Optimizing O&G Beyond Cost-Cutting: F&CO® Oilfield Solutions

Q: How would you describe F&CO® Oilfield Solutions' overall strategic approach to the Mexican oil and gas market in 2025 and beyond, especially given the current industry dynamics?

A: F&CO® was founded from a clear need to provide better solutions to drilling companies. With over 30 years of experience primarily in drilling and production, I have held various positions that have given me a comprehensive view of the industry.

One of the key targets in the industry today is cost optimization. We have observed that during past oil booms, when money flowed freely, many hidden costs were absorbed. These "administrative overheads," meaning expenses not directly tied to operations or the product being sold, such as personnel salaries, office costs, or company vehicles, often inflated project budgets. Our approach is to target these areas. We strive to optimize costs without compromising quality or personnel status. This means maintaining high standards of service while finding smarter, more efficient ways to operate.

We are leveraging lessons learned from the pandemic, particularly the effectiveness of remote work and home office setups. These insights have been instrumental in shaping F&CO® and our commitment to optimization.

Q: Could you elaborate on your products and services? What specific solutions are you offering to address the current industry landscape?

A: One of the primary needs in drilling operations is for consumables, those accessories that are routinely used up. We started with something seemingly simple: supplying shaker screens for specific equipment on drilling rigs, a consumable absolutely required on all rigs. Before bringing these screens in, we meticulously evaluated various potential suppliers to find the one offering the best quality.

Our selection process involved rigorous scrutiny of certifications, starting with ISO certifications to verify procedures, and then advancing to API certifications. After identifying the best-qualified supplier, we held preliminary meetings, including a trip to Houston, to finalize a pre-agreement. Following this, we imported the first batch of screens for testing in Mexico. Once approved, we had an acceptable market price.

However, we took it a step further. For continuous-use consumables, we offered to provide them on consignment. This meant we would place containers of these screens directly at the client's yard or facility, exclusively for their use. This approach exemplifies the types of solutions we started with. Subsequently, we ventured into other areas, including high-pressure applications, and continue to advance our offerings.

Q: How has expanding into the United States and Colombia benefited your operations here in Mexico? What positive impacts have you observed?

A: Initially, our expansion into these two countries presented some challenges. In the United States, finding suppliers, which was initially appealing, did not ultimately translate into significant cost savings for the client needing the goods. In some cases, costs were even higher, perhaps because we were a new company and lacked established credit facilities. This led us to focus more on Asia for certain sourcing. We remain open to negotiating with any company in the US or other countries, but from a purely numerical standpoint and in our pursuit of offering the best solution to the end-client, Asia proved more advantageous for specific needs.

Q: How do you perceive the difference between the demands in the United States, Colombia, and Mexico, in terms of regulation? What are the levels of demand, and what benefits do you see from your international experience?

A: Mexico is characterized by its extensive regulatory framework, which is excellent. However, while the regulations are robust, the consistent application of that normativity by the appropriate personnel is sometimes lacking, and unfortunately, this is something that needs to be acknowledged.

For example, with the Mexican tax authority, generating certain documents requires extensive paperwork. If there is any delay, the process becomes complicated.  Mexico has excellent, comprehensive regulations, but the precise knowledge and consistent application of these regulations by certain personnel are sometimes deficient.

Q: Why should clients choose F&CO® Oilfield Solutions for their equipment needs? What differentiates you?

A: We can summarize our value proposition into three key points. First is knowledge: when a company acquires a product from us, they receive a certified good that is guaranteed to meet all regulatory standards. Second, we have experience: our team possesses the deep knowledge and experience essential for delivering high-quality solutions. This expertise, from myself as a petroleum engineer with over more than 30 years in drilling and production, all the way through our sales and operational personnel, is what truly sets us apart. The last element is that we can help clients to realize significant savings, leading to tangible technical and economic benefits.

Q: I would also like to highlight the mining sector. What unique advantage could F&CO® Oilfield Solutions offer to mining companies, especially those involved in drilling? What benefit could you bring to this sector?

A: The primary advantage here is our collaboration with two Asian partners who possess exceptional know-how in the process. We have already established strong commercial relationships. They know us, and we know them; mutual understanding is vital. We know exactly who we are working with in this market. We guarantee that we will deliver top-quality equipment that will perform effectively and yield results for mining companies. This assurance gives us the confidence to enter this sector robustly.

Q: What are the biggest challenges you currently see facing the industry, particularly where F&CO® can provide assistance? What are your predictions for these challenges in the coming years?

A: One significant obstacle we have encountered is within companies' purchasing departments. While these individuals are capable, their knowledge, especially concerning specialized areas like oil and gas or, as we have recently seen, mining, may not be adequate. It's like a general practitioner trying to treat a patient with autism; their expertise is not specialized enough.

The most persistent difficulty has been engaging with purchasing departments because their primary focus is often solely on the lowest price, without adequately evaluating cost-benefit. They might choose a cheaper option, but it could mean purchasing two or three of those instead of one higher-quality, more durable item. In the fast-paced environment of these operations, purchasing teams often lack the time for thorough evaluation.

Q: What are your objectives and goals for 2025 and 2026? What do you expect by the end of the year?

A: A pervasive issue, widely discussed, is the challenge of payments. This significantly impacts companies like ours. While larger companies have the financial cushion to endure prolonged payment delays due to their higher-cost products, SMEs are severely affected. We currently have invoices outstanding for 410 days, exceeding a year, approaching a year and a half. This drastically inflates our financial and financing costs.

Our diversification strategy into the United States and Colombia has, to some extent, helped to cushion the impact of these payment delays. This is precisely what we aim to achieve in the mining sector, applying the lessons learned from our experience in oil and gas to mitigate similar financial pressures.

F&CO® Oilfield Solutions provides a comprehensive range of products and services for both the upstream and downstream sectors of the hydrocarbon industry in Mexico. The company also has presence in the United States and Colombia.