Pemex cancels contracts with Vitol after corruption scandal in the US over bribery

Mexico.- Pemex has canceled three contracts with the company Vitol, after a corruption scandal involving the world’s largest independent energy trader in a case of bribery in the United States.

Documents to which the agency Reuters had access and a source close to the issue assures that the reason why Pemex canceled its contracts with Vitol was that the scandal came to light last December.

The Dutch energy company agreed to an agreement with the United States Department of Justice that paid bribes to win contracts with Pemex and two state companies from Brazil and Ecuador.

Pemex sent letters to Vitol in the last two months, informing the cancellation of a butane gas contract, another for naphtha and another for propane gas, the latter consisting of four different operations.

After years of investigations into alleged bribery of officials in various Latin American countries, Vitol finds itself in the midst of global scrutiny in the largest corruption scandal in its history.

Last March it was announced that Pemex was seeking to renegotiate some contracts with Vitol for hundreds of millions of dollars, in order to get rid of some unfavorable conditions for the Mexican oil company, according to its director, Octavio Romero.

The Geneva-based company confirmed that talks with Pemex had not reached a final result, without clarifying whether the contracts would be canceled or not.

Vitol told Reuters that after the corruption scandal, the company accepted its responsibility and recognized Pemex’s concerns.

“Vitol recognized Pemex’s concerns and for several months high-level officials from both Vitol and Pemex tried to negotiate a resolution acceptable to both parties,” the company said.

“Although the discussions did not lead to an agreement between the companies, Vitol remains open to continuing its dialogue with Pemex officials and working towards a mutually beneficial solution,” he added.

So far neither Pemex nor the office of President Andrés Manuel López Obrador (AMLO) have made statements about the canceled contracts with Vitol.

Sources close to the negotiations indicated that the canceled contracts were valued in millions of dollars and were valid until at least 2023. The decision would have been made by the oil company without prior notice after Vitol executives rejected the proposed changes in the terms of the the contracts.

Houston-based Vitol Americas agreed in December to pay US and Brazilian authorities $ 164 million after admitting that it bribed Mexican, Brazilian and Ecuadorian officials between 2015 and 2020 to win contracts with state oil companies.

Last July, Pemex’s commercial arm, PMI temporarily suspended new business in Trafigua, the second-largest oil marketer after Vitol, while international investigations into alleged acts of corruption by energy operators progressed.

Asked how Pemex could supply some of its refined products without deals with Vitol and Trafigura, energy expert Ramsés Pech said the Mexican oil company could turn to other companies such as Valero or ExxonMobil.

“But it would depend on the volume and timing of the contracts,” he said. “In addition, it would need companies that have the necessary infrastructure for production, logistics and warehousing in the United States and Mexico,” he added.

Last August, the head of the SAT, Raquel Buenrostro, said that the Government of Mexico was investigating Vitol for “irregularities” in the documentation of the oil products it brings into the country, which could result in criminal charges for tax evasion.

Read more: Fuels in Mexico: prices per liter today September 15, 2021

Vitol, for its part, denied having committed any crime and assured that the accusations correspond to years ago, related to another company with which it worked on classified imports.

With information from Reuters.

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