With the backing of the Obama Administration, the U.S. Export-Import Bank intends to guarantee $1 billion in loans to PEMEX, the Mexican government's national monopoly oil company. The reason for the loans is to encourage PEMEX to buy supplies and services from American providers.
Despite President Obama's moratorium on U.S. deepwater drilling in the Gulf of Mexico, the U.S. Export-Import Bank intends to guarantee $1 billion in loans to PEMEX, the Mexican state oil company, to bolster the company's oil drilling in the region.
The bank, which is the official American export credit agency, loaned more than $1 billion to PEMEX in 2009 -- when the company was the bank's largest borrower -- in support of its drilling activities. That year, the bank also guaranteed two loans totaling $300 million made by a commercial lender.
Support for American companies is laudable, but that support would be a lot more direct and complete if the Department of the Interior were to lift the deepwater moratorium, and clarify permitting standards which have brought a de facto moratorium to shallow water drilling by American companies in the American sector of the Gulf of Mexico.
The Export-Import Bank said the moratorium doesn't affect its pending deal with PEMEX.
"None of these projects involve deepwater drilling," bank spokeswoman Maura Policelli told FoxNews.com in an e-mail.
Ha-ha. Mexico's Ixtoc well was a shallow water well, too. When it blew out in 1979, it blew for 9 months, more than twice as long as the Macondo well, which was in water a mile deep.
"Before deciding whether to approve applications for financing, Ex-Im Bank performs rigorous environmental, safety and financial due diligence activities, including on-site inspections" Policelli said
"After financing is approved, the bank monitors the company's financial, environmental and safety activities and performs on-site inspections as often as twice a year," she said.
Oh, give me a break. We've got a bank that's going to perform due diligence on a loan. They are not in any kind of position to pass judgment of PEMEX's safety and environmental practices, much less guarantee compliance. "Twice a year"? Now that's vigilance. Ex-Im's due diligence of PEMEX will give new meaning to the word "perfunctory".
PEMEX is notoriously lax and politically-influenced. It is hamstrung by its labor unions. They are a notorious slow-pay, and have a history of nationalizing American assets when they fall behind on payables. National oil monopolies are in the position of having no competition, and do not operate under the rigor of governmental permitting and oversight that govern U.S. companies operating is U.S. waters.
Why does the Adminsitration think that PEMEX can be trusted to operate responsibly in the Gulf of Mexico, but U.S.-based companies cannot? Is it because they're not Republicans?
Cross-posted at VladEnBlog.