Repsol forces Pemex to approve management decision, not above 10%

Repsol has signed an agreement with Pemex. Repsol, a Spanish petroleum firm, came to the agreement with the Pemex, a Mexican petroleum company, days after its CEO Juan José Suárez Coppel appeared before the Mexican congress to explain why his plan to join with Sacry and buyout Repsol failed.

Details are lacking on the agreement between the two companies, but it is known that it was driven by last Thursday's meeting between Brufau and the Mexican Secretary of Energy, Jordy Herrera. Further, the agreement will allow Coppel to save face in front of Congress even though he will be forced to approve Repsols management board decisions and take back statements made and signed during his "parasocial'" contract with Sacry. A CEO was named in this contract.

Pemex has promised to keep their participation level between 5% and 10% (that is to say, the company can only reduce its presence), which for a ten year period would prevent more buyout agreements like the one signed with Sacry. Repsol spent several weeks negotiating the agreement with new Pemex-Repsol advisor, Marco Antonio de la Peña, who is legal director for Pemex. José Manuel Carrera was left out of the conversation and is considered to be close with Sacry ex-president Luis del Rivero.

The agreement signed between both parties creates an alliance based on principles of reciprocity, mutual earnings and collaboration, and a view for the long term. The scope of the alliance will cover several business areas: Upstream and GNL in America and Downstream in America, Spain and Portugal. Between them, each company will evaluate potential business opportunities.

In fact, Pemex has already identified a series of proposals that were mentioned in a document associated with the buyout. But the current agreement does not flesh out details about these proposals. Within the legal and judicial frameworks that regulate the hydrocarbon sector in Mexico, Pemex will count on Repsol as an ally to evaluate and promote business opportunities that are mutually beneficial.

To complete the agreement and iron out any legal implications, several committees will be formed: a Strategic Committee, Upstream and GNL Committee and Downstream Committee. All will have joint-representation from Pemex and Repsol and will serve a consultants and informants for both companies.

Protected by by-laws

Further, Repsol is making sure to protect its rights to put a stop to deals or hostile takeovers such as the one attempted by Pemex and Sacyr last summer.