Pemex's intentions

Despite the time that has passed since the alliance between the Mexican group Petróleos Mexicanos (Pemex) and the construction firm Sacyr was made public, the doubts over the consequences of this deal in terms of the effect it will have on the future management of Repsol has still not been cleared up. It is perfectly understandable that the president of Sacyr, Luis del Rivero, is looking for greater influence within the Spanish oil firm in order to increase liquidity and deal with the loan of around five billion euros that he used to pay for his share. That financial weakness serves to explain why Sacyr was the wrong shareholder for Repsol, a group whose shareholders must accept the long maturity periods of investments in the exploration and refining of crude oil. Ultimately, this is the origin of the current instability in Repsol.

But the role of Pemex in this crisis is not so well defined. The report in which the advantages of its alliance with Sacyr are laid out offers some clues. It alludes, for example, to the ease of access that the Mexican group has to exploration technology, an undeniable advantage. The apparent benefits of controlling a world-class oil group with a minority shareholding is not so easy - now the Pemex-Sacyr alliance is public knowledge, a fierce corporate battle has arisen to guarantee that the control remains in the hands of those who are currently in charge.

The doubts arise from a suspicion: Pemex wants to control Repsol, along with Sacyr, to change its management and take some of its key decision making out of Spain, taking advantage of the weakness of the construction company and the deficiencies of a government which is on its way out. That would be the hidden reason. As a basic principle, it is desirable for strategic energy companies to have Spanish management, with their assets protected from the pressing needs of their shareholders, because the energy market is not globalized and maintains barriers to entry in all the strong countries. To avoid any doubts about the Spanish management of Repsol, and to impede a corporate artifice from diluting national management, it's essential that Pemex and the Mexican government explain their intentions. And, finally, but not least importantly, stable shareholder majorities must be organized. These majorities require more Spanish investment.