Colombia Oil Theft Surges as Smuggled Gasoline Dries Up, Data Show

BOGOTA (Reuters) — Theft from oil pipelines in Colombia is booming as criminal gangs look to replace dwindling supplies of smuggled Venezuelan gasoline for use in the drug trade, as shown by data seen by Reuters from oil-pipeline operator Cenit and tax authorities.

Gasoline is a key component in making cocaine but there have been shortages of the fuel in Venezuela during that country's social and economic crisis. So criminal groups in Colombia are tapping pipelines for ever more crude, which they must later refine. Colombian crime gangs also send some of that artisanal fuel to Venezuela, a reversal of historic smuggling patterns.

"Now it's switched," Yessica Prieto, project and investigations director of Colombian energy advocacy group Crudo Transparente, told Reuters. "It's ... Colombian mafias, or criminal groups, who are stealing Colombian crude, refining it illegally - obviously artisanally - and which crosses the border to Venezuela."

Theft of crude in Colombia - mainly from the Cano Limon-Covenas pipeline near the Venezuelan border - hit at least a six-year high in the first half of 2021, according to data from pipeline operator Cenit, a subsidiary of Colombia's majority state-owned oil company, Ecopetrol.

Stolen oil is processed in clandestine refineries and turned into a rudimentary gasoline known as "pategrillo" or "cricket's foot" - so-called for its green color - that is used in cocaine production, police and analysts said.

An average of 3,299 barrels of oil were being stolen per day in Colombia through June 30, up from 1,796 barrels per day in 2016, according to Cenit.

Compared to 2020, when an average of 2,744 barrels of crude were stolen each day, oil theft in Colombia rose by a fifth during the first half of this year.

While oil theft has surged, the quantity of gasoline apprehended under suspicion of being smuggled has fallen sharply over the same period, according to data from Colombia's DIAN tax authority seen by Reuters.

A peak of 694,894 gallons of fuel were apprehended by authorities in five provinces along the border with Venezuela during 2017.

That figure fell to 107,616 gallons by 2020, according to the DIAN. In the first half of 2021, just 18,484 gallons of fuel were apprehended.

The DIAN attributed the fall in contraband fuel to turmoil in Venezuela, where oil production and refining has fallen sharply, and the success of anti-smuggling legislation.

Venezuela's economic crisis "has driven the flow of hydrocarbons from Colombia to Venezuela," the DIAN said in an email.

The overwhelming majority of oil theft occurs along the Cano Limon-Covenas pipeline, with 2,430 barrels of crude stolen per day during the first half of 2021.

In 2020, 2,008 barrels of oil were stolen each day from the pipeline, Cenit said.

Once refined, the stolen crude is used to make coca paste, a precursor to cocaine. Leaves of coca are mixed with gasoline to extract certain plant compounds, with gallons of fuel required to make just one kilo.

Fuel may also be sent to Venezuela or used for machines at illegal mining sites, Colombia's police said.

"The main use is to process plant compounds during cocaine production," Brigadier General Jesus Alejandro Barrera, director of Colombia's rural police, told Reuters.

"Once (criminal groups) saw they couldn't bring gasoline directly from Venezuela, they said 'let's use this pategrillo as an ingredient to make these compounds.'"

Repairing damage to Cano Limon-Covenas caused by illicit valves - used to steal oil - and bombings by the left-wing ELN guerrillas cost 42 billion pesos, nearly $11 million, in 2020, said Cenit's vice-president of pipelines, Sandra Milena Orozco.

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