May 8, 2012 / 7:23 PM / 7 years ago

Mexico lawmakers flag $30 billion Pemex loss in audit

MEXICO CITY (Reuters) - Mexican lawmakers are calling for an official probe into how state oil monopoly Pemex accounted for a suspected $30 billion loss in 2009 which an audit showed the company later booked as assets.

Esthela Damian, an opposition congresswoman who heads the accounting oversight committee, said she is asking federal authorities to investigate irregularities in Pemex’s accounts.

Pemex did not immediately comment on the suspected loss, which would be around double the company’s accumulated annual losses over the past three years.

Analysts said the accusations could balloon into a scandal ahead of a July 1 presidential election where reform of the state oil giant is at the top of the political agenda.

Damian, of the leftist Party of the Democratic Revolution, or PRD, said the state monopoly appeared to have scrubbed a 2009 loss of 398.6 billion pesos ($30.27 billion) from its books, and that this was later recorded as an increase in Pemex assets. Pemex’s board of directors did not authorize the move and the company gave no technical basis for its accounting, Damian said.

“In my opinion this is one of the biggest frauds we have ever had in our country unless Pemex can explain in detail what this loss is about,” Damian told Reuters in an interview.

“This accounting move is truly scandalous. It cannot be counted as an asset when we have discovered through an audit that it is in fact a loss,” she added.

A congressional audit of 2010 federal government finances, published in February of this year, found Pemex’s exploration and production arm “did not comply with the proper regulatory requirements” in explaining the 2009 loss.

The audit said Pemex had registered the loss as an increase in “investments in subsidiaries.”

The company is not publicly traded and regularly operates at a loss because most of its revenue is gobbled up in taxes.

But the 400 billion-peso figure would be close to double the company’s combined annual losses from 2009, 2010 and 2011 of 232.4 billion pesos, according to Pemex filings with the Mexican stock exchange.

PRD lawmakers are requesting a hearing with Pemex Chief Executive Juan Jose Suarez Coppel and a formal investigation by the federal comptroller’s office.

The comptroller’s office did not immediately comment on the report.

Mexico funds around a third of its federal budget with oil revenue, and the management of Pemex is a major issue in the presidential race.

The two leading candidates propose to overhaul the state-run giant to make it more profitable and efficient, while the PRD is opposed to significant outside investment in the company.

U.S.-based energy analyst George Baker said the timing of the announcement by the leftist party could be political.

“Whether it’s true or not, it has a resonance because of the electoral cycle,” said Baker.

A plan to open up Pemex further to the private sector would help boost the Mexican economy, adding as much as 0.8 percentage point to annual economic growth over a five-year period, said consultancy Capital Economics in a report.

($1 = 13.1680 Mexican pesos)

Additional reporting by Miguel Angel Gutierrez, Ana Isabel Martinez and David Alire Garcia; Editing by David Gregorio and Matthew Lewis

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