Luis Abril – Global Head of Energy, Industry & Consumer Products; Roberto Diaz – Global Director Oil & Gas, Indra, Spain
In a wide-ranging interview, Luis Abril, who heads the Energy Division at Spanish-based Indra, and Roberto Díaz, Oil & Gas Director, reveal precisely how Indra has utilized its diversity and experience to survive during a difficult period for the oil and gas industry as well as detailing their future plans.
Indra describes itself as a global consulting technology firm that serves a wide range of industries. I believe the energy sector accounts for 15 percent of your organization’s revenues, and you also offer a huge variety of services in the oil and gas industry. Please start by introducing all the different aspects of your company.
“Our continued investments in innovation have helped our clients overcome important challenges in these last years, such as the drop of oil prices or an increasing need for technical solutions with an impact on efficiency.”
Indra is one of the main global consulting and technology companies and the technology partner for core business operations of its clients’ businesses throughout the world. We offer a comprehensive range of proprietary solutions and value added services in the technology field. In addition, we have a unique culture that embeds values such as reliability, flexibility and adaptability to clients’ needs. Indra is a world leader in the development of comprehensive technological solutions in fields such as Defense & Security, Transport & Traffic, Energy & Industry, Telecommunications & Media, Financial Services and Public Administrations & Healthcare. More specifically, through our Minsait unit, we provide a response to the challenges of digital transformation. In 2016, we reported revenues of EUR 2,709 million, had a workforce of 34,000 professionals, local presence in 46 countries, and sales operations in more than 140 countries.
If we focus on our activity in the Energy sector, we rely on a global understanding of the business and benefit from the experience we have gathered in the last 25 years operating in the industry. We provide a unique approach to technology for energy companies in the electricity, water, gas and oil sectors. Specifically, in the oil & gas sector, we offer both innovative upstream and downstream solutions and services, covering the entire value chain. Activities expand across the complete range from exploration and production through environmental protection, risk management and trading.
Our continued investments in innovation have helped our clients overcome important challenges in these last years, such as the drop of oil prices or an increasing need for technical solutions with an impact on efficiency. Actually, we like to work with our customers from the very beginning of the process, from the moment when the need is detected. Our end-to-end approach allows us to develop outstanding flexible solutions that fit each customer requirements. In Spain, we collaborate closely with key players in the oil & gas sector and we are proud to be considered a valuable partner by most of them.
Could you please take us through your process of internationalization for the oil and gas sector and give us a sense of your revenue figures geographically?
Approximately two thirds of our business in the energy division is conducted outside Spain. Our main source of international revenues is South America, which is always a natural market for a Spanish firm. We hold a quite strong position in Colombia and Brazil. But we also have presence and very interesting projects in other regions such as Australia and the North Sea.
Our oil & gas unit, in fact, benefits greatly from a structure of several centers of excellence spread throughout the world that help us develop truly high-value products. These centers, such as the one we have in Colombia, have helped us build a powerful network of local partnerships.
Going beyond the “comfort zone” of South America, what regions do you have in your sights and what opportunities have you identified?
As mentioned before, we are currently pursuing business opportunities in Australia, in the North Sea, in the United States and in Mexico, where we already have offices and highly specialized teams. In general, we do believe the Asia-Pacific region has significant potential. In fact, we are already operating in countries such as Malaysia, Indonesia or the Philippines, where we have also strong local presence. Central and Eastern Africa are also two regions to keep an eye on – within the Energy Division, we are currently working on some very exciting projects in Kenya and Ghana, to name some examples.
In terms of your client base, describe your typical profile company.
Upstream companies, currently with aggressive efficiency targets, are our most typical customers, although we also have downstream and transport companies in our client base.
In Spain, we are fortunate to have Repsol, one of our three major clients, as technology partner also. Globally speaking, Petrobras and Ecopetrol are also very important clients. We also work with BP, ENI, Pemex, Cepsa, YPF, Enagás or Caltex, just to put some examples, so we are proud to work hand in hand with such challenging customers.
In terms of services where is the majority of demand coming from at present?
I would say customers are interested in topics like efficiency, environmental safety, cyber-security or new technology trends such as the Internet of Things (IoT). This combination of skills at Indra positions us in the right spot to cover many of these needs, since we provide a deep knowledge of IT (Information Technologies) together with a deep understanding of the OT world (Operation Technologies, real-time operations, sensors, etc. – coming from Indra’s history in the Defense & Security and in the Transport & Traffic Divisions), and, finally, a solid and clear perspective on how the underlying businesses behave.
How has the dramatic fall in the price of oil affected your business, and how have you been countering this low-price market?
In fact, the whole industry was unable to anticipate such a scenario. We have reshaped our offering to cover the needs of our customers in the short term without forgetting about their strategic long term goals. In fact, we have developed a specific offering for achieving efficiency (short term) while at the same time we have continued investing in keeping a strong focus in areas like digitalization, environmental safety and cyber-security. This approach has proven to be successful and has certainly helped us to navigate a very difficult three-year period. In addition, working across the entire value chain of the industry has also helped, since difficulties have mostly been concentrated in the upstream part.
What is your assessment of the oil and gas industry’s attitude to embracing digital technologies? How do you get your message of digital necessity across?
Embracing digital is not straightforward for many oil & gas companies, since this is a relatively traditional sector. Nevertheless, it seems clear to me that they end up adopting digital technologies when they do have impact; as in the case of the Internet of Things and machine learning. Oil spillage detection systems are the perfect example, as the technology has evolved from semi-manual products to fully automatic devices, allowing companies to make quick decisions under critical circumstances. For example, our product HEADS (Hydrocarbon Early Automatic Detection System) allows the operator of an off-shore platform (or of any other asset with risk of oil spills) detecting, in a matter of minutes and without human intervention, small volumes of leaks on the water surface and tracks record the evidences to enable forensic analysis.
We have great leaders in this industry: as mentioned, when they see true value in a solution they always bet on it. And the world is changing due to digital transformation so many new value pools are appearing; two things are driving the change: on the one hand, connectivity is much higher than ever – everything is interconnected, you can now get powerful sensors at very cheap prices, etc.; on the other hand, intelligence to make the most out of the data available due to higher connectivity is also higher than ever – we can design powerful algorithms that make automatic decisions almost in real-time, etc.
There is also a growing interest in cyber-security due to the potential vulnerability of many critical assets of our clients. Indra leverages its strength in IT-related defense and security solutions to offer a comprehensive range of cyber-security products and services. Cyber-security is actually a good example of how Indra is able to take capabilities from certain areas (i.e., the Defense & Security Division) and apply them into others (i.e., the Energy Division). But there are other examples of innovative digital-related capabilities that we are currently exploiting in the Energy Division, like those related to simulation; Indra’s uncontested leadership in the development of simulators (our full-flight simulators for the aviation industry are considered state-of-the-art) is being successfully applied to the oil & gas industry.
When we return in five years, what will you have achieved?
We foresee a connected future where the capabilities and technologies that will help companies thrive will be quite different from those of the last decades. No company will be able to deal with this profound transformation of society and industry as a whole without the help of trusted IT partners. And we ambition to be that partner for our clients. In order to get this, our path is very clear: we will work on anticipating market trends, we will keep on investing in innovation and we will ensure that we leverage our unique position that allows us understanding both the IT and the OT world.