Pemex, Siemens resolve contract dispute
Mexico's state oil firm Pemex has reached an agreement with Germany's Siemens to solve a contract conflict regarding refinery upgrade works and to set up a fund for future compensation payments to be channeled into energy projects, the two companies said in separate statements.
The conflict involved two contracts signed by Pemex with consortium Conproca, a JV between Siemens and South Korea's SK Engineering and dates back to 2001 when the consortium filed a lawsuit in New York against Pemex for US$550mn for additional expenses incurred after it signed a contract in 1997 to refit the Cadereyta refinery (pictured).
In December, Pemex was ordered by the court to put aside US$593mn for a potential future payout to Conproca for the work. Pemex had said it would appeal the US court's decision.
In a separate dispute, Pemex had claimed that the two JV firms had bribed officials at the state company to secure refinery projects in Mexico.
Last July, the US court of appeals for the second circuit in New York ruled that Pemex's claims against Siemens and SK Engineering were "insufficient" to bring a lawsuit.
The activities involved in the alleged scheme – falsifying invoices, using bribes and approving false invoices – took place outside of the US, according to the panel of three judges.
Pemex filed its lawsuit in 2012, saying that the bribes used to secure contracts were paid through Conproca, which was set up by Siemens and SK Engineering to bid for oil refinery contracts, according to newspaper El Universal.
In 2008, Siemens agreed to pay US$1.6bn to settle the claims of bribery payments in various countries, and pleaded guilty to criminal charges in the US.
In 2014 Siemens proposed to Pemex the signing of an MOU with a view to resolving the dispute. The MOU was formalized last August and the two firms agreed on the terms of the conciliation agreement that has now been reached, and which resolves all pending conflicts and strengthens future collaboration, Pemex said.
The money that Siemens could receive from Conproca will be paid into a trust fund for financing energy projects in Mexico as well as anti-corruption, environmental protection measures and social development works, among others, Pemex said.
"Pemex and Siemens are leading companies in their respective fields and have had a positive business relationship for decades. The two firms have committed themselves to transparency, the rule of law and social development in Mexico," said Louise Goeser, Siemens' CEO for Mesoamerica.
The agreement opens a new chapter of cooperation between the two firms, Siemens said in a statement.
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