– Yann Kirsch, EVP Business Development – Mexico
Executive VP of Business Development of Goimar, Yann Kirsch, illustrates how a partnership approach in Mexico’s oil industry has helped to establish the company as a leading solutions provider in the upstream offshore sector. In addition to that, Yann points out how Goimar’s synergistic approach has supported a variety of international players penetrate the Mexican market, effectively boosting Pemex’s access to foremost technology and service providers from across the world.
Can you begin by introducing Goimar to our readers, outlining the role it plays in the Mexican energy industry today?
Goimar is one of two privately held companies that makes up the locally established Grupo Goimar-Goimsa. With over 15 years’ experience in the oil and gas industry, the group has grown to enjoy a leading position in the domestic petroleum industry. On the one hand, Goimar charters, operates and maintains offshore drilling rigs, as well as the provision of marine services through a variety of vessels. Goimsa, on the other hand, provides all the structural and architectural maintenance to offshore and marine assets, in addition to providing diversified services to the refining sector.
Goimar’s operational seed in fact stems from 2002 when we were responsible for operating a semi-submersible drilling rig owned by Sinopec, which was then managed by Maersk contractors. We worked in close collaboration with Maersk on operating that drilling rig, and represented only the start of many strategic alliances with international organizations to offer a variety of offshore drilling services. One example of these alliances was with the Croatian-based CROSCO with whom we jointly operated a semi-submersible rig, the Zagreb-1, and provided maintenance services at the end of its contract through Goimsa, our sister company.
Another alliance we created was with COSL, with whom we enjoy an excellent relationship with. Goimar was the first to introduce the Chinese-based drilling operator to Mexico in 2006 when Pemex awarded Goimar a contract for four Modular Platform rigs. These rigs were build and manufactured in China by COSL and delivered on time to Pemex in the Gulf of Mexico, where they continue to operate till today. In addition to these four rigs, COSL also has two jack-up rigs in the Bay of Campeche, and we provide all their crewing services for these rigs. It is more cost effective to have a local partner in Mexico providing local services, such as human resources, facilities, infrastructure, logistics, and so on, to these foreign companies.
We also worked with a number of Singaporean companies. Goimar represents one of the largest marine companies in Asia, Pacific Richfield Marine. In this instance, we operated a couple of Anchor Handling Tug Supply vessels (AHTS). Closer to home, we paired up with Colombian companies, for instance, Coremar with whom we operated a few crew vessels in Mexico working for Pemex as well as in the spot market.
As we move forward in Goimar’s history, we have seen that a lot of our alliances have been central to the growth of our group. Through that invaluable experience, Goimsa, for instance, has developed into one of two companies in Mexico capable of building coke plants used in the oil refining process.
What is the most difficult part of doing business with foreign companies?
It’s perhaps the cross-cultural differences and language barriers that are toughest. However, having worked with a diversity of companies from across the world, we gained a lot from those experiences and now don’t represent any obstacles for a company like ours. We have managed to eliminate these barriers and introduce Pemex to different kinds of companies from around the world to service their needs, target various international tenders, or projects in the market place.
In many ways, we like to think of ourselves as that bridge connecting Mexico and Pemex to the global arena. Most often, the best strategy for any company to enter a new market is through local partnerships. Doing so allows investors to better navigate the unique characteristics of a given country’s economic, financial, legal and political systems, among others.
The way in which people view Mexico will change. Mexico is a highly stable country demonstrating impressive growth that is only set to accelerate. The country is undergoing a truly historic change in its history with these reforms that extend well beyond the energy sector alone, but include dramatic changes to its educational, fiscal and political structures. These changes will dramatically change not only the way the country is viewed from the outside, but will also change the mind-set of the Mexican people; an absolute necessity if we are to move forward with this transformation.
What makes Goimar the partner of choice?
Goimar has a proven track-record of building successful partnerships with numerous companies from around the world. We also enjoy an excellent reputation in the local market place and have focused on institutionalizing the organization. Avoiding to get into the politics of the energy sector, we strive to partner with and help Pemex to boost the Mexican economy generate opportunity for the people.
Besides introducing new technologies and know-how, partnering with international players also allows us to provide Mexican jobs. This is what the reforms as a whole are all about: prioritizing the Mexican industry and creating greater opportunities for the people.
Speaking about the energy reforms, you mentioned earlier that we don’t know the what, but we know the how. Can you elaborate?
