Mexico: Fuel theft on the rise

Noel Maurer has a couple interesting posts about the rise in fuel thefts by Mexican Organized Crime Organizations, or MOCOs. First, he gives some numbers. Then he explains the logistics, as laid out in a US lawsuit.

Pemex filed a federal lawsuit … against a group of American refineries for knowingly buying stolen natural gas condensate…

The Zetas intercept the oil in one of three ways. The major one is to simply tap into the transfer and delivery systems. (To do this, the Zetas needed to build their own pipelines, a pretty impressive accomplishment.) The secondary one is to hold-up the tanker trucks on their way to Reynosa. The final one is to kidnap Pemex officials and force them to divert condensate.

Now, the Zetas can easily fence refined products inside Mexico, but they can’t sell condensate: Pemex operates the only refineries! So they have to move it to the U.S. According to the lawsuit, the stolen condensate was moved by tanker truck (think about that for a moment) to the border. Before crossing, however, the Zetas transferred the stuff to newer trucks that meet U.S. regulations. The drivers then presented forged export documents, sometimes mischaracterizing the condensate as naphtha. They would then sell the stuff to the U.S. defendants.

Big Star and F&M Transportation bought the oil from Ygriega Energy Corporation of Edinburg, Texas, whose owner, Arnaldo Maldonado, has already pled guilty to felony conspiracy to receive and sell stolen goods… Finally, Western Refining bought condensate from companies like Continental Fuels, whose president confessed to trafficking in stolen goods.

In other words, according to Pemex, Big Star, Superior Crude and F&M “actively and knowingly participated in a conspiracy to import and market the stolen condensate in the United States.”

Interesting stuff for those of you who are interested in the antics of the many actors who are drawn to Latin America’s oil wealth like flies to shit. Go take a read.

2 thoughts on “Mexico: Fuel theft on the rise

  1. Kepler

    Wao! One of the many wonders from NAFTA, I suppose?
    These Zeta blokes are really a cancer.
    What to do? I suppose US Americans won’t care much about it, just like the cocaine problem and the weapon flow to Mexico…
    Is there a possibility to build some kind of intelligent sensors everywhere in the line? I reckon if they did, the gangsters will develop a system that pretends there is no oil being diverted or something.

    1. sapitosetty Post author

      Honestly if anyone really gave a fuck about supply chain management in oil, it would probably be a simple matter to scatter either a tracer chemical or a nano-scale RFID chips in the pipeline flow. But just as PDVSA has rejected various proposals for improved supply chain management, I suspect PEMEX would do the same. The men in charge of executing such a project are the same ones likely getting rich off the current situation.

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