Raúl Cullingford
General Manager
Control Flow
View from the Top

Tactical Advantages Strengthen Bid Prospects

Wed, 01/18/2017 - 15:00

Q. Why does PEMEX need Control Flow’s services?

A: Since the Energy Reform, PEMEX has embarked on a process of following best practices, transforming itself into another industry player that needs to worry about efficiency and avoid downtime. By following guidelines and international regulations, mainly American Petroleum Institute (API) standards, it will become a reference for other companies coming to work in Mexico. According to these standards, everything related to the pressure of critical equipment, such as BOPs, needs to be certified every five years.

Control Flow has the advantage of being able to remanufacture and repair not just our own BOPs but also those made by other manufacturers, provided they are out of warranty and their patents are expired. This is because we produce, manufacture and build using the same raw materials as our competitors. Herein lies our unique service offering to PEMEX, because it purchases BOPs from the four main manufacturers in the US: Cameron, Hydril, Shaffer and us. Having this tactical advantage makes us a stronger candidate in the bidding process for BOP repair contracts. PEMEX asked us to renew one contract for a full year and we gladly complied and prepared by investing US$12 million in a brand-new, fully equipped facility in Cunduacan, Tabasco, which is a major asset for us because it will be offering service not only to PEMEX but also to all the new players that are entering the market.

Q. How is your portfolio split between PEMEX and the private sector?

A: Until recently our portfolio consisted of what we like to call an 80-20 relation, as 80 percent of our time for sales, manufacturing and service was assigned to PEMEX and the other 20 percent to the private sector. At the end of 2016 this ratio was flipped. We spent 80 percent of our time working with the private sector and the remaining 20 percent with PEMEX. This change has been mainly driven by our ever-increasing efforts and investment in sales. Before, working with PEMEX meant complying with a contract that stipulated all the information about the project without input from a sales department. Working with the private sector involves investing time in sales relations, which includes traveling to and visiting the new companies that have just arrived in the market.

Q. Considering that reversal, what new strategies has Control Flow adopted?

A: Control Flow in Mexico is adopting the philosophy of our Houston headquarters, where the executive sales crew visits potential customers and takes part in a normal sales process with them. This new philosophy involved an investment in our sales department as well as setting more aggressive goals in private sector sales. Furthermore, we are going to be Q2 certified by the API. In contrast with the Q1 certification that certifies the quality of the systems and can therefore be compared to a common ISO certification, a Q2 certification audits the services and procedures delivered to oil industry customers. The Q2 certification process will begin with an API audit visit to our facilities.

Control Flow’s strategy is also backed by our resilience, fast work pace and excellence-driven service. Our resilience is based on the fact that we have a practical management that makes sure every cell of the organization knows the processes followed by its peers, enabling it to keep working even if a cell is missing. Second, Control Flow’s size allows us to have a more efficient and flexible project development process due to shorter decision times. Third and finally, Control Flow has the same qualifications, certificates and experience as any other competitor in the industry.

Q: How is Control Flow's global presence impacting the future of the company in the Mexican market?

A: We see our global presence as a major tactical advantage, as the main companies in the oil and gas industry are reaching out to us, citing their global contracts with our Houston office. Indeed, multinational companies see competitive advantages in having a partner right next door.