Reuters: World News: Mexico accounting regulator says no fraud at Pemex

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Mexico accounting regulator says no fraud at Pemex Jun 7th 2012, 05:12 MEXICO CITY | Thu Jun 7, 2012 1:12am EDT MEXICO CITY (Reuters) - Mexican authorities said on Wednesday that state oil monopoly Pemex had not hidden losses of $30 billion, quashing accusations from opposition lawmakers in the run up to a presidential election in which overhauling the firm is set to be a key issue. The Mexican comptroller's office said it supported statements from Pemex that its accounting had followed rules accepted in Mexico and the United States, after a lawmaker from a leftist party said in May that the firm appeared to have scrubbed a 2009 loss of about $30 billion from its books. Esthela Damian of the Party of the Democratic Revolution (PRD) had said the loss was later recorded as an increase in assets. "There was no diversion of funds or any embezzlement," the accounting regulator said in a press release on Wednesday. Overhauling the state oil monopoly to introduce more efficiency and transparency is a top issue in the July 1 presidential election as Mexico relies on oil revenues to fund around a third of the federal budget. A Pemex spokesman said in May that the accounting issue had nothing to do with fraud and was linked to a change in the financing regime to fund long-term infrastructure projects. The oil giant later explained in a statement that as part of those changes, the gains or losses of Pemex's subsidiaries were transferred to the parent company from 2010. The 2010 results of Pemex's exploration and production unit were considered as accounts receivable, which explains the big gap noted by a congressional panel, the company said. HULKING BUREAUCRACY How to improve management of Pemex's hulking bureaucracy is high on the agenda in the election race, where the centrist Institutional Revolutionary Party, or PRI, has a wide poll lead over the ruling conservatives, the National Action Party (PAN). Both the PRI and the PAN are proposing major changes to the state-run giant to improve oil output and turn it toward long-term profitability. The PRD, by contrast, is opposed to significant outside investment in the company. 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 gross domestic product over a five-year period, said consultancy Capital Economics in a report. Pemex is not publicly traded and regularly operates at a loss because most of its revenue is gobbled up in taxes. (Reporting by Ioan Grillo; Editing by Joseph Radford) Link this Share this Digg this Email Reprints

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