Manuel Chinchilla: “Our business model is to increase oil production in Venezuela”
Southern Procurement Services (SPS), CEO and leader of SZC Group, talked about the Venezuelan Oil Industry productive situation and highlighted its business model which is supported by a non-conventional financing scheme.
Manuel Chinchilla leads one of the fastest growing oil service companies in Venezuela during the last decade, his latest major project is the recently granted Campo Urdaneta Lago, located in Zulia state. SPS is characterized by offering services for all the productive chain in the hydrocarbon industry.
In the middle of a convulsed country by a socio – economic reality qualified as “crisis” by economists and sociologists. We located in Caracas which is the capital of the nation with the largest proven reserves of crude oil worldwide, the office of Manuel Chinchilla a young entrepreneur who after investigating and traveling through different countries in Europe, Asia and America, decides to fully enter into the Venezuelan oil market, evaluating advantages and risks and betting on a business model that he calls innovative.
After consulting him about Venezuelan oil production decline, Chinchilla said that “there has been different factors, an international price situation that has caused the investment scheme to fall. Logically, you cannot maintain an investment plan to raise oil production that was calculated at a barrel price of $ 80 to $ 90 and continue with the same plan after the barrel falls to less than $ 40. That has been one of the things that has affected not only Venezuelan’s production but worldwide production.”
He also mentioned that: “Increasing oil production in Venezuela is very simple with companies supporting from the private sector not only SPS, that can continue investing and betting in Venezuela. Therefore, before I start investing in Ecuador, Colombia, Brazil and Mexico where we have participation today, SPS has taken the decision to focus on raising production and generating our greatest added value in Venezuela.
SPS Business Model.
“We are changing a business model and implementing an innovative scheme never seen before in the Venezuelan oil industry, it changes the paradigms with new financing and production schemes with mechanisms to get out of this bottleneck that production in Venezuela has” he says. Chinchilla, CEO of SPS.
This is supported by a vertiginous growth of this company, that in less than a year has tripled the number of workers in the country and reached a significant participation in the main projects of the oil sector.
“SPS is responsible for all the production chain, that allows us to have a better planning and not to depend on a third party in the execution of the works and thus we guarantee a better financial level. “
In the oil industry it’s normal to hire or subcontract intermediaries for each one of the phases which are part of the production chain (upstream, midstream and downstream). Chinchilla with
his business plan offers an integrated scheme, backed up by international manufacturers allies guaranteeing first-class technology, proven experience and an adaptable equipment for the different needs of the Venezuelan oil fields.
“We do not work with intermediaries we must have guaranteed what we are doing, have access to the technology and how it is being manufactured, because we verify from the beginning of production units,” Chinchilla emphasized.
SPS seeks to stand out among the companies as the one that offers integral solutions in the hydrocarbons market, with an integrated service scheme consisting on supplies, installation, maintenance and operation of the Equipment with high technology and implementing methods that may represent a risk for other companies.
“Many companies that are in the procure business simply sell you an equipment and leave it at the ports, but they do not take care to ensure that it is installed properly, if it works or if it is actually raising production. That is where we have begun to change paradigms, in many cases we have given away our service to verify that the equipment that is being supplied, effectively raised production or meet the objectives for our customers.
Some may say that seeing is believing, however, currently in the Venezuelan reality, many companies are betting on the big, with high expectations that they will surpassed the negative forecasts of the economy. Could SPS be an example that the small fish outweighs the big?