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Interview

Oscar Le Calvet – Director General, Contreras, Argentina

oscar-le-calvet-contreras

The Director General of Contreras, one of Argentina’s leading construction companies, highlights their versatile capabilities and explains how diversification allowed the company to always be a step ahead.

Could you please introduce us to CONTRERAS’ footprint today?

“Historically, Argentina’s political direction changed often and swiftly, hence why as company we always recognized the need of broadening our stance by offering excellent services in a variety of industries.”

CONTRERAS is known to bring major projects into reality, typically with a key contribution to the regional development. The projects are often related to hydrocarbons production, transportation and processing, as well as the energy, mining and infrastructure industries at large. Right from its origins, CONTRERAS has kept a solid growth, diversifying its activities and implementing management systems for the continual improvement of all processes, always and above all targeting customer satisfaction.

One of the companies’ main works during the early years, was designing and constructing road access to oil fields, for equipment transportation or to provide access to the wellhead. Such roads required quite a special design so that heavy machinery can go through and we could establish an excellent reputation within the domestic industry. Over the years, we have been developing highly specialized and professional teams, which constitute a competitive advantage when it comes to conceive, plan and execute major projects, from early stages to commissioning. Today, our main activities are engineering, construction of pipelines, compression plants, storage tanks and other electromechanical assembly works, civil and railway works as well as service and maintenance for oil and gas, infrastructure works, mining works and related services.

You have had many projects in many different industries. What is the contribution coming from the oil and gas industry?

Diversification has always been a centerpiece of our strategy and is also one of the main reasons we have been faring so well over time. Historically, Argentina’s political direction changed often and swiftly, hence why as company we always recognized the need of broadening our stance by offering excellent services in a variety of industries. Today, however, approximately 60 percent of our sales are still generated within the sphere of the hydrocarbon industry. Although still dominant, I believe that this balance will shift towards infrastructure construction in the short-term future. Our current government has high ambitions for the development of infrastructure, especially when it comes to railway and roads construction, an opportunity we intend to seize hence why the relative share of the oil and gas industry will drop.

In the past you have experienced different periods where the demand of the oil and gas industry seemingly evolved. What is the main demand you identify today?

Construction of the pipeline systems for the oil and gas industry has been one of our first big segment within the hydrocarbon industry. As a matter of fact, I was one of the key driver within Contreras supporting the company’s diversification into this segment some decades ago. Ever since our significant success in this segment, we have emphasized the industry at large and have kept up with its evolution. Today, we identify strong need to everything related to the development of the industrial plants with different level of complexities; from basic compressor plants to full scale refineries. As company, we are fully prepared to seize these projects and are actively targeting these specific needs.

It appears that Argentina now has enough pipeline capacities. The pipelines, however, are aged and in need of maintenance and revamping work. How do you perceive the upcoming works surrounding Argentina’s oil and gas distribution network?

Due to the demographic and political developments, it is quite possible that soon, the main distributors –TGN & TGS for instance— will go through a process of investing in new facility enhancing the existing capacity in addition to simple maintenance and revamping works. Either way, Contreras can and already does support both developments. For years, we have been the main partner for maintenance and revamping works and we will also be present when investment decisions will be taken!

Could you provide us with an overview of some recently carried out projects that showcase your expertise best?

There are multiple projects in our recent history that highlight our expertise and versatility within the industry. Most recently we constructed the Northeastern Pipeline for ENARSA. The project consisted of the assembly of a main pipeline which was 24 inches wide. The whole project has an aggregate extension of 15,000km, of which 1,500km corresponded to the main pipeline, whereas the rest was related to branches to secure provision for small towns and villages. The pipeline will allow gas importation from Bolivia, going through the provinces of Salta, Formosa, Chaco y Santa Fe. Another recent project was at the Plaza Huincul Industrial Facilities – located approximately 100 km from Neuquén city. It is composed of a Refinery and a Methanol Plant. Both facilities were disposing their waste through the same venting system. However, 300 meters north from the unique Torch is a neighborhood which suffered from noise contamination due to the levels of noise which were far too high. Therefore, the venting system of the methanol refinery had to be fully isolated. To do that, a new venting system was installed for the methanol plant, including a brand-new pump and torch, dedicated to assist both the normal operational venting as well as all extraordinary procedures—such as commissioning or electric failure.

