Mexico Violence Costs $350K Daily in Natural Gas Losses

Threats and violence by drug gangs are preventing some government oil workers from reaching installations in northern Mexico and costing state-owned Petroleos Mexicanos (Pemex) about $350,000 every day in lost production, a company official said November 11. The official said Pemex has shut down the equivalent of about 100 million cubic feet of natural gas production per day. That amounts to about $10.5 million per month, or about 2.3 percent of Mexico’s $450 million per month average in monthly natural gas revenues. The lost production is centered in the Burgos gas field near the east Texas border in an area where drug gangs have threatened and kidnapped Pemex workers at some of the company’s installations. The official said that earlier in the year, when the security problems were most acute, gas production was down twice as much — about 200 million cubic feet per day. The problem came to a head in May 2010, when five workers at a gas compression plant were abducted by armed men. The father of one of the victims has said the workers were warned to stay away, and the kidnapped men have not been heard from since. However, army troops are now helping Pemex provide increased security. “This has allowed us to start partially recovering the production we had stopped for this reason,” the Pemex exploration and production division chief told local media.