Mexico’s state-run power utility on Sept. 21 filed a breach of contract lawsuit in a Texas state court against former executives of a U.S. arm, alleging they improperly awarded a lucrative gas supply deal.
The lawsuit, by a unit of Comision Federal de Electricidad (CFE), comes amid Mexican President Andres Manuel Lopez Obrador’s efforts to redraw energy deals that he believes disadvantage CFE and state oil firm Petroleos de Mexico. Mexico has disputes with U.S. companies involving some $30 billion.
Guillermo Turrent and Javier Gutierrez, two former top executives of CFE International, awarded contracts to Texas-based WhiteWater Midstream LLC for a pipeline and gas supply that saddled the company with hundreds of millions of dollars in damages, alleges a lawsuit filed in Harris County District Court in Houston.
The two misled CFE’s board by failing to disclose prior business dealings with WhiteWater executives, CFE claimed. The lawsuit seeks at least $1 million in damages.
An attorney for the two men did not reply to requests for comment.
CFE International is obligated to pay WhiteWater Midstream “enormous sums for unneeded and overpriced natural gas and unnecessary pipeline costs,” the lawsuit claimed.
CFE through one contract receives 1.5 Bcf/d of natural gas, some of which is not needed and resold “routinely causing enormous losses” to the Mexican company. A related, long-term pipeline contract was unneeded and designed to help WhiteWater obtain outside financing, the lawsuit alleged.
“While this lawsuit is not directed at WhiteWater, it is clearly part of an ongoing intimidation campaign from a Mexican state-owned enterprise in response to arbitration proceedings initiated by WhiteWater,” the Texas company said in a statement.
“CFE’s meritless claims regarding WhiteWater follow explicit threats made by CFE officials to renegotiate the terms of legitimate, market-based contracts,” it added.
Editor’s note: This story was updated at 7:49 a.m. CT on Sept. 22.
Recommended Reading
Blankenship, Regens: More Demand, More M&A, More Regs
2024-05-23 - In 2024, the oil and gas industry is dealing with higher interest rates, armed conflicts in Europe and the Middle East, rising material costs, a decrease in Tier 1 acreage and new policies and laws.
Goodbye Manual Control: Vital Energy’s Automation Program Boosts Production
2024-07-12 - Production, ESP efficiency soared when the company automated decisions with AI at the edge.
E&P Highlights: May 28, 2024
2024-05-28 - Here’s a roundup of the latest E&P headlines, including production start up at a field using an innovative emissions reduction technology.
Weatherford to Deliver Drilling Services to Bapco Upstream in Bahrain
2024-06-06 - The contract with Bapco Energy subsidiary Bapco Upstream replaces Weatherford’s old drilling services contract from 2015.
Vista to Import New Fracking Set to Boost Production at Argentina's Vaca Muerta
2024-06-11 - Vista Energy will import a new fracking set in the Vaca Muerta and sealed an agreement with SLB for the new equipment.