Bloomberg News

Spain Denies Repsol’s Request to Probe Increased Pemex Stake

September 30, 2011

(Updates with refinancing plans in fifth paragraph.)

Sept. 30 (Bloomberg) -- Spain’s energy regulator won’t investigate Petroleos Mexicanos’ increased stake in oil producer Repsol YPF SA, denying a request from the Spanish company’s management for a review that could have lasted months.

Repsol’s share in a regulated Spanish utility isn’t big enough to trigger a rule that calls for a probe of non-European Union companies that gain significant stakes in EU companies, the Comision Nacional de Energia said in a statement yesterday. Repsol controls Gas Natural SDG SA, Spain’s biggest natural gas supplier, with La Caixa bank.

Repsol, based in Madrid, sought the agency’s review to prevent Mexican state-owned Pemex from increasing its influence over the company. Pemex, which owns almost 10 percent of Repsol, agreed to an alliance on Aug. 29 with Sacyr Vallehermoso SA to coordinate a combined stake of almost 30 percent to install a new chief executive officer and shift the company’s strategy.

“This eliminates one obstacle to the agreement and is positive given Sacyr has to work on its refinancing,” said Francisco Salvador, a strategist at FGA/MG Valores in Madrid.

Sacyr has a December deadline to renew a 4.9 billion-euro ($6.7 billion) credit line used to finance its investment in Repsol. The company has begun the process of refinancing the loan, it said in a regulatory filing today.

Shares Fall

Sacyr shares fell 2.5 percent to 4.183 euros in Madrid at 1:11 p.m. local time, while Repsol shares traded down 0.5 percent at 19.82 euros.

The request to the CNE was one of several defensive moves by Repsol since the Pemex-Sacyr alliance. Repsol’s board on Sept. 28 approved new rules that would force Sacyr Chairman Luis del Rivero out of his position as Repsol’s vice chairman. Del Rivero and Pemex’s representative on the board may need to win a vote by other shareholders to retain their positions.

“A deal like this should be subject to analysis and it is our responsibility to address the concerns of all those groups with a stake in our company,” Kristian Rix, a Repsol spokesman, said in an e-mail yesterday.

Sacyr is satisfied with the CNE decision because Repsol’s request was damaging to the interests of shareholders, said a Sacyr spokesman who declined to be named, citing company policy.

Repsol, which gets most of its revenue from oil, votes a combined 68 percent of Gas Natural shares through an agreement with La Caixa.

The benefits for Pemex of a closer cooperation with Repsol will be worth $4.27 billion, the Mexico City-based company said in a Sept. 21 filing with Spanish regulators. Increasing its stake will help Pemex take on “highly complex” projects and deep-water drilling, the company said.

“In the short term, Pemex doesn’t have control,” Salvador said. “If they can attract support from more investors, they may gain it.”

--Editors: Alex Devine, Tony Barrett

To contact the reporters on this story: Ben Sills in Madrid at

To contact the editor responsible for this story: Reed Landberg at

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