Swiber: Diversifying in the Face of a Changing IndustryBy Peter Appleby | Mon, 10/12/2020 - 09:25
Q: How is Swiber approaching the challenges of the industry’s new environment?
A: There have been many changes in the global oil industry over the past few years, including in Mexico. PEMEX is and will continue to be Mexico’s industry dynamo and a major player. But after the entrance of private interests into the market, the horizon of opportunity has grown for companies like Swiber, which continues to focus its activities in our field of specialty: offshore construction and the installation, fabrication and engineering of platforms as well as pipelines. We have focused on both private and public interests in Mexico.
At the same time, there have been changes from the head offices in Singapore – we are a subsidiary of the Singapore-based group Swiber Holdings. There is one development taking place that will engender a very interesting new line of business and will have definite implications in Mexico, from design through to engineering and fabrication. The group is developing what we call Floating LNG-Powered Plants. We are not pioneers, but we offer a distinct solution. The floating plants together with the complementary supply solution is unique. We are considering scales of 50MW to 400MW or more.
Under the deck, these plants have storage for LNG and on top of the deck is the regasification and power generation plant itself. These plants cannot depend on large tankers for their LNG supply because they have restricted access to coasts. To resolve this, Swiber is offering a specially fabricated design vessel. This means the plants do not need to depend on major suppliers.
LNG is now abundant and cheap and is a far more environmentally-friendly option than other fuels. Analysts forecast that LNG will play a large part in global energy generation in the coming decades. With Mexico being so close to the US – the world’s cheapest gas market – LNG can be brought to the country through the pipeline network that has been developed between Mexico and the US. That said, we also have sources in other parts of Latin America, including Peru. With our specially designed transportation vessels we can deliver wherever needed.
We are engaged in major projects across various Asian nations but we are also looking at the power generation markets in Mexico and Latin America. We believe there is an important need, growing yearly, for greater electricity supply. LNG can be the answer. The company has strong links with shipyards in Singapore, China and Korea. We have not yet established these links in Mexico, although we could do that in the future. In Mexico, we have a fleet of vessels and when the vessels need work, we bring them to shipyards.
Q: Where does Swiber see the most opportunity in Mexico?
A: The federal government has prioritized PEMEX to help reverse its production decline as major fields mature. To this end, the NOC has adopted an ambitious plan for the development of new fields. The majority of these fields are offshore. So far, shallow water is the main area of focus but there is still huge potential in deeper water.
We are shallow water specialists and therefore view these plans with a great degree of optimism. This year, due to the COVID-19 pandemic and the drop in oil prices, some of these developments have been postponed. But we still have ongoing projects with PEMEX contractors. We believe that once the pandemic has subsided, the global economy will grow and the demand for oil will increase alongside it.
Q: How does last year’s incorporation of Somex International bolster Swiber’s presence in Mexico?
A: Swiber incorporated Somex International a little less than a year ago. The move is a progression of our presence in Mexico. But our history began in 2012 when Swiber Offshore-Somex began bidding for PEMEX contracts and gained recognition for our performance. The incorporation widens the scope of work we can do here. We are using Somex International in this new stage of business, working on PEMEX contracts as a subcontractor. We are hoping to build on the success of Somex to serve our clients in offshore construction but also for the new LNG plants.
Q: How is Swiber preparing for the increase in offshore activity that Mexico will experience in the next few years?
A: At this stage, we already have a good network of contacts within PEMEX and among internationals due to our work with them in other markets. We have experience in all major world markets and when we came into Mexico, we devoted ourselves to developing a wider net of connections, particularly with the new actors in the country.
Close and frequent contact is essential during times challenging times. Adaptability and interaction are essential in the exchange of information, awareness of what is happening in the industry and being able to get ahead in development. Though we no longer work directly with PEMEX, we maintain close contact with the company and are following its development plans very closely.
Q: What does Swiber see for its business growth in the next 12 to 24 months?
A: We expect to play, and are working to play, an important role in the industry’s recovery. But economies like that of Mexico are well-diversified and have many links to the global economy. The oil industry has always been a key sector in Mexico and the government has put PEMEX and CFE at the center of the energy industry and, therefore, the development of the nation. Swiber is looking forward to being part of that.
Swiber offers a wide range of engineering, procurement, installation and construction services, complemented by its in-house marine support and engineering capabilities, to support offshore field and development production.