Mexicos national oil company and its largest lubricant maker confirmed recently that they are engaged in negotiations that could unlock the latters hold on motor oil sales through the countrys gasoline stations.
The talks began after Impulsora Jalisciense, the majority shareholder in Mexicana de Lubricantes S.A., obtained a court order to keep oil company Petroleos Mexicanos from canceling agreements that give Mexlub exclusive access to sell automotive lubes through Pemex stations.
Pemex officials say the company would like to open that business to other suppliers. Mexlub Managing Director Octavio Sanchez Mejorada acknowledged that that could happen as early as next year.
Among the topics being negotiated is a possible opening of the sale of lubricants in Pemex gas stations in the future, sometime in 2003, he told Lube Report.
Mexlub has had its corner on gasoline stations since the company was formed in 1993, when Impulsora Jalisciense won the bidding to acquire a 51 percent share of Pemexs lubricant operations. Its agreement is considered a plum because Pemex has a monopoly on stations, owning more than 5,200 throughout the country.
Those stations sell approximately 9.4 million gallons of motor oil a year, helping Mexlub to rank atop the nations list of lubricant suppliers. Mexlub claims a 27 percent market share, with the gasoline stations accounting for one third of its sales.
Pemex retains a 49 percent stake in Mexlub, but the relationship between the shareholders has not always been cozy. According to news reports, Pemex has been disappointed that the venture continues to carry a large amount of debt dating from its formation.
A Pemex official stated that the company terminated its contracts with Mexlub in early February in an effort to open access to its stations shelves. Pemex says it is also trying to spur a restructuring of Mexlub.
The decision was set in motion on behalf of customers, in part to allow service stations to sell lubricating oils of any brand, providing they met minimum standards of quality, spokeswoman Lorenza Sotomayor said. She denied a press report that Pemex has already invited expressions of interest from other potential suppliers.
The reality is that Mexicana de Lubricantes needs to reestablish its operations in order to take a more competitive stance and to satisfy the stringent demands of its clients, shareholders and creditors, Sotomayor said.
Although news reports have in the past suggested that Pemex might sell its stake, Sotomayor insisted the oil company is committed to remaining a partner in Mexlub. Pemex may, she suggested, try to bring new partners into the venture.
Sanchez Mejorada expressed confidence that the negotiations will lead to steps that benefit Mexlub, even if it loses its lock on gasoline stations.
Although it is still early to determine the final outcome, we believe that the relationship between [the companies] will be reestablished in a manner that will support our companys future growth and strengthen its financial position, he said.