Pemex pays US$295 million to settle a dispute with Siemens

Mexican state oil company Pemex reached a US$295 million settlement with a group including German industrial conglomerate Siemens in a longstanding dispute over a refinery project, a person familiar with the matter said on Monday.

The deal was originally announced in March but did not give details of the final settlement.

A Mexican official close to the negotiations said that Pemex had agreed to settle for US$295 million. Earlier in the day, Pemex said in a statement that the deal struck definitively ends the 14-year-long dispute, but it did not give a sum.

The official said Siemens originally sued for US$690 million.

A Pemex spokesman declined to name the amount.

A Siemens spokesman declined to confirm the value of the settlement, which he described as a private matter.

The dispute involved Conproca, a Mexican joint venture between Siemens and South Korea's SK Engineering & Construction Co Ltd, which was created to bid for the reconfiguration of its Cadereyta refinery in the northern state of Nuevo León.

Pemex was at loggerheads with Siemens and SK Engineering & Construction Co Ltd - a unit of SK Holdings Co - over allegations of graft and cost overruns relating to the Cadereyta project.

The settlement will fund anti-corruption, environmental and social development projects in Mexico, the companies said.