Petróleos Mexicanos (Pemex) continues on the path that Sacyr paved for it. The company wants to take on 1 billion dollars (729 million euros) of Repsol's debt in order to increase its share in Repsol from 4.8% to 9.4% by using the dividend that it pays the petroleum company.
This information was taken from two available versions of the polemical report "Context of increasing ownership of Repsol" ("Contexto del aumento de la inversión en Repsol" in Spanish) to which elEconomista has had access.
Pemex is trying to take on 60% of the management responsibilities, sensible if we consider that the firm is fronting 600 million in cash. According to the two reports, which will be published today on the elEconomista website, Pemex's increasing role in Repsol will allow the Mexican petroleum company to play a bigger role in operational and strategic decision making.
To have sufficient influence on strategic decisions made by a comparable petroleum company would require considerable investment (acquisitions of at least 50% of the company, which could be valued from 10 to 30 billion dollars), which signifies a clear blow for the minority shareholder that has no means of control and a potential violation of capital markets law.
In one of the reports, Pemex states that it hopes to achieve profits of 4.27 billion dollars (around 3.6 billion euros), that would basically be achieved by three concrete points: improve incorporation of reserves by 0.5%, increase success of oil exploration and production by 40%, and keep between 3% and 5% of dug wells in deep waters, seeing activity in more than 30 wells in the next 5 years.
Note, Pemex made this calculation assuming the cost of a barrel of crude are 83.5 dollars. In the second report, the calculation is annual and is cited between 90 and 105 million dollars per year. Pemex also contradicts itself in the report when assuring a plan to reinforce minimal capital in order to cover risk of a third intervention. "The strategic value of Pemex's participation is strengthened, and in case of a sale, there is a greater probability of earning a premium."
