When US president Barack Obama visited Mexico last week, his Mexican counterpart, Enrique Peña Nieto, wasn’t the most powerful person he conferred with – at least, according to Forbes. The publication’s most recent listing of the world’s most powerful people ranks business mogul Carlos Slim Helú and his family at the 11th place, while Peña Nieto appears as number 54. With an estimated net worth of US$73 billion, Slim Helú is the richest man in the world, deriving his fortune from a wide array of businesses ranging from telecom to banking and finance, as well as in the mining, construction, manufacturing, hospitality and service industries.
Now, Slim Helú has taken an important step to secure his involvement in the oil and gas industry. On May 2013, Slim’s Carso Group signed a contract with Pemex through its infrastructure and construction subsidiary, CICSA. The agreement, worth US$415 million, is for the rental and maintenance services of a state-of-the-art jack-up rig during a period of seven years. This rig, called Independencia 1, will be used for shallow-water drilling in Pemex’s Litoral de Tabasco asset.
According to the NOC, the Independencia 1 is the first drilling unit fabricated with 100% Mexican content that the company will use. During the contract’s undersigning ceremony, Pemex Professional Board Member Fluvio Ruiz Alarcón mentioned that national content is a vital subject in Pemex’s management decisions because it allows the company to keep the value generated by Mexico’s oil and gas industry in the country. He also said that having a higher percentage of national content also helps Pemex better integrate services in its value chain, fostering technology development and the building of human capital around the industry.
This is not the first time that Pemex has solicited Slim Helú’s services. As early as in 2006, the NOC hired CICSA for the drilling and completion of over 60 wells in the southern region – covering the Cinco Presidentes, Macuspana-Muspac, Samaria-Luna and Bellota-Jujo assets – and for the expansion of a petrochemical plant in Veracruz. Carso’s infrastructure and construction subsidiary has thereon been awarded with several well development contracts in Pemex’s main assets – including Chicontepec – as well as tenders for the construction of natural gas pipelines and marine platforms. Even the insurance company signed up by Pemex to cover any damages in its corporate premises belongs to Slim Helú.
The powerful businessman is certainly gearing up to seize the increasing opportunities in Mexico’s oil and gas sector, generated by the 2008 Pemex Law reform, the creation of integrated service contracts and the perspectives for a future energy reform. During the last decade, Slim Helú has transformed CICSA’s pipe manufacturing division Swepomex into a marine platform provider. CICSA has also acquired majority shares in Oklahoma contractor Bronco Drilling, along with minority participations in Houston drilling company Allis Chalmers Energy. To complement his acquisitions in the drilling and development sector, Slim has invested in other companies involved in the industry, such as Gas Natural Mexico; 15% of the country’s main gas operator now belong to Sinca Inbursa. Slim Helú also has an important presence in Spanish oil company Repsol and its Argentinian subsidiary YPF, through the IOC’s main stakeholder Caixabank.
Through his seemingly unlimited resources and his increasing stakes at experienced suppliers inside the oil and gas industry, Slim Helú could certainly become one of Pemex’s most important partners. CICSA’s sales, EBITDA margins and participation in Carso Group’s total revenue have grown along with the subsidiary’s business in the hydrocarbon sector. Pemex’s preference for national content will only increase Slim Helu’s chances of consolidating the prosperity of his construction and infrastructure businesses through a profound and profitable incursion in Mexico’s oil and gas sector.