UW one to one interview with Mr. Eric Bustamante, Oil International Services CEO. He has a strong conviction that Mexico can lead the region and understands the responsability the Private Sector has in thatConsidering the structural reforms implemented by the Federal Government, what is your opinion regarding Mexico’s economic performance?
I believe that the President has taken the righ decision in making structural changes. He has a clear vision that enables his administration to create reforms and implement them. When there is commitment from the President things happen.
The reforms are very important as they will level the playing field and bring sustainable development. Time will tell if Mexico overcomes Brazil or not; thus, I don’t believe this is a competition. On the contrary, this is the right time to take advantage of the opportunities available in the market. Businessmen have the responsibility to capitalizing those opportunities. We join our President’s effort in changing this country; slowly we can appreciate that Mexico is unlocking its potential.What are the main advantages of the energetic reform for Mexico’s economy?
This reform will bring a wide array of opportunities. Opening the energy sector will allow private companies to work closely with PEMEX. Previously, it was our state-owned company the only party assuming risk while other companies got paid regardless their finding of crude or not.
I believe that the upstream sector plays a key role in these reforms. It is of outmost importance for PEMEX to become more efficient in the extraction of oil in order to increase production and have more products on the downstream end. The market demands for the opening of the energy sector, which allows private companies to share the risk with PEMEX in the upstream sector. Mr. Coldwell estimates an increase in FDI of 10 billion USD because of the energy reforms. However, there are several corruption cases that have damaged the image of Mexico’s petroleum industry. Do you believe that Mexico’s local oil and gas companies are going to be able to win the trust of investors?
I believe that every company creates its own destiny. One of this companies that has been caught in a corruption scandal had a very particular business model. However, there are many other companies that have a completely different vision and business practices. We believe in growing gradually at our own pace, honouring the commitments with all our stakeholders. This business model has been successful for us. You can evaluate our success by the credit lines that we have.
The market is open only for companies that are here to do business the right way. There is no room for companies that have an unethical business model.Are Mexican service companies ready to meet the demand of international investors?
Not all Mexican service companies are ready to meet such demand. There are companies that have grown from in a family environment and have not evolved the way the market is going. In order to meet the demand of global investors, companies must have good governance, transparent procedures and efficient practices. Companies that do have all that in place can play in this market and are ready to form new partnership with international investors.Is OIS OIL ready?
For a very long time we had the vision of anticipating to the market. Actually, this is one of the key success factors of the company, we have been able to understand trends and consolidate niches. Proof of that is the fact that a couple of years ago we focused our efforts in providing off-shore services. We had the vision and invested in drilling projects. Now we are experts in the subject and have been awarded contracts recently.
We had to compete with the biggest company in the sector; however, we were able to win the battle. It is not about what we want to do but about what we have done that provides you a picture of the company.What is OIS OIL main competitive advantage?
Since our early days we had international exposure. We understand the ideology of international companies, especially American companies. We have representative offices in the United States. We are open to new partnerships and to develop further our business line. We look forward to forming long-term partnerships.
At OIS we have learnt to integrate solutions. We don’t want just to sell a product; we aim at working on large scale project. In order to do that we need to find the right partner that can compliment us and together we can participate in large projects. We look for certain traits in our partners, we must have similar identities. We are not looking to form 200 JV across the world; on the contrary, we want only a few productive alliances.
Mexican Companies used to be very selfish and not open to new trends. I suggest foreign companies that want to come to Mexico to take the time to study the market, choose the right partner, and then move into the market. There are many companies that work in other markets perfectly fine but they don’t succeed in Mexico. In Mexico you need a lean and efficient organization in order to be successful. The opening of the market creates several opportunities but also significant challenges.
