PEMEX and Baker Hughes Triple Millionaire Contracts

In the midst of corruption allegations against President López Obrador’s son and Baker Hughes, the value of contracts between PEMEX and the Texas oil company have tripled, going from US$142 million in 2018 to $US434 million in 2021, according to an investigation led by independent journalist Peniley Ramirez.

Last week, PEMEX CEO Octavio Romero Oropeza denied and dismissed these corruption allegations made against the NOC by various media outlets. Nevertheless, during the daily briefing, Romero Oropeza, presented data that demonstrates that Baker Hughes had been assigned numerous contracts during the present administration, tripling its earnings from 2018 to 2021.

In addition, PEMEX is justifying the contract extensions by explaining that all oilfield service companies have benefited from the exploration and production activity increase of the state-owned agency and assured that their financial information is to be examined by the Supreme Federal Auditor (ASF) that is determinate by private auditor KPMG.

These accusations concern the relationship between PEMEX and Baker Hughes after it was revealed that a BH top executive had rented out a luxurious mansion in Houston to one of President Lopez Obrador’s sons in exchange for an expansion of the company’s ongoing contract with the NOC.

By 2019 BH contract values went from US$142 million to US$200 million.

Amid the recent BH payments increase, José Ramón López Beltrán, AMLO’s son, is at the center of a scandal that has drawn much public attention, revealed by Mexicans against Corruption and Impunity (MCCI) and media outlet LatinUs.   

According to MCCI journalists, details of the López Beltran´s rental contract are murky because they cannot get access to the documents. Nonetheless, the house was reportedly rented for US$6,187 a month, more than the Mexican president’s net monthly salary. The report says the property is approximately worth US$1 million and was rented to the president’s son from August 2019 to January 2020. During this period, the Texas based company notably enlarged its contracts with the NOC, reports MCCI.

PAN Senator Xóchitl Gálvez has publicly requested that the ASF go over every contract between PEMEX and Baker Hughes for the 2018 to 2021 period to verify the accuracy of corruption charges against the NOC. Gálvez also made clear that she will file formal complaints with US authorities, given that she expects Mexican authorities to “block all investigations into the matter.”  

In addition, a group of Baker Hughes shareholders have asked through a letter to the Administrative Council that the oilfield services firm investigates a possible conflict of interest in the granted contracts by PEMEX. 

“The optics and the timing of these facts are simply not good. These, at least create the perception of a possible conflict of interest and a potential scenario which could have crossed the line of the legal, and ethical obligations of Baker Hughes. For such reason, a complaint is warranted, and an investigation is necessary”, read the letter.

Additionally, the letter urged US corresponding governmental authorities to investigate the case, as they have already been notified by different organizations, members of Mexico´s Congress, media outlets, and concerned individuals.

Gilbert K. Squires, a U.S. international lawyer and former oil and gas executive, told the Miami Herald that under the U.S. Foreign Corrupt Practices Act, “It is probable that this could lead to a Department of Justice or Securities and Exchange Commission investigation, or both.”