Cofece grants concession to ALFA, Newpek and Temex
The Federal Economic Competition Commission (Cofece) of Mexico gave a favorable decision to the concession granted to ALFA, Newpek and Temex for the transportation of natural gas.
Newpek is a company that carries out activities in the energy industry, mainly in the oil and natural gas value chain.
Newpek’s operations include hydrocarbon exploration and development, primarily in the United States and Mexico.
While ALFA has reduced its investments in its subsidiary Newpek, Temex (in turn, a subsidiary of Newpek) is dedicated to the production of PTA that is used for the manufacture of plastic bottles, films and textile and industrial polyester fibers.
On November 20, 2020, ALFA, Newpek Exploración y Extracción (Newpek) and Tereftalatos Mexicanos Gas (Temex) requested the opinion of Cofece, in terms of article 83 of the Hydrocarbons Law, regarding the natural gas commercialization permit and oil owned by Newpek, Temex’s natural gas transportation permit through open access pipelines, and the common shareholding that exists between these economic agents.
ALFA
Cofece resolved to issue a favorable opinion to the three companies in accordance with the antecedents, legal considerations and analysis of the related economic competition aspects.
In the event that Newpek Exploración y Extracción, or another marketer in which the people who are part of ALFA participate directly or indirectly decide to use capacity in open access infrastructure owned by companies of this group, or by their direct or indirect shareholders, it must obtain in advance the favorable opinion of the Cofece.
In addition, for any modification in the cross shareholding analyzed and authorized in this resolution, the favorable opinion of Cofece must be obtained in advance.
This opinion will not be required when the modification refers to a corporate restructuring in which the economic agents belong to the same economic interest group and no third party participates.
Background
In 2006, Newpek began operations as part of a partial physical coverage strategy to meet the natural gas needs and requirements of ALFA’s companies.
Highly volatile natural gas prices made ALFA’s energy costs very volatile as well.
In general, the oil and natural gas industry is highly competitive.
A large number of companies, including large integrated oil companies and other independent companies and individuals, are engaged in the exploration and development of crude oil and natural gas producing properties, and there is a very high degree of competition for properties capable of producing crude oil. and natural gas.
