Vitol Under Investigation Once Again, Banned Until 2024

Dutch oil and gas trading company Vitol has been banned from making new oil trades with PEMEX until 2024, following the announcement that it was under investigation by Mexican tax authorities.

The troubles for Vitol began at the end of 2020 when it was named as a defendant in an American investigation into foreign bribery schemes that violated FCPA laws. The US Justice Department filed charges against Vitol, accusing them of bribing PEMEX and Petrobras officials in exchange for access to confidential information. As a result, PMI, Pemex’s main trading subsidiary, temporarily suspended all of its contracts with Vitol in December 2020. This was significant at the time due to Vitol’s market status as “the world’s largest independent oil trader.” CFE also suspended all business with Vitol during that time. In February, PEMEX classified all of its contracts with Vitol for five years after journalists requested access to them. 

By June, Vitol had admitted to the charges and agreed to pay a US$163 million fine. Soon after, President López Obrador revealed that top Vitol executives visited Mexican state officials to offer apologies and restitutions; nevertheless, they refused to name PEMEX officials who were responsible for taking bribes.

Tensions escalated at the beginning of August, when Reuters reported that Mexican fiscal authorities decided to launch an investigation of their own into Vitol’s dealings in Mexico, suspecting them of falsifying import documents to evade taxes. SAT head Raquel Buenrostro said in an interview with Reuters that Vitol “presented many inconsistencies in documentation of imported products and could never provide proof." By then, Vitol was not the only company in trouble; one of its main competitors and the world's largest independent commodity traders, Swiss company Trafigura, had been banned from doing business with PMI as well in July. 

A total ban for both Vitol and Trafigura has now been extended to all businesses with PEMEX. This ban is expected to last at least until the end of the current government administration in 2024, according to an analysis from World Oil. Despite these legal issues, Vitol is not necessarily suffering in a financial sense; Bloomberg reported in July that the trader paid a record $2.9 billion to its executives and staff through share buybacks so far in 2021 after it claimed to have reached its best results ever in 2020.