Big Oil in Mexico and links to organized crime - East Valley Tribune: Opinion

Big Oil in Mexico and links to organized crime

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Posted: Thursday, June 30, 2011 10:35 am

MEXICO CITY - Drug cartels have drawn all the attention lately when it comes to crime here in Mexico. But one crime recently came into public view that looks suspiciously like an extension of the drug trade.

The Mexican military, with a lot of U.S. support, is involved in fighting organized crime. The purpose is to disrupt supply lines, downsize crime organizations with apprehensions, and stem the drug flow. Yet without serious reform of the drug-consuming population, that's unlikely.

Since 2006, this part of the international drug war has come at the cost to Mexico of 40,000-plus lives, mostly civilians, and with the military intervention has come a rise in reports of human rights violations.

Yet some important busts have taken place and a number of capos have gone down. But what if instead of "drugs" the commodity was oil? In real terms and as a metaphor, both have been referred to as U.S. addictions.

Well, there is news on this front. There's action from an investigation in the Mexican oil patch.

Mexico's state-owned oil company PEMEX filed on June 2 a suit alleging some U.S. companies were trafficking in oil stolen from their fields. The suit was brought in U.S. District Court for the Southern District of Texas in Houston.

The accused companies are the U.S. division of Germany's BASF, Murphy Energy, Plains All American Pipeline, SemCrude, Trammo Petroleum, Valley Fuels and U.S. Petroleum Depot, Western Refining. The suit alleges they participated in and encouraged the smuggling of stolen fuel.

PEMEX had already filed suit in the same court in June 2010, but in its new filing added three more firms as part of an initiative to combat the theft and smuggling of natural gas condensates from its facilities in northern Mexico, particularly at the natural gas fields in the Burgos Basin, the company said.

A "condensate" is sometimes called "light oil." Petroleum (oil and gas and condensate) fluids are mixtures of many different hydrocarbons. The distinction with "oil" can be arbitrary. Both are "crude" in the sense their compositions are whatever comes from a well with no processing other than simple separation.

PEMEX claims that approximately $300 million of gas condensates had been stolen from Burgos Basin since 2006. Perhaps $250 million in oil was stolen in the prior four months, it reported June 16.

In the recent lawsuit, the Mexican state-owned monopoly accused the companies of conspiring in the illegal activity with several organized-crime gangs that stole fuel from fields in the Burgos region in the northern border states of Nuevo León, Tamaulipas and Coahuila.

The criminals allegedly siphoned the gas condensates from storage facilities or hijacked tanker trucks and then moved the fuel across the border to the United States, mainly to Texas.

In 2009, the news magazine Proceso reported that PEMEX was beginning to move aggressively after the heads of gangs specializing in siphoning the commodity from ducts. Specifically, the state oil company was looking for organized-crime involvement to dismantle those operations.

Organized crime got involved as part of its expansion from other crime franchises. Journalist Juan Alberto Cedillo has a new book, "La Cosa Nostra en Mexico (1938-1950)" about how the present-day drug trade is the Frankenstein monster that began from a 1940s Cosa Nostra crime-syndicate operation. He says, "Criminal organizations have diversified their businesses, they no longer focus only on the sale of drugs, but also extortion, protection rackets, pirated goods, trafficking in persons, kidnapping, sale of adulterated alcohol or gasoline from PEMEX."

Along the trade route, fences might act like middlemen, just as in drugs. When it comes to oil, they might not be professional racketeers. But like oil and condensate, it's hard to tell the difference, and they don't seem to care what crime group they have to deal with to get it.

Jose de la Isla writes a weekly commentary for Hispanic Link News Service. E-mail him at

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