Texas energy companies accuse Mexico of walking the tab on $229 million deal
SPLENDORA, Texas (FOX 26) - Spanning much of an industrial construction yard near Splendora, Texas, sits "exhibit A" in what many are calling a monster international rip-off.
It is a custom drilling rig, one of two ordered by Mexico's national oil company and built by dozens of American firms for a contract price of $229 million.
But for two long years the steel giant has sat where it was assembled because Pemex refuses to pay.
"If this doesn't get solved there are a lot of companies that are going to go bankrupt and a lot of other companies crippled, possibly permanently," said Mike Barnes, CEO of Loadmaster Drilling, the lead engineering lead player in the contract.
Barnes says more than 100 American companies invested labor, capitol and expertise in the construction process before Pemex and by extension, the Mexican government, broke the deal.
Kevin Kennedy, President of Kennedy Fabricating, says after two years of fruitless negotiations he's asking President Trump and the American Congress to intervene.
"I can't see how any American representative can sign any negotiation or trade deal with the country of Mexico with a case like ours unresolved," said Kennedy.
Barnes says the rigs were built to Pemex specifications and would not work for other potential customers.
Kennedy believes the wrong done him and hundreds of others is clear cut.
"This is strictly a case of a foreign entity, in this case Mexico, unilaterally and illegally canceling a contract for no reason," said Kennedy.
FOX 26 has reviewed documents from Pemex indicating company's inspectors found no technical problems with the rigs while under construction.
Pemex has yet to respond to FOX 26's request for comment on the vendor allegations.
Barnes and Kennedy say the unilateral contract termination and non-payment have prevented most vendor involved from taking on new projects because they have little or no capitol and are encumbered by heavy debt related to the Pemex project.
PEMEX responded to FOX 26 late Thursday night saying, “During the execution of the works, it was detected that the modular units did not meet the basic specifications requested, so in the exercise of the contractual rights that the consortium knew and accepted since the signing of the contract, the trust terminated the contracts.”
PEMEX goes on to say, “Pemex considers that the termination of the contracts was in accordance with the applicable regulations, and the causes for which the contracts had to be terminated are attributable to the consortium. Furthermore, prior to the termination of the contracts, the consortium was allowed to submit viable projects to correct the deficiencies, however, it did not do so.”