Pemex and Repsol: what’s going on?

Pemex refinery in Tula, Hidalog statePemex, Mexico’s state oil company, has strenuously denied a report in Spain’s ABC newspaper which had said it was looking to team up with Mexican telecoms billionaire Carlos Slim to buy 10 per cent of Spanish oil group Repsol (Pemex already has 9.3 per cent) – all as part of a strategy to oust Repsol chief Antonio Brufau. The report cited ‘unnamed sources’.

Both sides are denying the deal. But boy, there’s a lot of media chatter about Pemex, Repsol – and YPF.

Pemex said in a letter to ABC that the information was “false” and “misleading”. The Slim camp also told beyondbrics it was untrue.

Pemex’s letter added:

This information has no basis whatsoever. Pemex has not had talks with Carlos Slim or any other businessman or institution to find like-minded investors in Repsol, as the story says; nor is it planning to present such a plan to its board.

When it comes to aligned interests, it’s worth noting that in the past Argentina has seen in Pemex a potential ally to further its dream of getting rid of Brufau and closing the chapter on the nationalisation of YPF, which heaped investor opprobrium on Buenos Aires. And as beyondbrics has noted before, it’s not the first time that questions have been raised about Pemex’s role as a kind of go-between.

But it smells like something is up. Online news site El Confidencial, also with unnamed sources, talked of a “plot” and said it was lining up bankers and lawyers to call an extraordinary shareholders’ meeting to oust Brufau.

Argentina’s La Nación has also been pushing the line that Pemex is interested in getting Repsol and YPF to agree a deal to end hostilities, and Pemex has been vocally critical of Repsol.

The heads of Pemex and YPF are friends and Miguel Galuccio, YPF chief, sees plenty of scope for their two companies to work closer together (such as developing Mexico’s shale potential), and he recently told the FT there was a possible role for Pemex to negotiate an accord. As the FT reported:

“We have very close relations with Pemex,” he [Galuccio] says.

Mr Galuccio knows Emilio Lozoya, Pemex chief executive, from his time in Mexico with Schlumberger, the oil services company. Analysts have also pointed out that Repsol needs the support of Pemex if it is to expand its business in Mexico.

Like a Latin soap opera, the air is thick with intrigue and betrayal. Stay tuned.

Related reading:
YPF’s Miguel Galuccio working hard to attract investors, FT
Argentina vs Repsol: a game of chicken, beyondbrics
Repsol secures Spanish court case over YPF expropriation, FT
Pemex takes Q3 hit amid falling crude exports and currency losses, FT