving useful because we can go to international companies and present proposals in their terms. Our contracts meet international standards and we understand what international players want because we are used to working with them. Additionally, all senior-level managers at Arendal must speak English. These company attributes make attracting and working with IOCs easier. We have people from Poland, Italy and the UK running our operations in Mexico.

Q: What differentiates Arendal from its competitors?

A: We work throughout the entire value chain. We are laying pipeline offshore for PEMEX on two important gas projects. One of the lines is finished and we will be finishing the other soon. We expect PEMEX to tender more offshore pipeline projects in the near-future so will bid on these too. We also are laying pipelines from offshore platforms to onshore for Eni. For Sapura, Eni’s main contractor, we are building the shore crossing between onshore and offshore. We are also building its onshore pipeline. Additionally, the company is constructing two terminals for different clients at two locations within Mexico, while internationally, we are building Jamaica’s first gas pipeline. We are different from other Mexican companies because we are the only one with the capabilities, reach and experience to fulfil these contracts.

Q: How has Arendal assured its position following the change in administration?

A: Arendal has been balancing its portfolio for the past few years. When PEMEX began to have problems paying a few years ago, industry players became more innovative. We went into survival mode and our hidden capacities emerged. We made a decision to diversify and began pursuing projects with different clients to produce a balanced and open portfolio. This process went faster than we expected. For Arendal, a balanced portfolio means balance in revenue. Ideally, half of our work will come from PEMEX and half from private companies. At the moment, we have one project with PEMEX and seven others with private companies. For the short-term, we want to work on projects that require serious investment and where we can add value.

Q: How is Arendal delivering integrated solutions to PEMEX?

A: For the first time in its history, PEMEX is awarding a fully-integrated upstream project; platforms to pipelines to platforms. Usually, platforms and pipelines would be assigned separately. To solve this and provide full integration, Arendal is partnering with companies that we trust. For example, we have a partnership with a platform-fabricating company. This allows us to offer PEMEX a complete, integrated package.

Q: What will PEMEX’s procurement strategy mean for Arendal?

A: There is a tremendous push for disaggregating procurement within PEMEX and moving toward decentralization, as it was in the past. Villahermosa will become the center for upstream operations while Mexico City will be the heart of PEMEX’s downstream activity. The administration has announced that PEMEX will move its headquarters to Campeche and there is an intention to push government procurement through the SHCP and to use a centralized system for buying everything, including PEMEX goods. Both of these issues will be dealt with in the future but they will certainly take time to get used to. The industry will have to wait and see how strategy may need to be changed. We are waiting to hear PEMEX’s final decision on how it will operate. Regardless of changes, PEMEX will be our main client for many years to come. We will adjust to match its needs.

Q: What is Arendal’s growth expectation for the coming year?

A: We already have 60 percent of the contracts in place to achieve our growth target this year and these contracts have opportunities for expansion. The company is in a good position for the rest of the year. We will continue the projects we already have in place and find others to fill our backlog.

Arendal is an engineering procurement and construction company present across the oil and gas value chain. With over 20 years of experience in Mexico, Arendal provides pipeline installation services and HDD among others.