The unknown winners of Mexico’s energy reform

07/07/2021

Source: El País

It was a perfect opportunity. When Mexico opened its market to allow private companies to produce and sell energy for the first time in decades, two US executives suddenly found themselves in a privileged position. Mexico would be buying significant amounts of natural gas from its northern neighbor and the person in charge of negotiating the contracts was someone they knew well: an ex-colleague from more than 15 years earlier, with whom they’d worked with in another recently liberalized market.

The contracts were awarded under Guillermo Turrent, ex director of CFEI, who had worked with a high-ranking executive and the founder of Whitewater at Royal Dutch Shell in San Diego, California during 2000 and 2001. Details of their employment and behavior while at Shell is documented by the Federal Energy Regulatory Commission (FERC), where a case remains open that examines the company’s purported overcharging of the state of California for electricity in the negotiation of a long-term contract. During that time, just a year after opening its market to private competition, California suffered an electricity crisis that included widespread blackouts that affected millions of residents and caused record price increases for power that almost bankrupted the state government.

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