Pemex, Mexican state-owned company has banned new business with major oil trader Trafigura, according to a document seen by the news agency Reuters. Primary reasons for the ban are alleged corruption and bribery cases within Trafigura’s team.
Firstly, other major trading companies, like Vitol and Trafigura are facing scrutiny all around the world for alleged corruption in several countries in Latin America. In fact, as we reported previously, last year Vitol accepted to pay $164 million to American and Brazilian authorities; after admitting to have bribed energy officials in Mexico, Brazil and Ecuador.
Secondly, after the scandal, Pemex too suspended any further business with Vitol; such measure has been expanded to Trafigura, according to the document seen by Reuters. Although the literal reason for the ban remained unknown.
Thirdly, the company that suspended further business with Trafigura was Pemex’s trading arm, PMI Comercio Internacional. Sources at PMI talked with the condition of anonymity, due to the sensible nature of the matter.
Also recommended for you: GE Renewable Energy to expand turbine blade factory. Click here to read.
Pemex and subsidiaries worried about exposure to companies under investigation
Moreover, according to those sources, the relationship with Trafigura has become increasingly difficult for Pemex, due to the corruption allegations and the mounting scrutiny; but also due to additional layers of compliance progressively imposed by the company and its units.
In addition, Pemex and its subsidiaries worry about exposure to companies under investigation for corruption elsewhere, two of the sources said. However, other Mexican state-owned companies remain doing business with Trafigura; and, also, existing shipments from Trafigura to Pemex, secured before the ban, were not cancelled.
Consequently, a Trafigura spokeswoman said. “We see no basis for new business suspended with Trafigura; and we look forward to clarifying the situation with PMI at the earliest opportunity. Spokesperson added that its compliance standards have been reviewed by independent external counsel.
Finally, Mexican president Andres Manuel Lopez Obrador reiterated in June that Mexico wants traders, including Vitol, to make public the names of the energy officials bribed. After the ban to Vitol in December, PMI is trying to renegotiate some of its contracts; after the trader acknowledged paying kickbacks to win business. The ban remains in place.