Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Exclusive-Pemex's trading arm bans new business with Trafigura -sources

CommoditiesJul 15, 2021 02:16PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: A tanker truck transporting fuel is pictured along the streets en route to a gas station, in Mexico City, Mexico January 15, 2019. REUTERS/Henry Romero/File Photo 2/2

By Stefanie Eschenbacher and Julia Payne

MEXICO CITY/LONDON (Reuters) - The commercial arm of Mexican state oil company Petroleos Mexicanos (Pemex) has temporarily banned new business with Trafigura AG, according to a document and a source, as investigations into the energy trader's conduct in several countries deepen.

The world's largest independent commodity traders https://www.reuters.com/article/us-oil-corruption-traders-factbox-idUKKBN28E2RJ are facing scrutiny globally for alleged corruption after years of investigations into bribes of public officials in several countries in Latin America.

Pemex and other state oil companies have become wary of doing business with merchants, which include Trafigura and rival Vitol.

Earlier this month, PMI Comercio International suspended new deals with Trafigura and its subsidiaries until further notice, according to company communication seen by Reuters. The document did not state a reason for the ban.

Mexico is the world's fourth-largest importer of refined oil products and a prominent buyer of natural gas and liquefied natural gas (LNG). Many foreign trading houses and oil companies buy Mexican crude from Pemex and also supply refined products or LNG for Mexican state companies.

Employees at PMI, which is in charge of Pemex's fuel imports, were told to honor existing agreements with Trafigura but not take on new deals as of early July, a source familiar with the operations said.

Mexico's longstanding business relationships with Trafigura and other energy traders have become increasingly difficult to sustain because of additional layers of compliance progressively imposed by the company and its units, several sources said.

The primary reason for the increased scrutiny is that Pemex and its subsidiaries are worried about exposure to companies under investigation for corruption elsewhere, two of the sources said.

All sources spoke on the condition of anonymity because of the sensitivity of the matter.

Other Pemex units continue trading with the Geneva-based trader, another source said. Reuters was unable to determine the frequency and size of the trading relationship, but the Americas accounted for 31% of Trafigura's oil revenues in 2020.

"We see no basis for new business to be suspended with Trafigura and look forward to clarifying the situation with PMI at the earliest opportunity," a Trafigura spokeswoman said, adding that its compliance standards have been reviewed by independent external counsel.

Pemex did not immediately respond to a request for comment.

At least two cargoes of gasoline and naphtha supplied by Trafigura were scheduled to arrive at Mexican ports this month, according to two sources with knowledge of the supply, confirming that shipments purchased before the suspension decision were not canceled.

In addition, a contract between Trafigura and Mexico's power company Comision Federal de Electricidad to supply LNG to the nation remains in effect, according to two separate sources.

Trafigura's two biggest trading divisions are oil and metals. The company traded about 6.4 million barrels per day of crude and refined products in the first half of this year, making it the biggest oil trader after Vitol.

Brazilian prosecutors in 2018 announced a probe into alleged bribery involving merchants Trafigura, Vitol and Glencore (OTC:GLNCY) and officials at state-controlled company Petrobras.

Vitol, the largest commodity merchant, agreed last year to pay $164 million to U.S. and Brazilian authorities after admitting it bribed officials in Mexico, Brazil and Ecuador to obtain and retain business with state oil companies there.

Ecuador's state company Petroecuador has since 2020 removed Vitol and Gunvor from its suppliers list amid the probes.

President Andres Manuel Lopez Obrador in June reiterated that Mexico wants Vitol to make public the name of the state oil company official who accepted bribes from Vitol.

PMI temporarily banned trading with Vitol in December. Mexico is trying to renegotiate some of its contracts with Vitol after the trader acknowledged paying kickbacks to win business. The ban remains in place, the source said.

Exclusive-Pemex's trading arm bans new business with Trafigura -sources
 

Related Articles

UK vows to manage fallout from soaring gas prices
UK vows to manage fallout from soaring gas prices By Reuters - Sep 18, 2021 16

By Kate Holton LONDON (Reuters) -Britain said on Saturday it would work with the energy industry to try to stem the fallout from soaring gas prices after fears grew that more...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Atleast Max
Atleast Jul 15, 2021 5:10PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
problem is America latina is corrupt
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email