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Anyone understand this?

20 November 2013

I admit I’m stumped:

Nov 19 (Reuters) – Mexican state-owned oil major Pemex is seeking to join forces with billionaire Carlos Slim to buy a 10 percent stake in Spanish oil group Repsol, to add to the 9.3 percent it already holds, ABC newspaper reported on Tuesday citing unnamed sources.

repsol_logo_primary_lrgPemex, which has threatened to sell out of the Spanish company in the past because of differences with Chairman Antonio Brufau, will present the plan in its next board meeting, the paper said.

Such a transaction would make Pemex the biggest stakeholder in Repsol.

As part of the deal, Slim would buy Repsol shares in the market. At Monday’s closing price, a 10 percent stake in Repsol would have a market value of more than 2.4 billion euros ($3.3 billion)….

Does this mean Slim is buying Repsol shares and re-selling them to PEMEX, or that Slim as a private citizen is becoming a part owner of PEMEX assets, or a company Slim controls or what?

In theory, there is nothing wrong with PEMEX — as a state agency — buying into a foreign non-state oil company, just with foreign oil companies (or individuals) buying into PEMEX.  That PEMEX would become Repsol’s largest shareholder (and seeks to change its management) is interesting, but not sure what it means.  Repsol was favored in contracts by the previous (Calderón) administration, and I’m wondering if this isn’t a way of bringing in foreign investors (at least in the petrochemical services sector) through the back door.  Or at least one private investor?

One Comment leave one →
  1. NORM permalink
    20 November 2013 5:16 am

    Repsol has some deep water drilling experience. Mexico has a good bit of deep water reserves that it has failed to develop , maybe it is the expertise of the Spanish firm that they are after in this deal. At the above price of $3.3 billion, it sounds like a smart move. As to the politics-it’s Mexico…

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