Project Management is Crucial for Successful Operations: STIN

Q: How has demand for your services evolved as oil and gas production picks up? 

A: In Mexico, PEMEX is the principal owner of upstream, midstream and downstream infrastructure and controls the most relevant oil and processes and projects.  It was not until this year that the company recognized it would have to invest more in infrastructure projects, pipelines, wells and installations or see its production significantly decrease. 

This year, we saw an improvement in production and more activity from companies, which has provided an opportunity for STIN to offer its services in project management. The company works between contractors and PEMEX, reporting the physical and financial advancements in an easy format for PEMEX to digest. Demand for our services, supported by the use of technology, has increased significantly in the last few years and we think PEMEX will be able to increase its production.  

Q: How has STIN’s relationship with PEMEX evolved and what obstacles have arisen in the last couple of years? 

A: The new administration began with an incorrect strategy, offering very few bidding rounds and tenders. It has also punished suppliers as payment conditions are very bad for everyone in the industry. From 2018 to 2020, the situation was difficult as there were almost no projects. It was not until the end of 2021 that more opportunities arose for us to participate. 

Q: Previously, 80 percent of your income came from PEMEX and 20 percent from its service providers. Is that still the case? 

A: Today, it is the other way around: 80 percent of our income comes from PEMEX’s service providers and 20 percent comes from PEMEX. Nonetheless, we are still in the supply chain of the NOC as it demands that contractors have a project management office, which is the service that STIN provides. The only difference is that now, the contractors are paying us. PEMEX’s construction projects still determine our level of success. However, we no longer depend on a single buyer. 

Q: How crucial are project management services to ensuring safe and efficient operations in the oil and gas industry? 

A: Project management services are absolutely crucial, and PEMEX recognizes that. Time is important for the state-owned company because, at the end of the day, delays mean loss in production and profit. STIN’s project management services help contractors and PEMEX to adhere to the established costs and times. 

This government administration took a long time to publish tenders and construction projects. In 2019 and 2020, there were practically no construction projects and now, they have realized that they need to invest quickly or they will not achieve the promised production by the end of the term. There have been projects but, for example, the refineries being built at the moment started with an established cost and now that cost has doubled. There was no proper planning.

Q: How does STIN convince its clients to invest in certification and the advantages this could represent in the future? 

A: Unfortunately, around 80 percent of private companies that we know are executing PEP projects, are only getting certified because PEMEX demands it. Only 20 percent see the real value this has for them as a company and have been investing in certifying their people. These companies understand the value of having control of their costs and resources.