Mexico Claims U.S. Firms Helped|Steal $300 Million From Gas Field

     HOUSTON (CN) – BASF and other U.S. energy companies “directly assisted and encouraged” organized criminals to steal hundreds of millions of dollars worth of natural gas condensate and smuggle it into the United States, Pemex, Mexico’s national oil company, claims in Federal Court. “At times the stolen quantity has approached 40 percent of the entire production of condensate from the Burgos Field,” a giant production region on the Texas border, Pemex says.

     Pemex claims it has lost more than $300 million of the condensate to theft since 2006. The thefts are a major problem for the Mexican government, as Pemex accounts for one-third of Mexico’s annual revenue, according to the complaint.
     Condensate is produced along with natural gas, according to the federal complaint from Pemex subsidiary Pemex Exploración y Producción (PEP).
     “Criminal enterprises, under threat of violence to PEP employees and the public, steal condensate from storage facilities and hijack trucks hauling condensate to Pemex refineries,” Pemex claims.
     “The government has even enlisted the Mexican Army, summoning helicopters and trucks filed with soldiers” when PEP computers detect suspicious drops in pipeline pressure, indicating that condensate is being stolen, according to the complaint.
     The Burgos Field contains as much as 75 trillion cubic feet of natural gas; its production reached 4.8 billion cubic feet a day in 1999, according to a report from the bi-national Southwestern Consortium for Environmental Research and Policy. The region contains 84 percent of Mexico’s natural gas processing facilities, according to the report.
     No Pemex subsidiary or affiliate has officially exported condensate from the Burgos field into the United States since Aug. 1, PEP says.
     “Thus no legitimate condensate has entered the United States since Aug. 1, 2006.”
     But in 2009 defendant U.S. oil and gas companies Murphy Energy Corp., Trammo Petroleum, Bio-Nu Southwest dba Valley Fuels, U.S. Petroleum Depot and their officers knowingly coordinated the purchase and delivery of the stolen condensate to U.S. Petroleum Depot’s storage facility at the Port of Brownsville, Texas, Pemex claims.
     At the Port of Brownsville, the condensate was loaded onto a barge and shipped to BASF’s plant in Port Arthur, Texas, where BASF bought the “feed stock” and converted it for its own uses, PEP says.
     A recent U.S. Customs investigation of the transport and sale of stolen PEP condensate in the United States resulted in criminal charges against individual Donald Schroeder, Arnoldo Maldonado, Jonathan Dappen, Stephen Pechenik and Timothy Brink, PEP says.
     According to the complaint, Schroeder, of Houston, was president of Trammo Petroleum; Maldonado, of Edinburg, Texas, was president of “non-defendant co-conspirator Ygriega Energy Company dba Y Oil and Gas;” Pechenik, of San Antonio, was president of Valley Fuels; Brink, of San Antonio, was president of “non-defendant co-conspirator Continental Fuels.”
     PEP seeks punitive damages for RICO violations, conversion and unjust enrichment. It claims the defendants knowingly handled their stolen condensate.
     Pemex is represented by James Teater with Jones Day of Houston.

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