Technologies Geomar de México – Jose Aguilar, Managing Director – Mexico
The Managing Director of one of Mexico’s leading geophysical and geotechnical survey firms shares his opinions on emergent opportunities in the soon-to-be-opened deepwater plays. He also describes why it makes more sense to be servicing the industry that has grown up around Pemex rather than dealing directly with the NOC itself.
When we last met with you in 2011, you spoke about striving to make C&C Technologies what you called a ‘jack-in-the-box’ – a one stop shop for a whole variety of diverse solutions. Another goal was to establish an all-Mexican workforce. Looking back, how successful have you been in achieving all of that?
We are very much on the right path to realizing those ambitions. I would say we are presently around seventy percent of the way there. The “jack-in-the-box” concept is about instilling a “can do” attitude across our workforce and molding a company that can adapt what is does to the specific needs of the client thus providing creative and bespoke solutions. It is also about building a reputation as an effective problem solver and being able to multi-task. Having multi-task capabilities is a hallmark ofC&C Technologies in Mexico and is what enables us to deliver an immediate response to our clients.I can engage in onshore work while my colleague is doing the same for an offshore contract. Our clients fully appreciate this versatility.
We continue to undertake many of the same functions as before: working across the offshore and shallow water arenas providing GPS and geotechnical services, high-resolution geophysical mapping, andmarine construction surveys. Meanwhile C&C Technologies continues to sustain its worldwide reputation as a leader in Autonomous Underwater Vehicle (AUV) operations, and in Mexico we have been branching out more into the non-conventional areas through our deployment of Autonomous Surface Vehicles (ASVs) which represents a revolutionary way of reducing the cost for the client and simplifying their activities.
We persist in working hard to consolidate the company by harnessing local content and enjoy a healthy growth rate of roughly thirty percent year on year.
Last time, C&C was participating in the only deepwater activity in Mexico – Lakach – and you were bemoaning the lack of other deep-water opportunities which actually represents the mainstay of C&C’s expertise abroad. Finally these opportunities are materializing here in Mexico. How excited are you about this?
It is still early days for deepwater in Mexico. The reform certainly represents an excellent opportunity to apply our globally established expertise in deep-water to the Mexican market. We eagerly anticipate much more action in the deep-water segment and expect to be full participants. Until now, however, due to the lack of deep-water activity across the Mexican oil and gas market, we have needed to focus on other areas. Using the principle of applying offshore technology and expertise to the onshore arena we were actually extremely successful in securing the bulk of Pemex’s pipeline market.
Our land vision has been thoroughly focused on Pemex which, in itself, represents quite a risky strategy as we found out to our cost this year when facing a 50 percent reduction in our land contracts. This is because Pemex, having overspent considerably last year, is now in the midst of a radical restructuring and has been scaling back its activities and putting projects on hold as it seeks to recover costs. Luckily, however, we didn’t place all our eggs in a single basket and have been doing much to broaden our client base and achieve a wider spread of projects. It is the proceeds from these other projects that have enabled us to maintain our headline 30 percent growth rate.
In the offshore geotechnical services and geophysical mapping domain, we have established a substantial portfolio of clients that are essentially service contractors to Pemex. Today we possessopen contracts with leading multinationals from Europe and America. I see the situation as analogous to the19th century gold rushes across Australia and the US. Those who actually did the most lucrative business were not the gold diggers themselves, but the people servicing the gold mining industry which was booming. In just the same way, I have identified that the true profits are to be found in supplying the industry that has grown up around Pemex rather than dealing directly with the NOC itself. By focusing our efforts on a service that is required by everybody, we have ensured that our business is sustainable over the long term.
How have you been dealing with the challenges of sourcing and retaining skilled labor? We understand that C&C Technologies enjoys a long-time collaboration with the University of Carmen.
