Mexico losing over $1 billion annually to fuel thefts from pipelines

Fuel Fix:

Thieves are tapping into the pipelines of Mexico’s state-owned oil and gas company, Pemex, with such frequency and taking so much gasoline, the company is losing well more than $1 billion a year, leaving some U.S. companies with second thoughts about entering the market, a Rice University expert said this week.

The number of pipeline taps has risen from about 200 in 2006 to nearly 7,000 last year — almost 20 break-ins a day — according to an analysis of Pemex figures by Rice postdoctoral fellow Adrian Duhalt.

Losses have risen from under $1 billion in 2009 to $1.7 billion last year.

Mexican authorities have long taken a “hands-off approach,” Duhalt said in the paper, “Looting Fuel Pipelines in Mexico.”But the problem’s gotten in worse in recent years. Three years ago, Mexican officials deregulated the country’s oil and gas market and broke Pemex’s monopoly, inviting outside companies to take part, with hopes of spurring exploration and production and boosting the country’s sagging energy profits. But that action also encouraged gasoline theft, Duhalt said.

Now, he warns, the country must get a handle on the problem, or lose business.
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 Mexico needs to invest in drones to keep a watch over their pipelines and spot the thieves.  Drones and a response team could really cut into the fuel theft operations.  The failure to solve this problem will inhibit the desire of investors to the newly opened markets in Mexico.