Hydrocarbon theft is a huge and growing problem in Mexico. Pemex recognized accounting losses from theft reached $1.3 billion in 2014. That is not a huge factor for a company that enjoyed sales of $108 billion (page 18), but it made up a big part of the company’s net loss of $18 billion. In the past, the main thefts were of natural gas condensate taken from the Burgos fields. Pemex shut that down by suing American refineries who bought the stuff. (See this blog from 2012 and this law review article from May 2014.) Victory!
Except, well, the thieves turned to stealing natural gas and refined products, which can be flogged directly on retail markets. So now we have a new law (the link goes to the text, courtesy of Dwight Dyer) that ups the penalties for stealing oil. Prison terms will rise as a function of the amount stolen. Moreover, anyone abetting theft by revealing operational details of midstream operations will be punished ... as will anyone owning land upon which theft takes place or anyone failing to report criminal activity. Hell, the new law punishes underinvoicing.
Awesome. But as Dwight Dyer points out, the law is only as good as enforcement. Only 33 Pemex employees have been arrested in the past three years of the Peña administration ... as compared to 66 arrests during the six years of the Calderón administration. So Dyer is skeptical.
And I would like to add an additional problem with relying on a new law. Criminal organizations in Mexico have a way of making people offers that they can’t refuse. Unless (say) the Zetas are rendered unable to credibly threaten Pemex employees and local landowners, then harsh new penalties on the people they are threatening won’t accomplish a whole lot.
Color me skeptical.