Page 4 - LatAmOil Week 08 2022

COMMENTARY Y
LatAmOil COMMENTAR LatAmOil

Monterra’s Tuxpan fuel terminal (File Photo)
Monterra demands return

of Tuxpan fuel terminal

The US-based company says it is prepared to seek arbitration if Mexico City does not
surrender control of the facility, which has remained closed since last September

MONTERRA Energy, a privately owned Trade Agreement (NAFTA), signed in 1994, and
US-based company, has warned the Mexican the US-Mexico-Canada Agreement (USMCA),
WHAT: government that it intends to take legal action to signed in 2020.
Monterra has notified the recover the value of its 2.2mn barrel petroleum (The latter document was designed to replace
Economy Ministry of its product storage terminal near Tuxpan, a port in the former, but it does state that legacy protec-
intent to seek arbitration Veracruz State on the Gulf of Mexico. The ter- tions for the rights of companies that made
if the Tuxpan terminal is minal has remained idle since mid-September investments when NAFTA was still in force will
not returned. of last year, when Mexico’s Energy Regulatory remain in place.)
Commission (CRE) ordered its closure on the As of press time, Monterra had yet to follow
WHY: grounds that Monterra had failed to produce through on its threat to file suit against the Mex-
The facility was allegedly required documentation during the course of ican authorities. It cannot do so until it gives
targeted for seizure
within the framework of an audit. Mexico City 90 days to respond to its notice,
efforts to promote state- The firm, which is owned by the US-based either by assenting to its demands or by bring-
owned Pemex’s interests. investment company Kohlberg Kravis Roberts ing the matter to an international tribunal for
& Co. (KKR), announced its plans in a notice arbitration.
WHAT NEXT: delivered to Mexico’s Economy Ministry on Feb- The Mexican government is unlikely to
If Monterra’s approach ruary 21. In that document, it informed Mex- choose the former option, for reasons that will
succeeds, more threats of ican authorities of its “intent to submit claims be discussed further below. As such, the parties
legal action may follow. to arbitration” under the North American Free are probably headed for arbitration.

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