HOUSTON (CN) - American oil companies are knowingly importing stolen natural gas condensate that Mexican drug cartels have stripped from the Burgos oilfield, the national oil company of Mexico says in Federal Court.
Pemex Exploración y Producción (PEP) says the fraud involves 12 oil and gas companies, including ConocoPhillps and Shell Chemical Company. It filed a similar lawsuit against some of the same defendants in June 2011.
Since 2006, cartels have stolen at least $300 million of condensate from the Burgos Field by hijacking Pemex tankers at gunpoint, and stealing the condensate from its 52 transfer-and-delivery systems, the complaint states.
The cartels have also allegedly kidnapped and threatened PEP officials, and "built tunnels and even their own pipelines to facilitate the thefts."
Natural gas condensate is a feedstock used by refineries and chemical plants.
To steal the condensate, the cartels take advantage of the expanse and isolation of the Burgos Field, which cuts across Mexico's three northeastern states, Tamaulipas, Nuevo León and Coahuila, PEP says.
"The Burgos Field covers an area of more than 70,000 square kilometers of surface land roughly the size of Ireland," according to the complaint. "PEP operates 2,287 gas wells within the Burgos Field. Gas and condensate produced in those wells is transported to 150 collection stations.
"Pipelines then transport the gas and condensate from those 150 collection stations to tanks at one of PEP's 52 transfer and delivery systems within the Burgos Field. After collection at the transfer and delivery systems, PEP transports the condensate by pipeline or tanker truck to its central storage facility near Reynosa, Tamaulipas."
Nothing has stopped the thefts though Pemex says it has enlisted the Mexican Army to guard the fields, created an anonymous hotline for citizens to report the looting, and installed security cameras and an "elaborate electronic system" to detect pressure losses when condensate is stolen.
"Military and private helicopters await any electronic notification of suspicious drops in pressure or other suspicious activities, but the Burgos Field is so expansive that many times it is impossible to get to the theft locations in time to stop the criminals," Pemex says.
Since Pemex's operations account for about 40 percent of the Mexican government's annual, it claims the thefts are siphoning money away from Mexico.
Any Mexican condensate that has entered the United States between August 2006 and late 2011 was stolen and brought in without title or right, Pemex says, noting that none of its entities sold condensate during that time.
The Mexican government is trying to crack down, having brought criminal charges over the thefts against 140 people, including two Mexican customs agents who allegedly let tanker trucks filled with stolen condensate use phony documents to pass through Mexican customs and into the United States.
"Dozens of tanker trucks involved in the scheme, some filled to capacity with stolen PEP condensate, were seized," Pemex says. "But as extensive and costly as PEP's and Mexico's efforts have been, they cannot stop the cartels' pursuit of Mexican condensate. The cartels are relentless and well-funded. As long as there is a US market for stolen condensate, the thievery will continue.
"PEP's efforts are also hampered by the proximity of the US-Mexican border to the Burgos Field. In a reversal of the classic Western movie, Mexican criminals have sought refuge with their ill-gotten gains by crossing the Rio Grande to the North, where the Mexican government has no authority to follow. Once the condensate passes the US-Mexico border, its final destination becomes inherently undiscoverable to PEP."
Pemex says ConocoPhillps and its alleged co-conspirators "knowingly or unwittingly" participated and profited in trafficking stolen Mexican condensate, and "thereby encouraged and facilitated the Mexican organized crime groups that stole the condensate."
The defendants are:
Murphy Energy, an Oklahoma corporation with an office in The Woodlands, Texas; High Sierra Crude Oil & Marketing, a Colorado company operating out of Waxahachie, Texas; Big Star Gathering, a Texas partnership owned by co-defendant St. James Energy Operating, a Utah corporation; F&M Transportation of Edinburg, Texas; Plains Marketing, a Texas limited partnership working out of Houston;
Superior Crude Gathering, a Texas corporation located in Corpus Christi;
ConocoPhillips, a Delaware corporation with its main offices in Houston; FR Midstream Transport fka TexStar Midstream Transport, a Texas company out of San Antonio; Marathon Petroleum, a Delaware limited partnership with its main offices in Findlay, Ohio; Shell Chemical, a Delaware company working out of Houston; Shell Trading US, a Delaware company based in Houston; Sunoco Partners Marketing & Terminals, a Texas limited partnership with its main offices in Philadelphia.
Though Big Star, Superior Crude and F&M Transportation knowingly participated in the scheme to import and market the stolen condensate in the United States, according to the complaint, the other defendants "appear to have been innocent and dealt in the condensate only after it was laundered."
Immigrations and Customs Enforcement within the U.S. Department of Homeland Security has been investigating the matter, and several people have been convicted in Southern Texas federal courts for receiving and selling the stolen condensate, or conspiring to do so, Pemex says.
Pemex sued individually and as an assignee of AGE Refinery, Flint Hills Resources and Valero Marketing and Supply, which transferred all their claims related to their purchase of stolen Mexican condensate to Pemex.
Pemex accuses the companies of illegal possession and use of Mexican sovereign property, conversion, unjust enrichment, fraud, breach of warranty, and breach of contract. It is represented by Houston attorney Mark Maney.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.