This week’s Interview of the Week is with Juan Pablo Vega, CEO of Naviera Integral. We discussed how Naviera Integral has reshaped its business lines to maintain its advantages in a competitive market.
Q: How would you evaluate Naviera Integral’s development over the past year?
A: Last year presented some challenges for the maritime industry as oil prices had not stabilized and we operated under difficult circumstances. The cuts in PEMEX’s budget presented further challenges as the industry had to adapt to narrower public expenditures. This year the industry has picked up again mainly due to the US$60/b prices we have seen since April. There are new licensing rounds set to be launched and we are waiting for bids to roll in. We are always looking for technological changes applied globally and how to bring them to Mexico and we plan to continue following those trends. Moreover, through the technology innovations on our vessels, their cleaner engines and the cost-effective solutions we offer, we have been able to remain competitive in the market despite the adversity and we are confident about the company’s future moving forward in light of the improved market circumstances.
Q: What are some of the most recent changes to your business lines?
A: We ventured into the tourism industry, specifically in the southeast of Mexico where the market is as promising as it is competitive. We introduced Dutch vessels to explore our opportunities there and we have been successful so far. We apply high-security measures, environmentally-friendly practices and we rely on a series of certifications and procedures that set us apart from our competitors. Regardless of how competitive the maritime industry is in the Mexican Gulf, we have competed successfully.
Q: How has Naviera Integral maintained its market advantages amid the industry’s changes?
A: Now that the Energy Reform has entered into full motion and operators are starting to explore and develop their awarded blocks, we have reached out to a larger number of clients. We provide efficiency, we are willing to provide companies a value chain and new technologies, so we have different competitive advantages that set us at the forefront of the service providers. We submit to the rules and regulations from local authorities, comply with inspections and we meet the requirements stipulated by the international maritime treaties signed by Mexico. Now that the industry will start tapping deepwater developments we will introduce new technologies and procedures to meet the necessities of those companies coming into the country. We perceive new market horizons.
Q: What steps have you taken to meet the requirements for the shallow and deepwater segments?
A: We awaited a more active implementation of the Energy Reform in previous years, but the drop in international oil prices constrained investment from coming in large numbers and this harmed the purpose of the licensing rounds. Now we are waiting for the awarded contracts to start providing their benefits and with Mexican crude reaching the US$60/b threshold, we expect more companies to be attracted to the country. For deepwater activities, we have equipped our vessels with high technology, mostly coming from The Netherlands, which is the best maritime market in the world. For shallow waters, we updated our fleet based on PEMEX’s requirement to have vessels under 15 years old, which implied a challenge for us since it required a large investment. Nevertheless, we were able to meet the requirement and provide the service.
Q: What is the message maritime companies should give to the incoming federal administration?
A: I would pass on the message about the Energy Reform’s protection and shielding institutions to keep them unaffected from potential governmental changes. All the agreements, contracts awarded and procedures should be respected. I also think companies should consider that the reform entails a well-articulated regulatory framework that will remain regardless of political cycles. The reform was created for the country’s welfare, to introduce new technologies and new modern procedures, so the next government should be respectful of norms and regulations and look for benefits for the country.
Q: How will the current infrastructure development projects and the Special Economic Zones (ZEEs) in Campeche and Tabasco boost the maritime industry?
A: The more port infrastructure, the more opportunities maritime companies will have. The port of Veracruz has quantified expansion opportunities, as many as Tamaulipas, and investments in these trade zones should continue. This is the key to open the business door for us as transporters to make the most out of our coastline and the opportunities we have for trade. When it comes to ZEEs, the impact should be positive since they are created in zones with lower GDP levels to equate them with more economically-developed areas. They have to incorporate new industries that are not established already in the country to reduce imports by producing these goods at lower costs. Overall, the big picture seems positive and we are happy to be part of the change.
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.