Our labor retention rate is actually very positive. I have people who have been working with us for over 35 years and our turnover is extremely low for the industry as a whole. The problem is much more to do with recruiting skilled labor. The bottlenecks arise because the universities are simply not providing enough graduates trained up in the often very technical disciplines that the market requires. It is for this reason that we sometimes have to resort to bringing in foreign workers.
As a company, C&C Technologies needs to be prepared to cope with a potential rise in demand for its services as the energy reform unlocks the door to more activity across the local energy market. We pride ourselves on our rapid response to our clients’ demands and therefore need to ensure that we have the capabilities to deliver this swift response. We have established longstanding collaboration initiatives with theUniversities of Carmen and South Louisiana in which we expose them to our technologies and they link us in to their emergent talent, but we still sometimes experience challenges in sourcing the highly qualified personnel that our business requires.
One initiative we have been putting in place is to invite undergraduates to gain practical work experience and apprenticeships with C&C Technologies during the course of their studies and then, once they have graduated, inviting them back to join our staff on a permanent basis. We are also exploring new ways of sending our fresh recruits on secondments to the C&C Technologies offices in the UK and US so as to acquire exposure to different visions and work styles.
What more should the private sector be doing to help alleviate these bottlenecks?
There is always scope for the private sector to be doing more to coordinate better with the universities. We, at C&C Technologies hope to be a trailblazer in pioneering these sorts of enhanced linkages with the education sector. I feel, however, that one of the main hurdles is societal and cultural and involves the oil and gas industry encountering problems in attracting young people. Ultimately this is an industry for adventurers. It often requires being deployed far away from your families in remote and sometimes dangerous locations or on platforms far out to sea. This means there are considerable sacrifices with regard to family life. Young people in today’s society are, I feel, less inclined to opt for such a lifestyle and this represents the fundamental problem facing the industry.
Is Carmen still the location of choice for the offshore oil and gas industry? We have been hearing in the press about business shifting to alternative focal points and Tamaulipas being branded as ‘the new Campeche’. We also notice that you have recently opened a new office in Tampico.
We have been engaged on some work for Petrofac hence the need to open up a small operational office in Tampico. At first I was hesitant because of the reputation for violent crime, but ultimately we needed to be in close proximity to our client. When we first came to Carmen there was virtually nothing here. It was a small fishing village and the oil and gas boom arrived all rather suddenly. The same will be for the new up and coming areas so it is difficult to pinpoint them right now. A lot of investment is currently flowing towards the border with the US in places such as Matamoros so new developments are definitely set to happen up there.
At C&C Technologies in Mexico, we have established a culture whereby our offices can operate fairly independently and self-reliantly. Here in Carmen, which represents our in-country headquarters, we concentrate on the offshore domain. Meanwhile our D.F. offices tend to our interests in Tula refining and our Villahermosa outfit concerns itself with all activities related to PEMEX’s land work in the south.
C&C has been in Mexico for ten years and has established a successful track record with both Pemex and private sector players. You possess the Mexican knowledge, the international exposure, and the latest technology. All in all, you seem to be very confident for the future. What, then, keeps you up at night?
We are extremely confident. We are very satisfied to be well positioned at the very time when Mexico has become the place to be in Latin America. Brazil was like a supernova star that, after huge amounts of hype, collapsed and now all eyes are on this country. There may be other Latin America oil and gas success stories such as Colombia, but nowhere else in the region holds quite the same raw potential as Mexico on the eve of reform. At the moment we are obviously still in the twilight zone where we don’t yet know the end outcomes, but all the indications are positive.
We may not be as large as our main competitor, but we are well run and have developed the trust with our partners to ensure long term contracts. Right now, we currently hold around 40 percent of market share and we see no reason why we can’t increase that to 60 percent in the coming years. If anything keeps me up at night, then it is our need to remain ahead of the technological curve and to maintain a happy, satisfied workforce. On technology we are performing well in the underwater construction domain where we providing our clients with unparalleled savings in terms of time and expenditure. At the end of the day, it is our human capital that makes this company what it is, so then priority must always be the well-being our workers.