CFE faces international arbitration with the giant Goldman Sachs for 400 million dollars

Manuel Bartlett, director of the Federal Electricity Commission. Photo: (El mañanero diario)

The Mexican power company trusts that it will be favored

MÈXICO CITY, (May 18, 2021).- The Goldman Sachs Group Inc. bank initiated an arbitration process against the Federal Electricity Commission (CFE), for a payment of 400 million dollars for the supply of natural gas that overflowed when an intense frost affected Texas last February and caused a mega blackout in Mexico.

According to the information released this Monday, May 17, by Bloomberg, this claim derived from a debt caused by the rise in natural gas prices at that time, whose demand had to be covered on this side of the border at a time when that Texas prohibited its export. 

Then, Goldman Sachs acted as an intermediary in the contracts for this product, and the CFE indicates that the people who executed the contracts for the purchase of natural gas at higher prices were not authorized to contract these types of agreements, so the contract was terminated.

The cost of paying Goldman Sachs could ultimately come from Mexican households, many of whom were left without power in the winter, not so much because of local failures but because Texas authorities cut off fuel exports when their own slightly regulated system failed.

It’s no wonder then that officials south of the border are reluctant to write a check payable to a giant US bank.

However, anyone who abandons such a bet runs the risk of becoming persona non grata on Wall Street, complicating their future access.

“The CFE considers that it has solid and sufficient arguments to be favored in the ruling,” said the national electricity company after confirming that they are in the middle of an international arbitration process with Goldman Sachs.

The Federal Electricity Commission added that information on the details of the arbitration will be reserved, until the ruling is issued, so as not to hinder any process.