Hi everyone, two weeks ago a heard news about an oil-theft tunnel being discovered near Monterrey. Here I´ve tried to locate where the tunnel could be located and the patterns of precious illegal intajes in the area. Hope you find it interesting/useful. As always point out any discrepancy or suggest anything. Comments are always welcomed.
On April 12 elements of the Municipal Police and of the Guardia National broke into a cellar on the Colonia Gloria Mendiola, Municipality of General Escobedo, on the Monterrey Metropolitan Area. According to official reports an anonymous complaint made on April 4th had detonated an investigation led by the PGR that in less than two weeks located a massive illegal oil intake (or Toma) which had been used for stealing oil directly from Pemex´s pipelines. In this case the illegal draining facility had been built underground, through a tunnel connecting the Pemex buried pipeline with the cellar where the oil was decanted into massive deposits taken later to the street market in pick-ups or tanker trucks.
The intake once it was detroyed by Pemex workers
The huachicol, as oil-theft is known in Mexico, is not a novelty in Mexico. It started being exploited by illegal actors during the 1980´s and by the 90´s had evolved into a multimillion industry led by dozens of entrepreneurs and ``businessmen´´ that created real monopolies over the industry of oil theft. During the 2000´s several organized crime factions joined the industry by partnering or absorbing these entrepreneurs. The CDG, for example, started draining the Cuenca de Burgos shale gas deposits massively. The CDG and soon Los Zetas were caught dealing with several Texan companies the exportation of shale and natural gas condensate through the border to several storing facilities at Port Elizabeth. The penetration of drug cartels into the oil theft market was due to the cannibalization of sources of revenue. When illicit actors start needing funds to cover their operational expenses they first absorb illicit markets since they´re not subjected to Government protection and the people running them (such as the original huachicoleros) don´t have any other option but to partner or die. After the illicit markets comes the cannibalization of licit businesses: maquilas, restaurants, gas stations, shopping malls, casinos, etc. One after the other, they all fall into the arms of organized crime, either by direct absorption or through extortion/derecho de piso. By the 2010´s most of oil theft networks operating in Mexico belonged to organized crime factions. This doesn´t mean that there aren´t independent huachicoleros. In fact, there are multiple examples of groups running their own theft schemes. But it is impossible for them to operate such an illegal market without paying a fee to the criminal cell controlling the territory where they operate. Sometimes the pressure is harder and the huachicolero group is merged with the criminal cell, as happened for example in Veracruz or Nuevo Leon, where due to the aggressive expansionist strategy of Los Zetas most of the huachicol networks were force to join the group.
As a result, there has been a real boom in the huachicol business. In 2004, two years before the war on cartels was declared by Comandante Borolas (aka Felipe Calderon) only 102 illegal intakes were detected. By 2006 the number of intakes had increased to 213, but by 2010 it had jumped to 691. The illegal intakes skyrocketed next year, on 2011, when they reached 1,361 (nearly doubling in 12 months) On 2013 2,613 where detected and on 2014 the number had reached 4,219. In conclusion, from 104 to 4,219 intakes in less than a decade, peaking at times when the cartel turf wars also peaked (just look at the 2011 increase coinciding with the eruption of hostilities between CGG and Los Zetas)
Illegal intakes in Mexico until 2014
Organized crime in Mexico uses three different methods in order to steal oil:
- The most famous one consists on digging the soil until the buried pipeline appears, improvising an intake by directly breaking the pipe and stealing as much oil as possible before the authorities arrive. In order to save time and collect as much oil as possible. The huachicol networks using this tactic have previously contacted hundreds of people who for a fixed fee are told the place where the action will take place. These people appear at the scene with plastic cans and decanters trying to recover some liters of oil and confront the authorities when they arrive with Pemex personnel to block the leak. Although this method is very famous since it is carried at day broad light, it represents only a tiny fraction of the total of oil being stolen in Mexico (approx. 15% of the total)
- The second method is to steal oil from Pemex facilities (such as refineries) and tank trucks. For doing this the huachicoleros usually are colluded with Pemex personnel (truck drivers, refinery workers or Labor Union delegates) who give them the time and place to empty the deposits and fill them with water or other liquid agents.
- Parallel Drainage Systems: this system is the best one since it is difficult to detect and allows the cells running it to steal extremely huge amounts of gas. It consists of connecting a parallel pipe network to the original Pemex pipeline and redirect them to a place where the alternative pipeline network is used to fill hundreds of tanks without anyone noticing. These kind of pipeline networks are usually built underground through tunnels and are connected to a basement where the extraction takes place.
