- Selection of vendors didn't have independent witness
- Bloomberg reported on pricing discrepancy earlier this week
Petroleos Mexicanos fully revoked a truck-leasing contract that was 63 percent more expensive than a prior agreement, saying selection of the providers didn’t adhere to the standards of Mexico’s state-owned oil company.
The bidding process lacked an independent witness, according to a document from the oil producer, known as Pemex. All agreements derived from the contract are now void, it said.
The pricing discrepancy was brought to light in a Bloomberg News story this week. The deal, assigned on Dec. 23 to companies including Integra Arrenda SA, included the leasing of 2,252 6-cylinder 2015-model pickups for an average of 534 pesos ($30) a day per vehicle. That compared with a 2014 Jet Van Rental Car SA contract of 328 pesos a day for 54 similar vehicles. The two contracts contain virtually the same specifications.
“These were not the best conditions for the company, and we will restart the process within the applicable laws,” Pemex Chief Executive Officer Jose Antonio Gonzalez Anaya said Tuesday when asked about the contract in a congressional hearing on Tuesday by Armando Alejandro Rivera Castillejos, a member of the opposition National Action Party.
A lawyer for Integra, Antonio Holguin, said on Tuesday the company’s contract is more costly for several reasons, including expectations the trucks will be put to more rigorous use, though the two documents don’t spell out any differences.
Pemex is struggling in the face of collapsed oil prices and the end of its 76-year monopoly. Deputy Finance Minister Miguel Messmacher said in January that Mexico might inject capital into Pemex if it shows it can lower operating costs, among other things. The company, which hasn’t recorded a profit since 2012, has $79 billion in pension liabilities, the largest of any oil and gas company in the world, and debt levels that are set to exceed $100 billion this year.
The oil giant is “working on finding the best pricing and quality conditions for the company, to make our exploration, production and refining processes as profitable as possible,” Gonzalez Anaya said.
Weeding out similar contracts should be a priority for Gonzalez Anaya, though the task will be difficult because of the oil company’s long history of inefficiency, said Duncan Wood, director of the Mexico Institute at the Woodrow Wilson International Center for Scholars in Washington, in an e-mail.
“There is a set of vested interests at play that will be difficult to challenge,” Wood said. “What it will take is real political will, not only from Gonzalez Anaya, but from the energy and finance ministries.”
President Enrique Pena Nieto -- whose administration ended the Pemex oil monopoly in 2014 -- has put pressure on the company to cut costs. In February, when he announced Gonzalez Anaya, an economist, would be the new CEO, he said the company was under the gun “to review its expense program and to strengthen its investment processes.”