How would you asses Argentina’s market attractiveness in regional comparison today?

As aforementioned, as result of Argentina’s political and economic volatility we saw diversification as critical strategic essence for us as company; diversification, in that sense, was not limited to pure diversification in terms of industries but also meant geographic diversification for us.

That meant, we have always sought to export our expertise across the region. One of the challenges in the last decade was the political barriers in exporting from Argentina—under the new administration these barriers have vanished already. Paradoxically, however, the removal of these barriers has not led to an increase in exporting our expertise because we expect the opportunities within Argentina will continue increasing significantly.

We currently still use Bolivia as platform to seize opportunities across the region, nonetheless, Argentina has set itself apart as our market of the future! We carry on a sales policy oriented towards diversification of both activities and countries.

We do it while acting with a realistic outlook in every approach, based on our strengths, however pursuing constant growth, which we believe to be the only way of doing business.

The share of international projects varies year on year and we are trying to develop our subsidiary in Bolivia, to achieve a regular level of activity in the country. During the last decade, this share was around 50 percent of our gross sales, currently the figure is 10 percent to 15 percent.

What are some of the challenges you identify within Argentina’s hydrocarbon sector?

There is a notorious deficit in transport infrastructure within the hydrocarbons sector. There is a crystal-clear need for planning works related to communications, roads, harbors and energy distribution. Such scenario represents a broad opportunity for companies such as ours. Thinking ahead, visioning the next 3 to 5 years, an important amount of investment is expected to reach the transport sector, due to the need to enhance the infrastructure which will eventually allow economic development.

That is not only because of the increment of the volume of gas to be carried from Bolivia or Patagonia, but for the demand of several regions where the current provision is not enough such as the Atlantic coast or the mountains in the west for instance.

Vaca Muerta one of the key topics within the global oil and gas industry. To what extend is the overall development of Vaca Muerta an opportunity for Contreras?

Vaca Muerta is certainly a key project for Argentina. Non-conventional developments will require far more infrastructure. CONTRERAS is eager to be part of it, given its vast experience and long-time presence in the region. We are a local company, with a strong bond to the community and all key stakeholders, among which are mainly our clients already: Total, YPF, PAE, Shell, ENAP and Petrobras.

Our competitive advantage is not only our experience and our already mature Management System, but particularly our history of always assuring a whole and complete delivery. We never let down a client and complete all projects per their required standards.

Many of the multinational companies we saw told us that in order to succeed in Argentina, they need a local partner. To what extend are you open to such partnerships?

We are not only open to partnerships; we expect to develop a genuine successful track record of partnerships with companies from Spain, Italy, France and China!

We are confident, that Argentina needs those companies to come and invest into the country. We local companies typically have the manpower and general capacity, however, when it comes to large projects of high complexity we often lack the technical prowess; such projects are upcoming in the short-term future and are vital to the countries overall development.

What is the added value you can provide as partner?

As much as I believe that Argentina needs these large companies to come and Invest, as much I am confident that these companies need local partners to be successful in Argentina. Argentina will be a very good investment asset and a local partner will be able to guide trough the market peculiarities of Argentina. Frankly put, it is a security measure reducing the risk of investing into the country; we know the stakeholders, the culture, and how everything works.

What is the message you like to be heard around the world?

Contreras thinks positively and optimistically about the future of the Oil and gas sector. We believe that the administration of our country has finally understood the need to make all efforts to attract and direct investments to the sector. Besides, all stakeholders within the industry have already realized that it is necessary to reach a long-term agreement to achieve high standards of competitiveness.

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