On February 6 2002 the Mexican oil giant Pemex terminated three contracts with Mexlub early. The terminated contracts involved a trademark licensing agreement, a basic oil supply agreement, and an oil and grease production agreement.

Mexlub is a joint-venture company in which Pemex-Refinación, the refining division of Pemex, holds 49% percent of the capital, the remaining 51% being held by Impulsora Jaliscience, a Mexican company. In 1993 Mexlub executed a trademark licensing agreement with Pemex-Refinación granting it the exclusive right to sell oil and lubricants in Pemex's service stations nationwide.

In August 2001 the Federal Competition Commission ruled that Pemex Refinación was guilty of monopolistic practices because of the exclusivity rights granted to Mexlub. Afterwards, Mexlub filed an amparo proceeding (ie, a combination of injunction, writ of mandamus, writ of certiorari and writ of habeas corpus)that was aimed at overturning the commission's ruling. Shortly afterwards this was granted to Mexlub.

The termination of the contracts is a positive sign of Pemex's intentions to open up the lubricants market to Mexican and foreign companies, which could represent a market opportunity of over 5,000 service stations in Mexico.

For further information in this topic please contact Rogelio López-Velarde at Lopez Velarde, Heftye, Abogados by telephone (+52 55 50 81 1424) or by fax (+52 55 50 81 1425) or by email ([email protected]).