Despite many challenges, the recently approved secondary laws signed by President Enrique Peña Nieto have allowed Mexico an amazing opportunity. Still in the early stages, the transition itself has not yet shown the full extent of the benefits resulting from the reforms. Like any change, this takes time and we need to be patient. Indeed, some companies might find it harder to adapt than others, or endure these times of change and uncertainty, but we need to acknowledge that we are in the midst of an amazing and historic transformation.
In this regard, we don’t know what is coming in terms of the types of projects over the horizon. This is not yet exactly defined. Nevertheless, we know how this is going to happen. For instance, Pemex is now free to form strategic alliances with other operating companies, local or otherwise, and international players are also free to enter the market on their own should they be willing. In addition to this, we now have a newly formed regulatory entity that previously exist but did not have the approved authority, the Mexican National Hydrocarbons Commission (CNH), which is intended, among other things, to promote transparency in the collaborative and bidding processes. With projects no longer being strictly limited to fall under the Pemex umbrella, the potential investment opportunities for locals and internationals alike will explode.
With so many opportunities, where does Goimar intend to position itself in Mexico’s offshore segment?
Over the foreseeable future, Goimar will maintain its focus on the shallow to medium water depth segment of the offshore drilling sector. We are not yet experienced or capable of going into the ultra-deep water market. However, we have created a strategic alliance with the Norwegian-based Odfjell who have years of experience in ultra-deep waters and have expressed a strong interest in Mexico. Boasting an excellent track-record, I am confident that we will be able to gain a wealth of experience working with them and are highly enthusiastic about participating in any such projects that may soon emerge in Mexico.
There is now a momentum driving Mexican companies like ours to create alliances with international players that can introduce anything from technological innovation and expertise, to equipment and sourcing spare-parts which can sometimes be difficult to obtain in Mexico. Companies like ours need to be seen in the international community as the best local partners that serve as the gateway into the Mexican marketplace. These alliances will be fundamental to supporting exploration and production activities in Mexico that are no longer exclusive to Pemex. Language barriers among Pemex’s thousands of employees will have to be broken down, for instance, as will the general business culture; from one of a Mexican government owned-entity, to one of a competitive and profit-orientated state enterprise. This is in addition to the changes required in the contractual and purchasing schemes that Pemex has been so used to implementing if they wish to attract foreign investments and partnerships.
With the liberalization of the market, how do you expect the business culture of working with Pemex to change, if at all?
Since the national oil sector was nationalized over seven decades ago and Pemex was created, the company will most certainly have to transform its business culture as it transitions into a ‘profitable state enterprise’. The head of Pemex’s newly formed procurement and supply division, Mr. Arturo Henriquez, has repeatedly communicated that these transformations are certain to re-shape the mind-set of Pemex and its employees.
Already facing a lack of local talents, to what extent can Mexico cope with the increase in demand for experienced human resources?
As it is, demand is indeed trailing supply of talents and what worries me the most is the future supply, in light of increasing demand. The expected flood of international investors will certainly place a heavy strain on the local market for talent. In effect, this is beneficial for the employees as their talents are valued more, but companies will need to rethink the way they attract and retain employees without letting costs surge.
This is not to say that Mexico lacks talented in terms of quality, but rather in terms of quantity, and will force companies to import talent from abroad. Venezuela’s PDVSA, for instance, has a lot of highly experienced people eager to relocate as a result of the deteriorating situation there.
On the R&D front, Goimar has made some significant advancements illustrated by the GX-10 design and the contributions you’ve been awarded by the National Council of Science & Technology. Can you tell us more about your R&D efforts and milestones so far?
Having partnered with Houston-based Zentech in 2010, we created a basic and detailed engineering design for a 3,000 hp modular rig in response to Pemex strong demand for such platforms. Through intensive R&D, we were proud to have developed a design that allowed Pemex to optimize many of their financial resources by avoiding the use of train vessels to install the platform rigs atop their structures.
How do you see Mexico as a source of innovation over the long term?
The general lack of talents in the local industry will prompt universities to develop more attractive curriculum and career paths in different areas of the oil and gas industry. Today, for instance, there are only a small number of institutions offering petroleum engineering degrees. Naturally, filling the gap in talent will have to precede building the Mexico’s R&D capacities.
Thus far, there has been a general lack of government programs and initiative designed to promote R&D and innovation in the country. However, the current government has demonstrated its commitment to unlocking the potential of Mexico’s economy and have been increasingly promoting such initiative. R&D efforts in Mexico are likely to address the challenges associated with enhancing exploration and production techniques while minimizing environmental impacts and project costs, in collaboration with local academic institutions and other sources of innovation.
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