The global energy sector is a source of concern for governments and populations as well as a locale of conflict. In recent years, the sector has experienced a fair amount of turbulence. We feature Filippo Fantechi. CEO of Contax Partners and winner of Business Worldwide’s CEO 2017 awards in the categories of Best CEO – Energy Industry Middle East’ and ‘Most Innovative CEO, Bahrain – 2017.’
The energy sector has, in recent years, gone through a time of uncertainty. A 2017 report by PricewaterhouseCoopers states that ‘the oil and gas industry has survived several particularly tough years with weak demand and low prices. It has been difficult to make strategic decisions and plan for the future,’ and only in 2017 is the industry beginning to show signs of recovery.
In the context of these changeable markets, the structural challenges of the industry alongside new technological changes such as distributed energy generation, renewables and the impact of digital technologies, suggest a need for a strategic response.
Data, information, strategic planning and business development seem set to move to the forefront of global energy production and development and companies like Contax Partners are well positioned to shape the market. Contax Partners has been providing consultation and strategic business development services for the African and Middle Eastern energy sector since 1985.
We talked to Filippo Fantechi. CEO of Contax Partners, about what makes his organisation uniquely positioned to address the challenges that lie ahead.
What role does Contax play in the energy sector, Filippo?
In a region new to consulting and consultants, Contax Partners was one of the pioneering consulting firms dedicated to supporting companies operating within the energy and energy-related space.
Since our quite modest beginning in 1985, Contax Partners has grown and transformed significantly and is now recognised as a leading provider of project data, research, strategic analysis, risk and growth advisory, and business development services to the Middle East energy and energy-related markets.
For over 30 years, we have been providing these services to national and international oil companies, contractors, subcontractors, service providers, equipment manufacturers, as well as government agencies, investment banks and private equity firms.
What is your core philosophy or approach?
Our philosophy is simple; provide fact-based research, analysis and a tailor made strategy to solve a specific problem for the client.
In contrast to traditional consulting models, Contax Partners prides itself on being an “end-to-end” service provider in the true context. As part of the various divisions of Contax Partners, we not only provide research, analysis and strategy, but we also take the clients’ requirements further and provide support in business development, fundraising and strategic implementation.
How have you managed the recent instabilities in the energy industry?
While historically the energy sector has been rather resilient to global economic factors, in recent years the industry has seen a fair share of challenges that have impacted growth and costs across the entire value chain.
This has also affected us. Over the last three decades, the consulting sector has seen a fair share of challenges, and we have not been immune to these.
While the consulting industry is typically cyclical and does well in times of economic growth, Contax Partners’ market is further impacted by the performance of the energy sector.
Given the niche we were in, we soon realised that owing to our lack of sector diversification, we needed to provide a diverse set of services that continue to support our business when markets enter their trough cycle.
The acquisition of a European engineering consulting firm, expansion of our business investments services into the coal agglomeration technology space, and the addition of our physical trading business were all part of our overall risk mitigation and growth strategy.
As a consequence of our diversified service, while project owner and EPC spends have slowed down, our Business Advisory Group was able to target private equity and investment groups interested in identifying competitively priced targets within the energy sector.
Our Business Development Team was able to support contractors and equipment suppliers target opportunities outside the region. And finally, our Business Investments Team was able to target coal mines looking for a cost reduction strategy by minimising the costs associated with additional coal fines production.
Thus, despite market conditions, Contax Partners has been able to take advantage of market downturns, and support businesses to survive and even thrive in these challenging times.
What’s unique about your offering?
Our ability to constantly look at opportunities which further support our internal risk mitigation and growth strategy, whilst also being able to systematically predict and understand the direction of the market to make the required strategic adjustments has helped to set us apart from our competitors.
From the selection of the principles we represent, to adding to our physical trading business – due to demand-supply mismatch – to expanding our reach to new markets such as Russia and Bangladesh, Contax has realised that to continue with the status quo in an ever-evolving market is a recipe for self-destruction.
As part of best practices within the consulting space, our recommendation to both small and large companies would be to constantly be aware of their value proposition and align it with the market requirement. If there is a mismatch, companies need to be sufficiently cognisant to realise that a change in service offering, geography or industry, may be a necessity and adapting to the market requirement will be the only way forward.
What would you say was your most significant achievement so far?
The positive word of mouth that we have received and continue to receive has been and is our most significant achievement so far.
While maintaining strong relationships with our existing customers, especially the NOCs and EPCs has been critical in our historical success, we are always pleased to hear from new customers on the positive references they have received about us.
It is this credibility which has enabled us to stand apart from our competition and has even helped us win projects against some of the global Tier I consulting firms. This means we have attracted several notable companies within the private equity segment.
What future trends do you see emerging in the energy industry?
Importantly, the rise of alternative energies is expected to be the next wave of growth, and therefore companies need to skill-up within this sector to prepare for the future boom anticipated from this segment.
The re-entry of Western contractors within the regional EPC markets has also been a welcome sign for everyone in an industry, which has traditionally seen severe price wars. With their re-emergence, sub-contractors and vendors appear to have taken the news positively and foresee an upward movement in margins going forward.