This week’s interview of the week is with Carlos Sandoval, Commercial Vice President of Arendal, an offshore and onshore engineering procurement and construction company.
Q: How is Arendal taking advantage of the opportunities brought about by the new environment in the oil and gas industry?
A: It has taken a few years for the Energy Reform’s benefits to really become tangible. These things take time, but now the scenario is buoyed by higher oil prices and sustainable supply and demand. The new environment for the industry in Mexico is far more diverse, with many participants injecting investments, planning projects and building facilities in upstream and midstream. Arendal is making the most of this momentum by taking advantage of the opportunities happening in midstream and upstream, where Mexico has a long tradition. We are undertaking projects to consolidate our own portfolio. We have participated in bids and have recently won projects with private clients and PEMEX.
Q: How has the experience of past licensing rounds prepared the industry for its future?
A: Everybody is expecting the licensing rounds to turn into actual work in the form of developed projects. This has been the situation with some companies whose investments are materializing and are the way ahead in the E&P process. We expect to see an open competition promoted by the upstream operators and a deeper commitment to boosting the Mexican industry. Companies need to speed up their investments, get approvals for the required permits and start executing their projects so the industry and society can realize the benefits.
Q: What value do you provide as one of the largest EPC companies in Mexico?
A: We have two different markets: onshore and offshore. Today we are the only 100 percent Mexican company that can build a Process Hydrocarbon Plant with our own staff, interconnect it with pipelines across the country, build a land-sea transition (beach approach) with our own machinery (we have the largest HDD rig in the country), and lay the pipeline up to 120m of water depth, while achieving high performance standards in quality and EHS.
Q: What success factors are still necessary for the unconventional resources sector to flourish?
A: There are three success factors for unconventionals to take hold in the market. The first is rules, mainly environmental rules. In this aspect, Mexican regulators are not quite prepared, and this will take some time to evolve. Secondly, there is logistics. Since this is far more complex than with conventional networks. The logistics infrastructure should be able to support fast-paced movement of people and materials. The logistics should remain well connected in real time at all the time. Our current logistics system is not well prepared in this regard. Lastly, the mentality regarding costs and cohabitation with the conventional market must change. Mexico has a long way to go before these projects become a reality.
Q: How will Arendal’s operations evolve over time and which projects will you develop?
A: We have seen how the oil and gas industry has changed. After the fall of oil prices and the lack of PEMEX investment, the market has evolved to have multiple players in the three segments. Things are in motion and we need to move quickly and with a concerted effort to capture opportunities. Newly arriving clients are forcing the supply chain to expand its capabilities. In Arendal’s case, we are witnessing an increase in the workflow coming from the new investors and operators in the oil and gas market. We have a project with PEMEX to install four subsea pipelines to increase and sustain its production. We are building a storage facility for importing fuels for a key global storage company. This is their first project in Mexico. We are also building a gas pipeline for a national midstream entity. We are taking different approaches based on the variety of projects we have been awarded, as we wish to grow along with the upstream, midstream and downstream sectors in the country.
This is an excerpt from the 2018 edition of Mexico Oil and Gas Review. If you want to get all the information, plus other relevant insights regarding this industry, pre-order your copy Mexico Oil and Gas Review or access our digital copy.
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