Pemex tries to detect these parallel networks through changes in pressure inside the pipelines. When someone prickles a pipeline it immediately causes a drain of oil that reduces the pressure inside the gas pipe and this decrease in pressure is immediately detected by special valves that report pressure incidents to Pemex facilities, which in turn partner with police forces and go to the area where the pressure is detected to find out what is happening. Nevertheless, the people running these parallel networks can avoid pressure changes by injecting pressurized water. In other words, when they start extracting oil from a pipe, they immediately connect a hose through which water is pressurized into the pipeline with the assistance of a compressor.
Contrary to the other two methods this systems makes it possible to obtain large amounts of gas while remaining completely anonymous both for local authorities and external actors (such as rival groups or corrupted Pemex personnel with whom one must partner in order to drain the tank trucks) After being drained from the pipeline the gas is redirected towards the basement were the hoses have been connected to storing devices, generally plastic palet containers with capacity for 1,000 liters or several other types of barrels. It´s more difficult to funnel the stolen oil directly to a tank truck since this type of vehicles are big and noisy and can attract attention. Also, there´s the problem of receipts and seals. When Pemex tank trucks are operating distributing gas, the driver is provided with several receipts certifying his load, origin and destination. The control system is made even safer with plastic or metal seals used for the sealing of loading/unloading valves. If you want to fill the truck with a new you must need to break both seals, the one at the exit valve to empty the tank from its original load and the loading valve seal in order to fill the tank with stolen gas. Nevertheless, this system is far from being perfect and it still is possible to trick it.
Classic Parallel System Scheme
The parallel huachicol theft system being discovered two weeks ago at General Escobedo was quite sophisticated in my opinion. In fact, most of the parallel networks are sophisticated because they are operated by professionals, not by crooks that only show up to extort Pemex employers or to drain the pipes publicly. A lot of the people running these parallel networks are former Pemex employees and know how to install their own pipes and connect the pressurized water into the pipeline to trick the pressure valves. In fact, the ``huachitunel´´ of General Escobedo, as these underground facilities are known, was excavated approx. 1,5 meters underground. It had an extension of 30 meters long and according to the videos and images obtained it was in a particularly good condition: clean, tidy, and well illuminated with electric light.
Interior of the Tunnel
The entry to the tunnel had been made in order to simulate a concrete sewage cover in order to disguise its illegal purpose.
The entry, simulating a sewerage entry door
Inside the tunnel authorities found several instruments used for the maintenance of the drainage system as well as, and this is important, 10 high pressure industrial hoses. I´m not able to assure it, but of those 10 hoses 1 or 2 could have been used to inject water into the pipeline while oil was being drained.
Hoses found inside the tunnel
There are two things about this ``huachitunel´´ attracting my attention. First, according to the official explanations this parallel facility was quite old. In fact, it was estimated that it had been operating at least for a year. This means that during more than 365 days the huachicol network running the scheme had a disposable pipeline at hand. I´m not saying they´ve been operating the huachitunel 24/7. In fact I suppose they had been operating it in intervals in order not to generate too much attention onto their activities, both from Pemex engineers detecting pressure changes and from local neighbors detecting strange movement and the characteristic penetrating smell of oil that quickly filters through earth and comes outside, to the streets. Second, the place where the huachitunel was located isn´t a rural area. In fact, it is in a highly populated area on the outskirts of Monterrey. The fact that the people running this scheme have been able to dig a 30 meters long tunnel from a basement, introduce nearly a dozen pressure hoses operated through compressors and conduct their operations massively during a long period of time demonstrates how sophisticated this market has become.
Now, the huachicol in the Colonia Gloria Mendiola is nothing new. It happens that parallel to the Colonia Gloria Mendiola run 4 Pemex distribution channels: two poliductos/polyducts (pipelines channeling already refined hydrocarbons, which are the most targeted by huachicoleros since they obtain the product already refined and don´t have to refine it by themselves) and two gasoductos/gas ducts (funneling natural gas) The first polyduct connects the Terminal de Abastecimiento y Reparto (Supply and Distribution Terminal) of Sabinas in Coahuila and the TAR of Santa Catalina at the southwest of Monterrey. The second polyduct is connects the Satelite TAR of Santa Catalina with the TAR of Cadereyta, a very important one since it´s closed to one of the only six Mexican Pemex refineries located at Cadereyta Jimenez, at the east of Monterrey. Between 2009 and 2014 only 10 clandestine intakes were detected at the Colonia Gloria Mendiola. 5 of them drained the Satelite-Sabinas polyduct while the other 5 drained the Satelite-Cadereyta polyduct.
