Column: Luis Vielma Lobo
The transition of Pemex from a state-owned company, to a State-owned Productive Company, was announced as part of the Energy Reform. More than 80% of the country’s 2P reserves and more than 20% of the country’s prospective resources were allocated to it. The main idea was to leave an important base for Pemex Exploration and Production to develop a business plan that would also harness the associations it could enter with other companies.
This process was affected by the change of the oil market, which began back mid-2014 and created a very sensitive environment that, until today, 5 years later, still fails to be stable. Nevertheless, and despite of the change in the strategic orientation of the new government that came into office 50 days ago, the State-owned Productive Company continues with its work using the same schemes that it has been managing traditionally. So far, there has been no change in the external scope that would indicate that something is happening.
Uncertainty is still perceived regarding the immediate future of the company, as the trend in the main indicators continues downwards. Although it has triggered a bidding process to award packages of wells among several national drilling companies, there is no real reactivation of the sector.
Depending on where a person is located within an organization, this could have different readings; for example, at a corporate level, the reading could be that tasks to achieve transformation, ordered by the President of the company, are being carried out, but at the subsidiary level everything continues as before.
A transformation to trigger real change, at the level of each business or subsidiary, has to start with a very clear strategic vision. This vision makes possible to establish the most important strategic objectives, related to each segment of the business. That is exploration, production, refining, gas and petrochemicals, the vital processes of the value chain, fully supported by the enabling processes of drilling, maintenance, logistics, supply, and marketing, among others.
The vision is crucial for defining the strategic objectives and, at this time in which trend changes are required, these needs must be reflected. Exploration is the basis of the business, where discoveries are made and therefore it demands knowledge, skills, and resources. The production or extraction is responsible for providing daily volumes from wells. This business in any operating company, national or private, contributes more than 90% of the income, hence the priority of its analysis and consideration.
We are struck by the fact that, until now, the priority that has been perceived in public opinion since the beginning of this new government has been towards refining. The argument or justification is based on the low efficiency of the refining process, in terms of oil production. More recently, the issue of fuel theft —popularly known as “huachicoleo”— and the argument, in this case, is the issue of corruption and the cost it has for Pemex and for the country.
There is nothing to object regarding this important goal of the national government, but talking about Pemex, it is necessary to go over the reasons that are affecting the main indicators of the company in every business. If the most important changes associated to productivity are not made, it will be difficult to achieve changes in trends.
There are important companies that have gone through similar situations along their history but they have overcome them, by discovering new reserves and exploiting them or making changes in the organization, changing the cycles of time that incorporate production in traditional assets. The organizations that change trends are organizations integrated with multidisciplinary work teams, with programs of rapid tasks –fast track– to carry out the established sketches and the achievement of results.
Eliminating bureaucracies and disciplining the organization are two of the benefits incorporated by changing from functional management to multidisciplinary work teams, using specific leadership for projects with assigned budgets, to get the committed and expected results.
The suggestion is to have, at the highest level of Pemex, a team responsible to taking control of the plan of change or transformation that has been defined –if this is the case– to move quickly and effectively in the trend of change, necessary for the company and the country.