PEMEX Loses Millions Trading Repsol SharesBy Karin Dilge | Thu, 02/10/2022 - 17:51
PEMEX revealed losses stemming from 2017 of €55 million (US$62.5 million) due to its investment in Repsol shares. The information surfaced amid new spying allegations against the Spanish oil company’s president. What is more, the troubled relationship with Repsol has become a significant part of President López Obrador’s grievances with Spain, leading to last week’s suggestion to “pause” Mexico’s relations with the country.
The relationship began when the NOC obtained a joint share of 29.8 percent in the Spanish construction firm Sacyr in 2011. This gave PEMEX a voice in Repsol’s Administrative Council because of Sacyr’s stake in Repsol. To finalize the purchase and increase its involvement in the Spanish oil company to 9.5 percent, PEMEX incurred in US$600 million in debt to complete the required US$1.6 billion. In 2017, PEMEX sold most of its Repsol shares representing a 7.8 percent participation in the company, which it acquired mainly during the Felipe Calderon administration. As a result, it lost millions of dollars. According to the previous administration of the state-owned company, headed by Emilio Lozoya, PEMEX bought every share in 2011 for €19.95 (US$ 22.67), while the Supreme Federal Auditor (ASF) reported a figure of €20.14 (US$22.89).
Lozoya decided to sell and justified the decision on the shares’ low profitability rate. Moreover, Lozoya explained that the NOC’s anticipated added benefits failed to materialize and assured that the sale would not represent a significant loss for PEMEX. However, not only did the NOC lose millions, it failed to gain access to Repsol’s deepwater exploration technology, a major added benefit the company coveted. The decision came in January 2017, when the NOC incurred in heavy losses, according to a report sent to the US Securities and Exchange Commission (SEC). Today, the NOC still holds 1.69 percent of Repsol shares.
The Mexican government said it uncovered the truth about the losses thanks to a Spanish High Court’s investigation on an espionage case involving Antionio Brufau, President of Repsol. Brufau allegedly hired a security firm to spy on Luis del Rivero, then-president of Sacyr, to block its bid to takeover Repsol together with PEMEX. It is the second time that Spain investigates Antonio Brufau, along with his alleged accomplice Isidro Fainé, former President of Caixaban.
“There was a plot at the top, an economic, political promiscuity at top of the governments of Mexico and Spain. But for three administrations running, they plundered us and Mexico took the worst of it. So, the best thing is to have a break, a breather (in relations)," Lopez Obrador said during his daily briefing, regarding Mexico’s relationship with Spain, even mentioning Repsol as a company that benefitted from this “promiscuity.”