MOSCOW (MRC) -- 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, reported Reuters.
The world's largest independent commodity traders here 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.
As MRC informed before, Pemex will invest USD2.64 billion to complete a coking plant at its Tula refinery as the country seeks to reduce its dependence on imported fuels, said earlier the state company's CEO. The project, which Pemex expects to finish by 2023, will allow Pemex to process 90% of the fuel oil produced at Tula and at neighboring Salamanca, Octavio Romero Oropeza said during the daily press conference held by Mexican President Manuel Andres Lopez Obrador.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.
Pemex, Mexican Petroleum, is a Mexican state-owned petroleum company. Pemex has a total asset worth of USD415.75 billion, and is the world's second largest non-publicly listed company by total market value, and Latin America's second largest enterprise by annual revenue as of 2009. Company produces such polymers, as polyethylene (PE), polypropylene (PP), polystyrene (PS).
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