From Producers to OperatorsWed, 01/20/2016 - 13:04
Recently, Grupo Idesa, famous for its participation in Etileno XXI, entered into a joint venture with International Frontier Resources Corporation, a Canadian company with considerable upstream experience. José Luis Uriegas, CEO of Grupo Idesa explains, “The group considers the opening of Mexico’s energy sector an extremely interesting opportunity for many companies, and particularly those that have experience locally, like us.” In fact, the group hopes to seize the opportunity to gain experience in upstream activities, and to gain a few fields in the bidding rounds, which it will develop in cooperation with its new partner, upon which it will rely to help it understand the obstacles and challenges faced in production. “In our 60 years of experience, we have had five joint ventures, three of which are ongoing, and all of these have been successful. We have dealt with a Brazilian partner, a German one, and a Canadian one in the past, showing we have experience in international partnerships,” Uriegas explains. Furthermore, when deciding upon this joint venture, Grupo Idesa met with International Frontier Resource Corporation and found that their cultures were complementary, leading to many synergies between both companies. “This will be an asset that will be invaluable when we face unavoidable challenges,” the CEO insists.
“If this venture is successful, Grupo Idesa would separate into two different business lines, possibly remaining dependent on the same holding,” Uriegas reveals. “On the one side, we would have our petrochemical basis, and on the other, we would have production of feedstocks.” In ten years, Grupo Idesa hopes to have grown in the petrochemical sector. To fuel this growth, the company has decided to issue an IPO, a plan that should start between 2016 and 2018. Uriegas states that the group will only become public once Etileno XXI and the CyPlus Idesa projects are completed. “As a capital-intensive company, we can no longer finance our projects through loans, as has been done in the past, and the most convenient way to receive additional capital is through an IPO,” Uriegas explains. The group has already changed its financial information to become an IFRS and the CEO claims that its corporate governance can be smoothly adapted to comply with public market requirements.