MEXICO CITY, Aug 17 (Reuters) - Mexican President Andres
Manuel Lopez Obrador said on Monday an ethane supply contract
signed under the administration of one of his predecessors with
a consortium backed by Brazilian company Odebrecht was unfair
and should be canceled.
The contract, between state oil company Petroleos Mexicanos
(Pemex) and the consortium made up of Odebrecht-controlled
Braskem and Mexico's Grupo Idesa, was agreed during the tenure
of President Felipe Calderon, who governed from 2006-2012.
"That contract has to be canceled in my opinion because it's
unfair," Lopez Obrador said at a news conference. "It has to be
In a lengthy response to questions from Reuters, Braskem
Idesa rejected any wrongdoing and said its own investigations
showed it had not participated in any illegal activity or
corruption in Mexico.
"We trust that any dialog with the authorities will take
place within the framework of the rule of law and legality, an
essential condition for investor confidence," it said.
A hydrocarbon that comes from natural gas or is a byproduct
of petroleum refining, ethane is used to manufacture ethylene,
which is used to make the common plastic polyethylene at the
Braskem Idesa plant known as Etileno XXI near the
Gulf coast port of Coatzacoalcos.
Under the terms of the contract, which the company said was
won fairly and approved by Mexican authorities, Pemex
has had to supply ethane at below current market prices.
Braskem Idesa said the price formula had "no preference or
advantage" and was typical of long-term raw material contracts
and consistent with prices Pemex charged in the 16 years before.
Braskem Idesa said it had invested $5.2 billion in the plant.
Lopez Obrador, who has sought to discredit the governments
of Calderon and his successor Enrique Pena Nieto, said in
February that authorities were analyzing canceling the contract.
Pemex did not respond to a request for comment.
(Reporting by Dave Graham, Stefanie Eschenbacher and Raul
Cortes Fernandez; Editing by Nick Zieminski and Steve Orlofsky)