Monterra Energy to Seek $667M in Damages From Mexico for Port Closure

Monterra Energy said on Tuesday it plans to pursue legal action against Mexico and seek damages of about $667 million for the “unlawful” closure of its Tuxpan fuel imports terminal in the Mexican state of Veracruz for five months.

The Houston, Texas-based private oil company filed a “notice of intent to submit a claim of arbitration,” alleging the closure of its Gulf port was unlawful and discriminatory, and the Mexican government violated provisions of the North American Free Trade Agreement (NAFTA).

“Our preferred course of action is an amicable resolution, but the Mexican government’s actions so far have left us with little choice but to pursue all legal options available,” Arturo Vivar, the company’s chief executive said.

Monterra would not be the first U.S.-based company to seek international legal action against Mexico.

In May last year, Finley Resources Inc, a Texas oil services company, lodged a $100 million claim before a World Bank arbitration court, alleging Mexico violated investor protections under the NAFTA trade pact by failing to honor agreements.

Neither Mexico’s energy regulator, CRE, nor its Energy Ministry immediately responded to requests for comment. Mexico’s Economy Ministry declined to comment.

Monterra said its Tuxpan port was forcibly closed “with no legal justification” in September last year after an inspection by Mexico’s energy regulator.

The company added that armed personnel from the Mexican National Guard as well as officials from the country’s safety, energy and environment regulator were present during the inspection and closure.