In April 2011 we took the bold step of starting our entity in Mexico, Whittaker Mexicana SA de CV. We decided to go it alone with no local partner and so registered as a new start business, using trusted local staff and our in-country Ex-Pat manager, we have always had a UK Country Manager to date. Our current country manager Anthony Childers has been in the post for 2 years, all other staff members including the general manager are local Mexicans.
Our base is in Ciudad del Carmen, Campeche State, which was the main operations hub for Pemex’s offshore operations, we also work regularly In Villahermosa, Tabasco State which is a major Oil & Gas hub, and certainly the main support base for land-based operations in Mexico. We have continued to work in areas like Altamira, Tampico, Veracruz City, in the states of Tamaulipas & Veracruz.
The local Mexican labour is skilled, hard-working, and generally happy and engaged, with a zest for learning and personal development.
Mexico, like many countries, has its challenges, political changes, and underlying crime and social imbalance but these factors are, on average, manageable. After the energy reform of 2013 and the subsequent arrival of international oil and gas super majors the landscape has changed, and the future looks good for the Oil & Gas supply chain.
Some recent political changes with the Mexican government being less open and friendly towards international energy players has dampened the mood a little, but as with everything there is nothing surer than change so it will change again. The large international energy companies have made major commitments to Mexico and are currently drilling and getting ready to operate. The Mexican energy market will continue to be strong as it is geographically well placed, with a large border with the USA as well as strategic Atlantic and Pacific coastlines and ports, allowing access to Asian & European shipping routes also being the centre of the LATAM region - these factors won’t change regardless of which party is in power.
The question of whether to make a business international is very much down to the individual business but we would advocate that the Energy industry is one of the most internationally spread sectors in the world, so the answer is maybe best phrased as “Why not?”
Whittaker’s international growth has not been simple and has been a long process with hard work and many failures and challenging regulations, language, local market changes, not to mention a low oil price and COVID - but the rewards are there it’s a long game option. As the UKCS changes and matures, the environmental changes take place and therefore, the energy supply chain must look to different markets as part of their diversification, plan and adapt.
We have recently been successful with an international EPC based in Europe who came to us to deliver tertiary steel work for a project in Angola. That is a first for us, and an unusual shipping route, but the cost point and quality of our work in Mexico is competitive and high quality, meaning it is good for all parties. This model will see good growth in our operations in Mexico and we are looking to repeat this with other clients. Typical cost savings over Europe and North America are generally 20%.
Key lessons: learn your market, adapt your processes to the local rules and guidance, work with trusted locals, and get to grips with the language, all seem obvious, but all are required. Even with these key steps in place success is not guaranteed.
All companies must embrace diversification. We are of the opinion that SME’s do this the best, but all companies must do this across all sectors. As the energy transition ramps-up the energy supply chain will have to make changes to adapt. But there are great opportunities as much of the skill sets that we all have can be transferred to a multitude of applications, in Offshore wind, Hydrogen, carbon capture utilities & mining, etc.
It’s clear it won’t be easy, and the work may be harder for less return, but that doesn’t mean it’s still not good business.
At Whittaker we are currently working on a floating renewable power project and a hydrogen project.
These opportunities are at an early stage but offer a glimpse into the exciting future that may lie ahead for all of us. We have been working on a concentrated solar project in mainland Europe for four years, and we have an internal “Heat Pump” under development which is going well and will be coming to fruition within two years.
Read the latest issue of the OGV Energy magazine HERE.