Norway’s sovereign wealth fund divests from Pemex

WHAT Norway has divested from Pemex

WHY The world’s largest sovereign wealth fund cited corruption

WHAT NEXT The decision may ripple through global markets

Petróleos Mexicanos (Pemex), the Mexican state-owned oil giant, has come under renewed international scrutiny after the world’s largest sovereign wealth fund—Norway’s Government Pension Fund Global—divested from the company, citing serious and unresolved corruption risks spanning nearly two decades.

The divestment, totalling approximately MXN 2,700mn ($140mn), follows a recommendation by the fund’s Council on Ethics, which published a scathing assessment of Pemex's conduct between 2004 and 2023. The council concluded that the company had failed to address adequately or even acknowledge systemic irregularities, including multiple cases of bribery, opaque contract handling, and passive responses to internal and external corruption allegations.

The Norwegian fund, which manages more than $1.8 trillion in assets and is widely regarded as a global leader in environmental, social, and governance (ESG) standards, operates under strict ethical guidelines. Its decision to cut ties with Pemex is not merely symbolic—it signals a loss of international confidence in the integrity and governance of one of Mexico’s most critical economic institutions.

A pattern of scandals
According to the council’s report, reviewed by Mexicanos Contra la Corrupción y la Impunidad (MCCI), Pemex has been directly or indirectly linked to numerous scandals across four presidential administrations, including the government of former president Andrés Manuel López Obrador. Among the most prominent is the infamous Odebrecht affair, in which former Pemex director Emilio Lozoya allegedly received nearly $14mn in bribes in exchange for awarding contracts to the Brazilian construction giant.

But the case was not isolated. The report details payments by multinational trading firm Vitol, which admitted to bribing Pemex officials between 2017 and 2020 to secure contracts. One Vitol employee confessed to paying at least $600,000 in bribes to employees at Pemex Procurement International (PPI), a subsidiary of the oil major. These bribes, according to the council, extended beyond Mexico to include officials in Ecuador and Brazil.

Even before the Odebrecht and Vitol scandals, Pemex had already been involved in controversial purchases such as the Agronitrogenados fertiliser plant from Altos Hornos de México (AHMSA) in 2014. The facility, reportedly valued at only $50mn, was bought for a staggering $475mn, a transaction that investigators have linked to yet another Lozoya-orchestrated kickback scheme.

The 2015 acquisition of Fertinal, another fertiliser producer, also raised red flags. Although the value of that transaction was not disclosed in the council’s summary, it forms part of what appears to be a long-standing pattern: inflated deals, weak oversight, and silence in the face of accusations.

Structural failures and institutional apathy

The report is particularly critical of Pemex’s internal governance and its unwillingness to cooperate with external investigations. The council noted that while the company claims to operate an anti-corruption framework based on international recommendations, it provides virtually no transparency on its implementation. Pemex has not disclosed its risk assessments, internal audit results, or how many staff are dedicated to anti-corruption tasks.

Moreover, Pemex’s current official line—that no incidents of bribery have been reported in the past five years—stands in stark contrast to publicly documented cases. As the council noted, this claim raises serious doubts about the effectiveness and credibility of the firm's reporting mechanisms. The company has also refused to share detailed information with the Norwegian fund when requested, further reinforcing the perception of institutional opacity.

In some instances, Pemex has gone as far as to dismiss media-reported corruption cases as “false” or “sensationalist,” rather than addressing the substance of the allegations. The council found this posture deeply troubling, especially in light of new reports suggesting retaliation against whistleblowers. One engineer, with 23 years at the company, was allegedly fired in 2023 after repeatedly reporting environmental risks and suspected corruption at the Antonio Dovalí Jaime refinery in Oaxaca.

Political reactions and limited accountability

The reaction from the Mexican government has been subdued. During her daily press conference on May 12, President Claudia Sheinbaum acknowledged the fund's decision but claimed not to have received formal notification. She attributed the concerns to the Odebrecht scandal and noted that the allegations span back to 2004, implying they were not entirely relevant to the current administration. Nevertheless, she admitted the need to consult Pemex directly to clarify the situation.

However, the council’s assessment made it clear that corruption risks were not confined to past governments. It highlighted poor follow-up on internal complaints and new irregularities that persisted under López Obrador’s administration (2018-2024). While López Obrador had made anti-corruption a hallmark of his tenure, Pemex remained a glaring exception—an institution largely shielded from meaningful accountability.

A cautionary signal to global investors

For Norway’s ethics committee, Pemex’s record was incompatible with the fund’s investment standards. “The risk of continued corruption is unacceptably high,” the council concluded, recommending exclusion from the fund’s investment universe due to persistent economic crime risks.

The implications are significant. Pemex is not only the financial backbone of the Mexican state, contributing over 10% of public revenues, but also a litmus test for Sheinbaum’s commitment to institutional reform. Losing one of the world’s most respected investors over governance issues is a reputational blow with potential ripple effects across global markets and further complicates its already precarious financial position.