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Upstream in View for Mexican Constructors

Abraham Zepeda - Grupo Hosto
Commercial Director

STORY INLINE POST

Wed, 01/18/2017 - 23:30

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Q: What role will alliances and mergers play in Grupo Hosto’s plans as the Energy Reform unfolds?

A: Alliances and joint ventures will definitely play a big part in Grupo Hosto’s future business plans. In fact, we are partnering with other companies to work on the block won in Round One and we are always open to new alliances. Grupo Hosto benefits from partnerships with a diverse range of international and national companies, including a collaborative contract with Amec Foster Wheeler and a new technology contract with Atmos. We are also open to forming associations for participating in Round Two in 2017.

Q: How successful has CNH been in making the licensing contracts attractive for companies to diversify into upstream?

A: The most impressive aspect for me was the transparency with which Round One was conducted. Details like video conferences and the level of vigilance over the awarding processes have been very good. The winners were selected based on the most beneficial conditions for the country. This level of transparency gave Grupo Hosto a lot of faith in the process as a whole and made participation a lot more attractive.

Q: How has PEMEX’s new leadership handled the changes at the NOC in the past year?

A: PEMEX’s CEO’s first task was to balance the NOC’s finances, detect the danger zones where the NOC was losing a lot of money and optimize the company’s debt and spending. Next was to implement new ways of working, such as associations with private firms and the idea of macro- contracts. These ends are achievable but require a lot of legal work to implement because they are completely new and innovative concepts.

Q: How has Grupo Hosto benefited from the fact that its brand is already accepted by PEMEX?

A: With 30 years working with the NOC under our belts, Grupo Hosto is a longstanding partner to PEMEX and is trusted within its ranks. This relationship is the value proposition we offer to potential partners. It is difficult to introduce new technologies to PEMEX without a well-known partner to back them up. Our suggestion is that these companies search for partners in the

Mexican market who have a relationship with PEMEX already. This will be the key to their success as they enter the Mexican oil and gas market for the first time.

Q: Has PEMEX’s payment slowdown improved since last year?  

A: By November 2016 PEMEX had paid us around 70 percent of what it owed us. In times of crisis we made sure to keep meeting our commitments because we trusted it would eventually pay us. The situation with PEMEX’s payments improved in 2016 because the new leadership has offered certainty, which is key. Now PEMEX can tell us the exact date of payment. Before the new management came in there was a lot of uncertainty. Even if there is a delay, knowing the payment date is useful for Grupo Hosto’s budget and work planning. It allows us to react and make internal decisions on important projects.

Q: How has Grupo Hosto managed to thrive financially despite the industry’s downturn?

A: Our success in the last few years can be attributed to a shift in Grupo Hosto’s core ideology. Previously we were closed to associations but we have now opened our doors to partnering with private and international companies, particularly those with advanced technologies. This has allowed Grupo Hosto to remain successful despite the difficulties of the industry because we have adopted the good practices of our new partnered companies.

Q: How will Grupo Hosto develop over the next year?

A: Grupo Hosto wants to become an industry leader in this sector. It has been a difficult year in the oil and gas industry but we believe that next year will be better. We have had eight decades of success, so the industry should not panic because of one bad year. There are many new operators coming to Mexico – 600 importers of gasoline are already registered. Many things are happening and we are very optimistic.

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