Hermann Saenger
Managing Director
SGS Mexico
View from the Top

Working the Full Spectrum of the Value Chain

Fri, 11/16/2018 - 11:55

Q: How has your business changed after the Energy Reform with regard to the profile of your clients and the services you are offering?

A: We have been very active working with our international branches to analyze the services we are providing globally in countries that already have an open oil economy. We then bring our understanding of those services to Mexico. PEMEX has been our sole customer for many years. The services we were providing were therefore limited to a government organization that did not have any competition. Now we are in transition between participating with PEMEX and at the same time opening our offering to the new companies coming into the Mexican market. We are offering several new services for these international and domestic companies that were not needed when there was no competition. 

Q: Which of your services are most in demand?

A: One of our most popular services is subsurface consulting, which is important in the earlier stages of the aftermath of the Energy Reform. Companies want to be sure of what is in the blocks they won in the licensing rounds and we can provide this information. For them, it is reassuring to have our support regarding what they have under the surface so they know how much money they need to raise for future investments, as well as how much investment their property can support. This service is critical and we are providing it through one of our branches in The Netherlands. Our Dutch office is the main provider of these services worldwide and now we are bringing that expertise to Mexico.

Q: Why can your Mexican laboratories offer more value to clients than those of your competitors?

A: For the last 30 years, our main lab has been in Coatzacoalcos. We also have others in Ciudad del Carmen, Villahermosa, Altamira, Veracruz and in Ciudad Juarez. Our services begin with subsurface consultancy and we  then offer other related services depending on how far advanced our customer is in the value chain. For example, we can offer services to help clients with the quality and quantity of measurements once they start moving products, either for import or export. We also have a fuel retail service along with the traditional testing and certification, which reaches the gas station level. Our portfolio of services extends from screening and exploration all the way to retail distribution at the gas station. This is going to be something new for SGS because in the past we did not provide such services for PEMEX gas stations, but now, yearly certification will become mandatory for all 11,500 gas stations nationwide, plus the new ones that will open. We are investing right now to upgrade our laboratory facilities to have more technologically-advanced procedures as well as to have them all accredited so that we can certify their results. We are investing so we can cover the whole spectrum, from upstream to midstream to downstream. 

Q: What are the principal hurdles for new operators and oil field service companies and how can SGS help?

A: Mexico is coming from a context in which a state-owned company that lacked investment held a monopoly for many years. The current transition to competition and providing services to the market is blocked by a lack of infrastructure. This is especially true in the ports, in the discharge facilities during transportation, in the distribution centers and all the way down to the gas stations. There is a huge need to invest in infrastructure.

Right now, we have several customers that would like to be participating in the market by moving different products but there is not enough infrastructure. Therefore, we are helping them either with the creation, design and supervision of new infrastructure or with the certification of old infrastructure. In this way, the client can take over and either upgrade the infrastructure or completely overhaul it if necessary. We can also design and build completely new facilities. We have been in the Mexican market for 66 years and we have participated in the oil and gas industry for approximately 40 years. We know the country, know all its sites and all its infrastructure.