The government has taken control of Oceanografia after Citigroup (C -0.2%) discovered fraud on loans made to the oil-services company and requested an investigation. The supposed fraud began to unravel after Pemex found inconsistencies in how Oceanografia billed it. Shortly after, Mexico banned the Oceanografia from bidding on government contracts for 21 months, prompting Citigroup to review its dealings with the company.
“If this is not the first time Mexico is taking over such a private energy company this size, it would be one of the very few in history,” says former Deputy Energy Minister Mario Gabriel.
Earlier: Citi to lower Q4 earnings by $235M after discovering fraud.