Petro-Plunder Worsens in Mexico

Scaring off sorely needed investments in fuel distribution systems.  

A year and a half after Mexico opened its fuel market to private competition, almost all gasoline sold at BP and Royal Dutch Shell stations continues to come from state-owned Petróleos Mexicanos, A.K.A. Pemex.

Mexico lacks a sufficiently advanced and coordinated network of oil pipelines and storage terminals that would allow the flow of imported products from the port to the gas stations. As the company’s chief executive, Jose Antonio González Anaya, said in a recent visit to Washington, Pemex has a “grotesque lack of storage and transportation capacity.”

 

Companies such as Monterra Energy — backed by KKR & Co — Mexican Invex, Glencore and a joint venture between TransCanada and Mexican firms Sierra Oil & Gas and Grupo TMM have announced pipeline projects at the Tuxpan fuel import center on the Gulf Coast. Other firms, such as Howard Energy Partners and BioUrja Trading LLC, have shown an interest in importing oil via newly built pipelines from the U.S.

But there’s one problem: security.

Mexico is one of the worst places in the world for fuel theft. It’s already costing Pemex around $4 million a day. That’s about $1.4 billion a year. Those doing the plundering include armies of amateur opportunists who live close to the major pipelines that crisscross the country as well as some of Mexico’s most ruthless and organized drug gangs

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