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Analysis

Pemex Plans to Acquire a Spanish Shipyard

Tue, 01/22/2013 - 12:59

In the beginning of May 2013, Pemex sent a letter of intent to shipyard Hijos de J. Barreras (HJB), a shipyard on the Atlantic Ocean in Galicia, Spain, to acquire 51% of the company’s stock. According to the letter signed by Pemex directors, the main goal behind the acquisition of the Spanish shipyard is to “transfer the technological knowledge of Hijos de J. Barreras shipyard to meet Pemex’s growing demand for specialized vessels, and in the near future, o†er Mexican shipyards the capability and technological knowledge to meet such demand.”

It is being argued that Pemex should be focusing on fostering the Mexican shipbuilding industry by investing at home instead of investing in foreign shipyards. Despite the fact that Pemex claims the investment in the Spanish shipyard is meant to foster the Mexican shipbuilding industry through technology and knowledge sharing, many people seem skeptical about this. During the administration of President Felipe Calderón (2006-2012), Pemex awarded Hijos de J. Barreras shipyard a contract to build a floating hotel – or flotel – worth US$190 million; however, due to the financial problems of the shipyard, the construction of the vessel has been jeopardized. People seem to question Pemex’s investment for a variety of reasons. Pemex is not only seen to be awarding contracts to companies without the financial capability to see them through, but its strategy might appear to run contrary to the anticipated renaissance of the Mexican shipbuilding industry: instead of providing jobs, raising local and federal taxes, fostering economic growth, and rebuilding an industry that has been virtually inexistent since the 1980s, Pemex is planning to invest in a foreign shipyard that is in the process of exiting bankruptcy proceedings.

Pemex and the HJB shareholders would provide the company with su·cient working capital to resume operations. Pemex claims this is an advantageous move for the NOC and for Mexico because they are acquiring a highly technological and capable shipyard that will allow Mexican shipyards to learn from their Spanish counterpart while at the same time providing Pemex with its much needed vessels.