Pumping Innovation into the MarketWed, 01/18/2017 - 11:26
Q: How was SITEPP’s strategy influenced by the evolution of the Mexican oil and gas industry?
A: We have a clear and comprehensive insight on the new market in Mexico and our position in it. For instance, now that PEMEX has shifted from investing in assets to procuring services and is just another player in the market, we have adapted our commercial strategy to offer integral services and solutions rather than just selling equipment. The Energy Reform brought new opportunities. We have been successfully collaborating with private companies that won in the bidding rounds and we expect to continue this initiative.
Q: What are SITEPP’s main strategic alliances and what do you look for in future partners?
A: We have a diversified portfolio of services and we have developed other strategic alliances in several areas of the industry. Now that our skills and scope are wider and we can offer more integral solutions, we have found that through the correct alliances and joint ventures we are better positioned in the market. These alliances are improving SITEPP in areas such as electronics, automation and control, water treatment technologies, oil field operations, oil field integral services and others. There are a lot of international companies interested in doing business in Mexico but they lack insight on the Mexican way of doing business and that is where SITEPP plays a very important role.
Q: What is your view of PEMEX’s new strategy and how has it impacted SITEPP?
A: I think PEMEX has been awarded with the best fields in the rounds and it is on the right track. The problem is that it is trying to follow the Norwegian model where private companies compete with state-owned companies and even though PEMEX has a comparative advantage in shallow water production, it will not have that in deepwater operations.
To respond to PEMEX’s new strategy we first changed fixed costs to variable costs and promoted spin-offs so people with skills and knowledge could become independent. Finally, it was important to take on less risk in our projects because the relationship with new players will be different than the one with PEMEX.
Q: How have companies that won fields in Round 1.3 responded to SITEPP’s multiphase pump technology?
A: Round 1.3 winners have reacted positively. We have several proposals from different companies that are seeking different products and services like those of SITEPP. Some want to operate the equipment themselves while others require leasing schemes including a stock of spare parts, maintenance and operating services. The company’s nature will determine its needs and we expect to address them all. We are ready for any request.
Q: What is the main difference between working with private operators versus working with PEMEX?
A: We had plenty of experience working with private companies before the Energy Reform. The difference now is that these companies own fields and are better positioned to negotiate the final terms. The challenge for small and medium companies is funding. Many of the new players cannot finance services and operations. SITEPP already has adequate financial alliances ready to face this challenge.
Q: How different are the technologies used at onshore, shallow water and deepwater fields for the Multiphasic Pumping Systems?
A: The technology used depends on the volume of gas being pumped, while there are other types that allow for larger amounts of gas. It also depends on the field’s characteristics. We are very selective and only venture where success is assured and only when we have made accurate studies and analyses. Offshore pumping presents additional challenges resulting from the complexity of their geographical location. We have to perform technical visits to ensure we have enough space to develop a project on the platforms. The fields that can benefit the most from our technology are those that need rather large pumps, such as Abkatún and Ku-Maloob-Zaap.
Q: How has SITEPP’s leak detection systems for pipelines been deployed for PEMEX?
A: PEMEX realized that it is more efficient to hire a monitoring service rather than buy assets to secure its pipelines, so now we provide that service and in case of a security breach SITEPP has procedures in place to contact PEMEX’s pipeline operations staff. We control several pipelines for PEMEX and we provide monitoring services and keep a daily logbook.
Q: What elements do you expect to drive SITEPP’s future?
A: SITEPP’s future will be defined by acquiring integrated service projects that offer permanent cash, rather than the common procurement processes that we were accustomed to. This will give us the opportunity to better manage risk so we can invest more in R&D and training. We have 11 years’ experience and we offer guarantees to ensure investments in SITEPP pay off. We have the knowledge and relationships to develop any project and are confident that the company will grow three times over the next five years. We are investing in the Mexican oil and gas business and we are sure that with the alliances we have already developed and our skills, we have the knowledge and training to meet future challenges. We are well-known and recognized for our ethics and professionalism and are seen as a reliable technological company.
We are also proud of our multiphase pumping systems projects, such as that developed for PEMEX in the Samaria-Luna field near Villahermosa, which increased production in some of the field’s areas by more than 200 percent. Now we are working with PEMEX to develop this project to a higher capacity. These solutions are providing big value to oil companies and are consolidating our prestige as an innovative company that can provide excellent production results not only for PEMEX but for the new companies that are betting on oil production in Mexico. SITEPP is not only ready for the challenges, we have developed our own patents registered in the US and Mexico, which are giving us better competitive value in the market.
Q: What is SITEPP’s core value?
A: The core value of the company is the love employees have for their work. We have developed the company around the people who work here in such a way that they have evolved with the company. We believe in procuring the talent that works here, we offer them spinoffs and let them find their own company in some cases. Our people have the chance to work here and somewhere else at the same time.