I agree with you. However, there is a solid base for future growth. I believe that this reform finds OIS at the perfect time. We are eager to grow as a company and expand into new businesses. Throughout the company’s history we had good and bad experiences, which have helped us become what we are today. We are committed with our country and we want to prove that Mexican companies can lead the way in the oil and gas industry. I would like to invite any company to come to Mexico and join our President’s effort in developing the country. All the stakeholders in the petroleum industry have committed with the president to develop the sector in order to fulfill the country’s growth objectives. What made you open your first abroad office in Houston?
We are continent that Mexico lags behind in terms of technology. The United States is the world leader in terms of technology development. On the other hand, many companies in the US have the technology but they don’t have the know how in terms of doing business in Mexico. OIS is a good partner for that. Being present in the US gave us a global business intelligence; fortunately we have been invited by many American companies to join them in their bidding process.What opportunities do you see in the American Market?
I believe that there are huge opportunities in the American market. In Mexico we have plenty of experience and skilled human resources in order to tap those opportunities. Once you can prove American counterparts that you are a serious player and can fulfill their requisites many opportunities arise. OIS can take risk and access international financing. Slowly but surely the boarders are opening and more companies like ours will expand into the US.OIS began specializing in turbines, now the company has evolved and develop new business lines. Can you please share with us more information regarding your future plans?
As you said we started dealing with turbo machinery. However, we soon realized that we could add more services to make it bigger and more integrated in order to satisfy our client’s demands.How does a company like yours, which already has international experience, you can benefit from the synergies arising from its expertise and technology training?
Sometimes we want to "discover the warm water" and that does not work, you must believe in the position we are taking. We like to lead the businesses we are part of. We believe that rules must be clear from the beginning in order to promote the development of the industry. There are only a few companies have financial muscle as important as you seem to have.
I clarify, this applies only in certain projects; there are larger projects that exceed the amounts in the market in which you can finance that way; more than financial muscle would say it's a business model that well structured for financial expenses can be covered in full during the life of the project itself.
Moreover, it is also important to note that we have made this commitment to grow and differentiate from a family business. We have chosen to have corporate governance with a board of directors that way we have more control within the organization. In addition, we divided the organization in two large blocks. What are the company objectives in the short to medium term?
We believe in putting objectives in our company. Our vision is shared by our entire staff and helps us reach those objectives that we have put in place. Our core business is offshore; therefore, we must invest in technology in order to find new business opportunities. We aim to increase our participation in the industry. We must anticipate the market needs and try to offer the best quality services possible. In the future we want to tap into bigger upstream project as we have the conditions to offer quality service.
We also understand that there are certain strategic assets to increase production and that there are people that want to come to Mexico to provide those services. It is important to emphasize that companies must come to Mexico and invest in long-term projects. We are exploring opportunities in Asia in order to understand their needs and the situation of the market. The energy industry is in constant change. Now, there is a lot of interest regarding Shale Gas. How important is for OIS the investment in technology, innovation and human resources?
Our objective is to for alliances with companies that have already develop their technology. With respect to our people, we convey the message that this is not a day to day job, this is a lifestyle. I am very passionate about petroleum industry. This is an industry with many obstacles which makes you look forward in order to succeed. I am grateful for the team we have working at OIS and that trusts my leadership.UW: You are a member of one of the most important industries for the development of the country. What does it mean for you to hold this responsibility?
I am grateful for the life that I have. As I mentioned before, I have been very active since I was a kid. I started selling cheese with my brother while we were at school. I also worked for a securities house and then I started thinking about opening my own company.
It is very rewarding having your own business. I am an Engineer, and an Administrator that had no experience in the oil and gas industry. When I started it was very frustrating but slowly I caught up and was able to put OIS as it is today. I am very fortunate to be where I am today and I thank my parents and God for that. We have been able to understand the man behind the business. What drives you to take this company forward?
There are many things; we are committed towards developing this company. There are many families that depend on us; we can’t fail them. Of course my family is another key motivation for me. I want to grow and become a relevant personality in the sector. This is not a job it is more of a lifestyle. In this industry you risk almost everything to grow. When my father passed away the world was different. Now we are looking into the future while remembering the past.