Mexico's Pemex sues U.S. firms over fuel smuggling

Reuters News
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Posted: Jun 02, 2011 4:43 PM
Mexico's Pemex sues U.S. firms over fuel smuggling

By Mica Rosenberg

MEXICO CITY (Reuters) - Mexico's state-run oil company Pemex is suing 11 U.S. companies for buying up to $300 million of fuel stolen by drug gangs and smuggled across the U.S.-Mexico border, court documents showed.

Pemex's exploration and production (PEP) unit filed the suit on Sunday in a U.S. district court in Texas, claiming some of the companies conspired with Mexican criminals to forge documents and smuggle the hijacked natural gas condensates.

"The defendants have participated and profited -- knowingly or unwittingly -- in the trafficking of stolen condensate in the United States and have thereby encouraged and facilitated the Mexican organized crime groups that stole the condensate," the complaint said.

Included on the list of alleged offenders are U.S. end-users of the liquid fuel, which can be easily refined into high-value oil products, including Plains All American Pipeline LP, SemGroup Corp's SemCrude subsidiary and Western Refining Inc.

Pemex's Burgos natural gas field that spans the northern Mexican states of Tamaulipas, Nuevo Leon and Coahuila has been menaced by powerful drug gangs branching out into new illegal rackets in search of more revenues.

"PEP has lost large amounts of its condensate, at times approaching 40 percent of the production of condensate from the Burgos Field. Since 2006, more than $300 million worth of condensate has been stolen," the lawsuit said.

Mexican criminals, some working with corrupt Pemex staff, also steal gasoline, diesel and even jet fuel.

This is the second time Pemex has taken U.S. companies to court, following on a suit last year brought against German chemical maker BASF AG and several oil trading companies for similar claims.

"This new civil demand, similar to last year, seeks to recover damages ... now that investigations in both countries have come up with evidence against more defendants," Pemex said in a statement. The company set up a toll-free number to receive anonymous tips on illegal pipeline tapping that can cause dangerous explosions.

Mexico is heavily dependent on revenues from its state-controlled oil industry, which accounts for around 40 percent of the government's annual revenues.

More than 38,000 people have been killed since President Felipe Calderon launched an army- backed campaign against cartels in late 2006 and the spiraling violence is reaching its tentacles into parts of Mexico's legitimate economy.

The claim details the mode of operation of fuel thieves, who have kidnapped, intimidated and killed oil workers in the area.

The cartels held up at gunpoint Pemex transport tankers and then built tunnels, and even their own pipelines, to move the gas condensates, the filing states. The stolen goods were then transferred into tankers allowed to cross the U.S.-Mexico border, either with forged documents or by bribing border officials, according to court documents.

"Since August 2006, no Pemex entity has sold PEP condensate. Thus, any Mexican condensate which entered the United States after August 2006 was stolen and brought in without title or right," the suit said.

(Editing by Sofina Mirza-Reid)