It was August of 2018 and I remember the look of uncertainty with which I observed the technical files of different companies, legally constituted and with permits in process or in order, (5) that they requested a link with a key gas buyer or with that company that had the capacity to meet the business opportunities to buy liters or barrels and that could also store them, from here I remember the meetings and multiple talks I had with Raúl González, member Oil and Gas Alliance, colleague and friend, who is the CEO of Swiss, Integral Petroleum for Mexico, who explained to me how the business opportunities in the purchase and sale of gasoline in international markets and the elements so that it happened, and I saw how my experience in this business was possible thanks to the energy reform, which grew at the rate of the trend or at least at that time we thought, because few want to stop being served by PEMEX who assured the supply and only explored the business opportunities of a future trend.
They were around more than 23 meetings with follow-up, of which we only managed for the different needs of competing with PEMEX, that one will materialize in a business where the greatest difficulty was securing the supply due to the contractual infrastructure difficulties.
Now in January of 2019 the context seems to accelerate, becoming a trend and 3 business opportunities are foreseen for those who dare to invest in them.
What is the current context of the development of these business opportunities compared to the shortage of gasoline?
Since the Energy Reform, it was planned to solve the shortage of gasoline by seeking to solve the structural crisis of all productive sub-sectors.
Before the energy reform, Mexico was experiencing a pressing structural crisis, especially in the liquid hydrocarbons sub-sector, where PEMEX dominates the permanent monopoly in the storage, distribution and sale of gasoline in the national territory.*
We also experienced critical alerts, such as the interruption of the supply of natural gas that paralyzed industries and drove away other productive sectors such as the automotive and electric sectors, reflecting a structural crisis derived from the previous model that was unable to keep pace with an economy that rapidly industrialized and is unable to meet the demand for hydrocarbons.*
Derived from this scenario, the previous federal government through the Ministry of Energy granted the CNH powers along with the creation of other centralized agencies in the search for private investments to increase the storage and transportation capacities of gasoline reserves in national territory.
Upon the arrival of the administration of President López Obrador, the Secretary of Energy focused on reviewing hydrocarbons exploration and production contracts and determined to continue the rounds within 3 years, in addition, it requested compliance with the contracts and production plans committed in the case of liquid hydrocarbons, derive tendency to seek lower prices that are subject to the international price and are subject to the contractual refining, transport and storage capacities.
The Political Effort In Mexico Is Committed To Disappearing Gasoline Theft From Within PEMEX To The Service Station.
The context maintained in the national plan against the theft of fuel presented and the creation of decentralized agencies presented within the first months of the administration of Andres Manuel Lopez Obrador and its constant messages, where it shows the current government is willing to invest, where it is willing to favor permits, conceptions and alliances that will promote not only the fight against theft and shortage.
Today it is possible to generate more business opportunities with the transportation and storage of gasoline, as well as allying with PEMEX to strengthen the fight against theft and shortage.
The Businessmen of the Liquid Hydrocarbons Industry Will Seek to Maintain Supply at Their Service Stations.
The consequences of the fight against fuel theft have led to paralyze cities and entire industries in our country, causing panic purchases and generating losses in the final sale estimates for operators, equally from those who continue to manage the PEMEX brand, as new operators such as Akron, TOTAL, Shell, BP, Chevron, Hidrosina, Oxxo Gas, La Gas, among others, who take advantage of business opportunities in the national territory.
The thing that will lead these operators to seek not to depend on PEMEX and make one of its short-term priorities, the use of permits for distribution of gasoline, granted in the last administration and follow the steps of those who already do.
One of the most competitive ways to make a PEMEX logistics is to establish a competitive landscape, where you have to improve your transport and storage conditions to compete for final customers who are subject to purchase by preference and not by monopoly.
That is why I present the following
3 Business Opportunities in the Current Context of the Gasoline Shortage in Mexico.
Storage and Distribution
Although the opportunity is clear from the beginning of the energy reform, one of the issues that most worried investors before the trend of shortage and fight against theft, it was the competition installed in PEMEX, its control in the supply for the end user and the granting of permits by the regulators as well as the lack of infrastructure to support security and installed operability.
Today the vision is different, according to our member Oil and Gas Alliance, Edgar Gutiérrez Peláez General Director of the Mexican HST, who since the beginning of the reform to date made the investment in our country to improve storage conditions with its first HST-1 project, with an installed capacity of 875,000 barrels, it visualizes possible partnerships with the government for the construction of storage infrastructure, which increases the speed to make more investments, as well as business opportunities with less uncertainty compared to the competition with PEMEX.
Refining Related Services
The government will clearly seek to supply the demand for 40 million units in its vehicular part, in its national refining plan it expects only in this first year to rehabilitate the refinery in Minatitlán, Salamanca, Tula, Cadereyta, Madero and Salinas Cruz to process 1 million 540 thousand barrels of oil per day, according to their design capacity.*
The clearest business opportunities derived from these services range from remodeling of units, purchase and sale of industrial or specialized parts, maintenance and construction services for the refining, among others that require reliable suppliers to comply with the temporality of the plan.
In addition, the construction of the refinery in the port of Dos Bocas, Tabasco, Mexico, which will have 17 processing plants, 93 storage tanks, and a self-sufficient power generation system.*
Technology, Monitoring, Security, Control And Branding
Beyond the obvious new business opportunities, such as the transportation services that the current government is already requesting, under this same trend, there is a comprehensive service of administration and monitoring technologies in the handling of hydrocarbons, as well as in the control and security of gasoline until its arrival to the final user, where the main clients, thanks to the context of the reform and the position of the new government, will be in two classifications:
- The Mexican government represented by Pemex.
- The rest of the private investors that have the permits to compete against the infrastructure of Pemex.
In the context of branding services in business opportunities, we must not forget that the PEMEX brand in the service stations before the energy reform faced problems with its brand value, above all because of the feeling of the end users of not receive full liters (according to PROFECO gasoline report *).
Today to pursue the theft of fuel I have no doubt that this will continue until the final delivery of the liters we receive as end users.
The entrepreneurs of the service stations with PEMEX* brand and the rest of the brands will compete to sell their own gasolines to the final user, which requires «Branding» capabilities beyond Marketing actions.
Whatever the context in the coming months, the liquid hydrocarbon market will be far from being segmented, much less closed to current service station concessionaires and borrowers, we will see a PEMEX logistics with its allies face a competition for being the preponderant leader in the distribution, storage and final sale, where its competitors will invest in infrastructure and installed storage capacity with possible alliances with the government or private industry, which will generate a «battlefield» of business opportunities, as part of a macro growth trend in our national territory.
* Paraphrase vision 2040 of AMEXHI, page 10. http://amexhi.org/2040/VISION2040AMEXHI.pdf
* Introduction to the national refining plan. https://www.gob.mx/sener/es/articulos/el-gobierno-de-mexico-anuncia-el-plan-de-produccion-de-combustibles-que-asegurara-el-acceso-a-la-energia-y-al-desarrollo-equilibrado?idiom=es
* PROFECO fuel report https://combustibles.profeco.gob.mx/qqg/?page_id=13
* List of Service Stations https://datos.gob.mx/busca/dataset/estaciones-de-servicio-gasolineras-y-precios-comerciales-de-gasolina-y-diesel-de-cre
