Since the Energy Reform of 2013, the oil sector in Mexico has been opened to private investment, both domestic and foreign. One advantage that this reform presents to investors is that of logistics. Companies can sublease Mexican pipelines – which saves them considerable transportation costs – and Pemex, in turn, gets a steady stream of revenue.
Thanks to this scheme, the large foreign oil companies have managed to occupy 30% of the hydrocarbon market in Mexico. However, according to a Forbes report, 95% of them directly buy Pemex oil products that, once processed, trade and sell directly to users. However, if a company depends on Pemex’s infrastructure for its own operations, it also absorbs its risks. Anticipating this situation, ExxonMobil decided to invest in its own logistics network, hire independent carriers and import fuel extracted from the United States. Thus, it is clear that a central part of ExxonMobil’s strategy in Mexico is not to depend on Pemex’s infrastructure, which adds value to its services.
ExxonMobil transports fuel via train from Texas to El Bajío. In this region the fuel is stored since that is where most of its gas stations are located. Subsequently, it is distributed to each locality through independent transporters. In addition, Exxon plans to diversify its supply network by sea instead of increasing ground transportation.
It is worth noting that a fundamental part of ExxonMobil’s business strategy in Mexico is the Demand Response Team, whose mission is to manage risks in the country and mitigate problems arising from Pemex’s operations. Thus, the Demand Response Team was created to deal mediately and operationally with the damages of a crisis, but strategies were also proposed to mitigate the damage in anticipation of a crisis. This team is part of the risk unit of the oil company called Operations Integrity Management System and was essential to overcome the crisis that caused the closing of pipelines of Pemex for the combat the ” huachicoleo “.
This risk management group is made up of 40 people, with operations in both Mexico and the United States and, in this case, had the task of addressing the interruption in the supply of fuel in Mexico as quickly as possible. Thanks to crisis mitigation strategies and the fuel logistics network sold by ExxonMobil stations in Mexico, the oil company increased its sales in the Bajío, a region in which most Pemex-dependent gas stations ran out of fuel.
Before the shortage, ExxonMobil moved to its Bajío storage centers enough inventory to continue operations for 20 days. In the same region, Pemex only had inventory for less than three days.
During the shortage, one of the gas stations of ExxonMobil published a tweet that said the following: “Shortage? In Mobil stations we do not have that problem, “with an image of a pipe filling the gas station. Given the sense of panic in the general population, this type of communication favored that various media presented to ExxonMobil under headlines such as: “The company that is saving Guanajuato from cases of shortage” or “Keeps Exxon constant supply”, which positioned the mark remaining in the mind of the users who did not find fuel in the stations of the competition.