Mexico’s huge national oil company, Pemex, has shut down a large chunk of its natural gas fields because of the apparent kidnapping of dozens of employees and contract workers by drug gangs that are also stealing and selling oil and gas. It’s a situation increasingly similar to oilfield battles in Nigeria, where a corrupt government essentially rents out its troops to oil companies.
The chaos in Nigeria, including strong accusations of human right abuses by the hired troops, has gone on for years. The Mexican oilfield battle is newer, a result of two things: The increasing political strength of drug cartels, and Mexico’s decision to allow foreign oil companies to develop natural gas fields in northern Mexican states where drug violence is especially rampant. (You can see from the accompanying photo what a tempting target these brand-new gas plants would make. )
Both nations, however, are case studies of the destabilization that results from a state dependent on oil, and corrupt at high levels. The oil wealth gins up the corruption level, and the entrance of private oil companies can only make it worse because they greatly complicate oilfield security.
Either foreign companies hire the mercenaries of a company like the reviled former Blackwater Security, or they pay for government troops, which then are essentially under the command of a foreign corporation.
An excellent piece by Tracy Wilkinson of the Los Angeles Times detailed the kidnapping story, which has been kept under wraps in Mexico. Families of five kidnapped Pemex employees haven’t heard a word from their loved ones since the abductions in May. It’s even worse for the 30 or so missing subcontract workers, because government-owned Pemex has no direct stake in their well-being.
From the story:
After dedicating nearly half a century to testing and exploration in the basin, Pemex in 2002 took the unusual step of opening it up to foreign investment, in contrast to Mexico’s historic protectionist attitude toward natural resources. Pemex officials anticipated an injection upward of $8 billion.
Employees of Pemex and a handful of foreign-owned firms were earning well in the basin, living good lives and working in relative safety.
Then convoys of mysterious gunmen started plying the roadways, followed by shows of force, intimidation, beatings and, finally, the abductions. Pleas for help and better protection, union leaders and workers say, went unheeded. The exact motives behind the May kidnappings remain unclear.
Ramirez, the senator, said the cartel responsible, probably the Zetas, may be after technical information to elude the measures Pemex is taking to guard against the rampant thefts of gas and oil.
Whatever the motive, the effect has been to cripple operations in some areas of the basin.
“In the Burgos project, there are areas we cannot access,” Carlos Morales Gil, director of exploration and production for Pemex, said during a news conference in the Tabasco city of Villahermosa in July. It was a startling admission.
“We are not going to enter any area where security is at risk,” he added, calling for increased army and navy protection for oil and gas installations.
Pemex would not comment to The Times or make an official available for this story.
However, a confidential report submitted to Congress in July and made available to The Times acknowledged that stolen natural gas and delayed gas production have cost the company nearly $50 million in just the first five months of this year.
The contractor and Pemex employees have been pleading for at least months for better security, especially following a gangland takeover at a major well in May.
But who will provide the security?
With so many private contractors in the gas fields–mostly drilling and rig-building companies, not brand name like Exxon or Shell–there’s no clear line between public order and private protection. And when does protection slide into abuse of local populations that are often often both terrified of the gangs and in thrall to their money?
Mexico’s army is generally regarded as more honest and dedicated than most of its police departments, but even soldiers are subject to the temptations of drug money. And if the army is sent to guard private oil and gas wells, who commands the troops?
There aren’t any good answers. Which is why a country like Mexico, which gets one-third of its government income from oil and gas, plus billions more poured into the economy by the drug trade, should fear becoming more like Nigeria.