May 9, 2012

Pemex Exploration loses 400 billion pesos in accounting loss

La Jornada Americas Program Original Translation

The Monitoring Committee of the House of Representatives said yesterday that it would request the Secretariat of Public Function (SFP) to investigate the accounting disparity of nearly $400 billion pesos in Pemex Exploration and Production (PEP), which corresponds to losses in financial instruments abroad in 2009, an amount that was transferred as accounts receivable by Pemex Corporation in 2010.

The legislative commission noted that, later on, Pemex Corporation recorded the loss, which was noted in the 2010 public account, as an increase in investment in their subsidiaries, but without a specific contribution, technical merit, or authorization of the state-owned company’s board.

In detailing the adjustments that Petróleos Mexicanos performed to obscure the losses, the chairman of the committee, Damian Esthela Peralta (PRD) announced that the Permanent Committee requests Juan José Suárez Coppel come before them to explain what “accounting measures” were taken to allow the state-owned company to hide the movement of money.

Because, explained a document referring to the audit of accounts receivable and the past due loans of Pemex Exploration and Production, the financial statements of the subsidiary of Pemex show the loss of nearly 400 billion pesos.

“What does this mean? In any case, that the results of previous years, or in this case in particular, these should be considered as losses by Pemex Corporation and not an investment in subsidiaries,” explained the legislator.

The review of the accounts by the Supreme Audit Office of the Federation (ASF) said that the financial statements made by Pemex Corporation and Pemex Exploration do not disclose the nature of the loss generated by the subsidiary.

The ambiguity of the records in this area, the ASF concluded, prevented their auditors from determining the amount related to the financial instruments issued by Petróleos Mexicanos, or the debt instruments acquired by the oil company. “Therefore, the exact nature and type of the losses is unknown among the 389,564,700,000 pesos,” stressed the Supreme Audit Office of the Federation in its findings, presented yesterday by the PRD legislator.

Esthela Damián said the accounting movement was carried out from the office DCF-SUCOFI-GC-562011, on February 3, 2011, through which corporate finance management accounting instructed each of the subsidiary bodies to transfer the results determined in 2009 and register them as accounts receivable.

Given this, she said, the ASF ordered the undertaking of administrative responsibility and sanctioning for the acts or omissions of the public officials who conducted the transfer.

He also stated that Juan José Suárez Coppel should explain to the House the exact nature of the financial transactions that generated losses of 389.5 billion pesos and verify their connection to related financial instruments by Deferred Investment Projects in Spending (Pidregas) issued abroad. See Spanish original

Translation by Michael Kane, Americas Program

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