Illegal oil intakes in the Colonia Maria Mendiola
Illegal intakes at Maria Mendiola (highlighted in yellow) seen from higher altitude. Look at the perfect straight line they form, just following the pipelines.
Of the 10 intakes only 1 was permanent, this means parallel, with home-built pipes connected to the polyduct and operated regularly. The intake was made into the Satelite-Cadereyta polyduct at Maria Mendiola´s western limits on March 19th, 2014 and operated from a house located in the Calle Asís. As we can see the intake was located just under the house. In the case of the tunnel conecting with the illegal intake discovered two weeks ago, it must connect a house near the polyduct, since the tunnel was only 30 meters long.
The only Permanent huachicol intake made at Maria Mendiola until now (according to available data)
I haven´t been able to gather data since 2014 about illegal intakes taking place at the Colonia Maria Mendiola, but I´m quite sure they have increased exponentially. In fact, the pattern of illegal intakes near Monterrey can only indicate one thing: criminal groups are operating these intakes not anarchically but in a very neatly way. Always following the straight lines outliend by Pemex´s pipelines, near urban areas where they can hide the stolen oil and distribute it to local residents, etc.
Now, the question is who runs this huachicol networks in Monterrey. For me it´s obvious that during 2012/2013/2014 (when much of the intakes at Colonia Maria Mendiola happened) the oil theft market in Monterrey was controlled by the Zetas since the Treviños and their affiliates assaulted the city and its surrounding trying to absorb the illegal markets and to attract and affiliate local gangs and ``clicas´´. According to the info published on Valor Por Tamaulipas and Grillonautas the huachitunel discovered two week ago in Maria Mendiola belongs to the Cartel Del Noreste, the organization lead by Juan Gerardo Treviño Chavez aka El Huevo, nephew of the Treviño brothers. If this is true it could be ventured that the CDN is using local huachicol networks in Monterrey. If this is also true we should ask ourselves if this people are just buying gas from them or if they are controlling the whole businesses extracting and selling the hydrocarbons just as Pemex does.
Nevertheless, I´m not sure if this is true. I know that several CDG factions have a presence in the western and southern parts of Monterrey connected to Reynosa and I´ve previously tracked their stolen oil purchases at Cadereyta and the surrounding areas. However, I´m totally blind regarding the rest of Monterrey´s underworld. Perhaps border experts such as MX or LeChef could bring light on here because I don´t want to make any betting on such a topic.
Much appreciated reading, Red!
I just wanna say that Mexico could have avoided a lot of these problems or at least been able to respond quickly, even with the parallel system, if they'd use block-chain tracking technology readily available in many other oil-producing nations. In fact, the lack of implementation is rather suspicious.
Le Chef, what is block chain tracking technology? Above most of our heads.
In reply to this post by leChef
Do you mean a nodal tracking system, leChef?
In reply to this post by juris
This is the basics:
I am not in the industry, so I don't know product names or anything.
Interesting but it’s Mexico so not hopeful this will happen. But with oil so cheap now they may have to start caring The bad thing is that the cartels will have make up the difference by further extorting the people.
Sorry people for making so many posts in a row - a really great article about gas theft in Mexico.
My belief is that the technology is developed in the Permian Basin with fracking. With fracking you can horizontally drill and inject the water into the formation to push the oil to the wells.
Seems to me that parallel water systems, allow the pressure of the pipeline to be maintained while siphoning off the gas.
Oil went to $20 and then below $0 in the past week. With coronavirus and the lowest prices ever, unemployment is at a record high in the Basin.
This is bad news for Marro and CJNG. Since they can't move their product for a profit, they have to rely on other enterprises. Within this blog and mainstream media, they say the cartels are resorting to higher prices for meth, another type of fentanyl, etc.
I disagree with that assessment. Most users are marginalized people. They get less hand-outs or are unemployed. The only resource is burglary and robbery, which has dropped significantly. The demand side for gas and drugs, is low. Psych hospitals are mainstream still, because their capacity and reimbursements by the gov't are at an all-time high.
I've seen gas at $1.45/gallon and that's only because they are trying to deplete their inventory for even a lower price to keep a crack in the economy moving.
The coronavirus has caused many good outcomes. Tighter families, more outdoor activities, cheaper oil prices, rents and safe travel. It is here for a good while, but it will get tougher and the cartels, will suffer. Their overhead is high, very high, and their revenues are crashing. This might be another good outcome for the common man.
Again, my apologies for many posts in a short time, not allowing the readers and authors their due respect to chew the news.
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