When you follow closely the Mexican oil and gas industry as we do, you come to realize that at least once a day you’re going to find news articles referring to a new episode of fuel theft somewhere in the country’s territory. This makes fuel theft one of the most discussed problems in the industry’s agenda for the country, yet with the attention it has been given, it should no longer be at the top of the priority list. Gustavo Hernández García, Subdirector of Planning for Pemex Exploration and Production, believes that organized crime has a meticulously structured operation to tap into the country’s pipelines and cause heavy losses for the NOC. Hernández García explains how in the first six months of 2012, authorities have discovered 23 different illegal taps along a small segment of 36 inches in the Istmo de Tehuantepec pipelines. In spite of the fact that there are two other pipelines next to this one, neither of them show signs of illegal taping. “The first one transports light oil. The other two transport heavy oil from Maya to Cantarell. And only the one with light oil is tapped. The fact that they know which pipelines to steal from makes us think they are really well informed, to the point of knowing what type of crude oil is getting transported in each pipeline.”
“Organized crime is behind fuel theft in Mexico. This issue, which represents a million dollar loss for the NOC, unfortunately encourages harmful action cycles that damage social equilibrium of the principal petroleum entities.”
– Arturo Escobar y Vega, Congressmen Coordinator for PVEM
The first question that comes up to mind, then, is: why crude oil? Wouldn’t it be easier to just steal gasoline and sell it? Well, crude oil sells better, in bigger quantities, to companies requiring high-energy generating sources. Think cement plants, sugar cane plants, and brick plants: they all use heavy oil to keep the flames going continuously.
Hernández García also says that for this operation to take place, organized crime groups need to have very professional operations that include vast transportation systems. “We have certified controls for measuring the input at Dos Bocas and the output at Palomas. For every 100 barrels sent through Dos Bocas, the output is only about 96 to 94 barrels on average giving us an around 4,000 – 6,000 barrels of crude oil being stolen in total per day. A big quantity like that would probably need 60 tankers to be transported.” This is not a small quantity. You would need a significant amount of money, and an extremely well planned scheme to pull it off.
According to El Universal, the increase in number of barrels of oil and other hydrocarbons stolen has gone up from 1.5 million to an expected 2.2 million this year. This number comes out from the more than 1,000 illegal taps that fracture the Mexican distribution system – a figure that skyrocketed from the 136 that authorities had detected last year.
During 2012, Veracruz, Sinaloa, Tamaulipas, Sonora, and Nuevo León have been the most vulnerable entities in terms of fuel theft. It’s no coincidence that big organized crimes cartels are known to have an important presence in these states. The main solutions that have come up to fight this problem consist in bringing in the army to look for the illegal taps, capture the ones responsible for them, and thus, control fuel theft. But as we’ve spoken to different companies, we’ve come to realize that there are other internal tools to combat these figures.
NDT Systems and Services is a company that mainly does pipeline testing and inspection services. Even though their main goal is not to find illegal taps in the pipelines, but gas leaks and infrastructure issues, they usually find them as a byproduct. Companies such as OSISoft, Invensys, and Telvent deliver real-time solutions to give the NOC an opportunity to react quickly to the infrastructure problems that may cause high pressure or leaks within the pipelines. Both services are quite complementary, and if they actually work together, they might find a solution to the fuel theft problems in pipelines.
The complementary role of providers of both services in collaborating to find a solution is not something out of the realm of possibility. Óscar Luis González Arias, Director for Latin American Operations at NDT Systems & Services, strongly believes that companies providing the two different services would be able to substantially diminish the problem. “With a real-time monitoring and the complement of better inspection methods, we can provide faster reactions. Paired with the tools used in detection, a comprehensive system can be created to diminish fuel theft.”
Fuel theft has become a taboo issue in the country, and we need to stop criticizing the efforts being made, since the crime operation is overwhelming for the resources that Pemex has to fight them with. As Mexicans, it is our duty to start looking at ways we can help to make things better. What options do you suggest to do your part in helping the country?