Pemex Halting Rental Contract That Paid 63% More for Trucks

  • CEO of state-owned company tells lawmakers process to restart
  • Price discrepancy reported by Bloomberg News this week

Petroleos Mexicanos is halting a truck-leasing contract that charged the state-owned oil producer 63 percent more than a prior agreement, saying the bidding process should be restarted.

The pricing discrepancy was brought to light in a Bloomberg News story this week. The contract, 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 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 -- except for ABS brakes.

“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 when asked about the contract in a congressional hearing on Tuesday by Armando Alejandro Rivera Castillejos, a member of the opposition National Action Party. Pemex 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.

Pemex will determine the status of the contract signed in 2015 after a legal review, according to an e-mailed comment from the company’s press department. Integra didn’t respond to requests for comment.

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.”

More Capital?

The oil giant 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.

Antonio Holguin, a lawyer for Integra, said in an interview last week that 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. The two fleet-leasing contracts are worth a combined 4.8 billion pesos ($271 million). Pemex has pledged to trim costs after losing about $32 billion last year.

Holguin also cited the “matter of foreign exchange,” referring to the decline in the peso against the U.S. dollar in recent years and saying that had made some imported parts more expensive. The peso was at 13.06 per dollar when the Jet Van deal was signed, and at 17.22 when Integra’s was awarded, a 24 percent difference. The trucks have a mix of foreign- and domestic-made parts; the annual inflation rate for vehicles has been running at about 2 percent, according to Mexico’s auto-dealer trade group.

Mexican 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.”

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