Troubled past haunts Mexico oil company at center of Citi scandal
By Mica Rosenberg, Elinor Comlay and Michael Pell
NEW YORK/MEXICO CITY (Reuters) - The company at the center of an alleged fraud that forced Citigroup Inc to cut its 2013 profit won billions of dollars in contracts from Mexico's state oil monopoly over the past decade, even after Mexican officials and private lawsuits raised red flags about the contractor's activities.
From 2003 to last year, Oceanografia SA, a provider of engineering and maintenance services on offshore oil platforms and pipelines, signed more than 100 contracts worth nearly $3 billion with state-owned Pemex, according to a Reuters review of Mexican government contracts.
As those deals were being made, Mexico's Federal Audit Office, known as the ASF, was raising questions about Pemex's contracting relationship with Oceanografia. It audited the state-run oil firm in 2006 over alleged irregularities in several multi-million-dollar contracts with Oceanografia.
The ASF said in a report it found cases in which Oceanografia appeared to have received favorable treatment from Pemex. It urged Pemex's internal control office to examine whether Pemex officials improperly changed contracting terms at Oceanografia's request and favored the firm over competitors.
The ASF's power is limited: It can only investigate government entities and does not have the authority to sanction them.
A spokesman for Pemex did not reply to Reuters' requests for comment on how it responded to the ASF report. Oceanografia said in a statement last month that it had always acted within the law in its dealings with Pemex.
After the ASF's report appeared in 2006, Oceanografia went on to win $2 billion in contracts. The firm says it receives about 97 percent of its revenue from government contracts, almost all of it from Pemex.
Oceanografia found itself in the spotlight again in 2008 when opposition lawmakers began calling for a federal investigation into its Pemex contracts. Continued...