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Inefficiency at Pemex allowed thieves to tap pipelines undetected. Inefficiency at Pemex allowed thieves to tap pipelines undetected.

Audit slams Pemex for inefficient pipeline monitoring, maintenance and protection

Sloppy management of pressure monitoring system facilitated the theft of fuel

Pemex failed to effectively maintain, monitor and protect the system which detects pressure drops in its petroleum pipelines thus creating a situation conducive to fuel theft, according to the federal auditor.

The Federal Auditor’s Office (ASF) also said in a new audit report that the logistics division of the state oil company didn’t install the system in all of the sections of the pipeline network where it was intended to be installed, further facilitating the theft of fuel, a crime that has cost Mexico billions of dollars in recent years.

“It can be concluded that the lack of maintenance, repairs, controls, regulations, physical security and monitoring of the Supervision, Control and Data Acquisition (SCADA) system as well as the failure to complete the installation [of the system] . . . created a favorable atmosphere for the increase in the number of illegal taps,” the ASF said.

There were 14,894 such taps detected on pipelines last year and 10,923 in 2017 – the year examined in the newly-released audit.

The ASF report, based on its 2017 public accounts audit, also detected shortcomings in the process that Pemex used to select locations for the installation of the SCADA system, stating that priority and strategic sections of the pipeline network were not initially identified.

The oversight resulted in Pemex having to pay out an additional US $79.6 million to have the system installed at more locations.

However, Pemex Logistics failed to install the system at 98 locations for which it was paid, the ASF said, pointing out that Pemex itself did not seek the return of advance payments totaling over US $11.2 million.

Of a total of 379 locations chosen, 170 are not monitored by the SCADA system for a range of reasons.

Another 40 sites where the system was installed at a cost of more than US $18.1 million were sabotaged and the equipment hasn’t been fixed, the ASF said, adding that Pemex Logistics has no plan to carry out the repairs that are needed.

“Consequently, there is no effective monitoring of the fuel transportation network . . . .” the audit report said.

In addition, the ASF said there are no procedures in place to maintain and update the SCADA system in a timely manner and at six locations visited by auditors there were not even minimal security measures in place to protect it.

Finally, when pressure drops are detected in the pipelines, the main control center that monitors the SCADA system doesn’t have formal protocols in place to report them.

Pemex, the world’s most indebted oil company, lost 60 billion pesos (US $3.1 billion) last year due to fuel theft, President López Obrador said in December.

However, he announced yesterday that the quantity of fuel stolen on a daily basis has been slashed since the government’s anti-fuel theft strategy was introduced.

Source: El Economista (sp) 

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