2020: paradoxes, contradictions and more
Posted in Global Energy January 2021
We are closing 2020, a year of an unexpected pandemic. A difficult year, unique if we compare it with the other years lived by most of us. A year of different experiences: shelter, work from home, mouth covers and healthy distance. Many people affected, companies and services closed and unemployment, and worst of all, many lives lost, families affected and a virus still uncontrolled.
In the international energy sector, operating companies have moved on, most of them suffering heavy losses and exiting assets – including productive ones – to reduce the impact on their balance sheets. Many workers have lost their lives, despite the fact that companies took preventive measures from the beginning of the pandemic.
A recent analysis conducted by the Haneys Boone firm shows that in the United States alone, more than 45 small and medium-sized operating companies have filed for bankruptcy, the highest number since 2014, when the price of oil fell below $30 a barrel, due to the severe economic crisis.
In addition to the financial impact of these bankruptcies there is an even greater social impact; how many people were left without jobs everywhere the industry has operations, how many young professionals were left with a dashed dream of not being able to start their jobs.
But this year, 2020, has been a year of learning as well. We learned that there are other ways to organize life and work. We understood that for the operation of companies it is not indispensable to move thousands of people at the same hours. Many people discovered the true value of technology. Executives and managers discovered that value can be created at a distance. Video conference meetings became a routine way of working.
Personally, it also allowed us to discover forgotten details in our daily lives. We regained a place to work at home that our wives and children respect. We recovered the family conversation at various times of the day. We realized that our teenage children are already adults, and for those of us who have grandchildren, they are already teenagers and have become our technological advisors. We recovered so many details of family life, that many are considering rethinking the balance between personal and professional life.
Human beings are difficult to understand and although they may seem distant in their daily routine, in catastrophic moments they bring out the best in themselves. This is shown through solidarity. History has shown us that heroes or leaders are everywhere, and in these times of pandemic, those who swore to give their lives for their fellow man in the Hippocratic Oath have stood out, as well as those who followed the example of Florence Nightingale, that brave woman who turned nursing into a blessing.
It also showed us that on a very low scale of solidarity are many politicians who, despite the years, have not understood that their priority is the welfare of those who elected them. And those who, with their mistakes, erroneous decisions, lies and fallacies, have caused more harm than good.
Undoubtedly, we realized that the competence of those who govern matters, and makes a big difference. The professionalism of bureaucratic entities is critical. Understand that knowledge belongs to science and is not improvised. That listening to the wise exalts, not humiliates. That decency enhances and effective and timely communication is a gift.
The hydrocarbon sector in Mexico has shown a unique empathy and has been patient, despite the official sector’s rebuffs, private companies continue to move forward and believe in the future of this country. Since the beginning of the pandemic, they have sought rapprochement with Pemex through their associations. They have put their knowledge and experience at the service of the institutions for damage control and prevention. National and international service companies have continued to provide services to national companies, even without receiving their payments on time. And they have persisted in opening channels of dialogue to seek to work as a team with national energy companies, as they are doing in other countries.
Pemex needs support to move forward. Solutions are not by decree. It is not only about repairing refineries and increasing their processing capacity, it is about having clarity regarding what to do with the by-products they produce. Excess fuel oil becomes a serious problem if there are no options for marketing or using it. Hence the importance of your allies throughout the value chain. Your suppliers, your contractors, your workers, all are in the best position to help. This pandemic reality calls for teamwork, to seek a new, different relationship, more open book, transparency and trust.
There are organizations, guilds of service companies willing to recreate a new relationship with national companies that is honest, transparent, to help seek options that strengthen both parties, and that offer different ways to face a difficult year 2021 in all senses, especially economic and financial.
Let us take advantage of the Christmas spirit and the solidarity that flows in the environment these days, to reflect at all levels of the sector, in the industry, and let us seek to align purposes and efforts to start a new year with the best attitude and thus build a better future for the country.
Luis Vielma, is CBM Ingeniería Exploración y Producción President and CEO, a well-known Mexican engineering services company. Member of the International Society of Petroleum Engineers (SPE) and México Petroleum Engineering Society. Mexican Association of Service Companies (AMESPAC) International Relations VP. Frequent collaborator in three prestigious Mexican energy news publications, as specialized writer for the hydrocarbons sector. Speaker in national and international events of the energy sector. Author of three books, the last one “Chapopote”, a historical fiction of Mexican oil, which is considered the most original documented story of the origins of the oil industry in Mexico.