Fuel Theft in Ecuador: A Growing Crisis

By Alexandra Valencia

ESMERALDAS/SANTO DOMINGO, Ecuador (Reuters) – Organized crime groups in Ecuador are increasingly stealing fuel from state-run oil company Petroecuador to support drug trafficking operations, resulting in hundreds of millions in lost income for the country's top industry, as reported by the company and officials.

Criminals are stealing gasoline, diesel, and other fuels by tapping state-owned pipelines for cocaine production and drug transportation. They are launching more violent attacks on oil fields, stealing copper cables, extorting, and assaulting workers, according to the company and its union.

Petroecuador reported cumulative losses of $215.1 million from fuel theft during 2022, 2023, and through October 2024, noting that illegal taps surged from 32 in 2022 to 773 through October. This theft, although a fraction of the $7.5 billion national income from Petroecuador, raises concerns over the financial impact on public funds and the facilitation of drug trafficking.

Ecuador has 1,655 kilometers (1,030 miles) of state-controlled fuel pipelines running along the Pacific coast and through remote Amazon areas, where community protests against the oil industry are prevalent. During a late November visit, Reuters observed at least nine illegal taps within a 25-meter stretch of the Esmeraldas-Santo Domingo pipeline, one of eleven in the Andean nation.

This year alone, at least 136 taps were discovered on the pipeline, causing losses of around $17 million from this 166-kilometer (103-mile) section. Finding and removing these valves is a challenging and costly task, often risking fuel spills.

Increased Violence and Crime

Murders, drug trafficking, and gun smuggling are skyrocketing in Ecuador, attributed to local gangs linked to Mexican cartels and the Albanian mafia. This violence was underscored by the assassination of a presidential candidate and an armed gang's invasion of a television studio.

These attacks on the energy sector highlight the challenges facing President Daniel Noboa, who committed to improving security during his 2023 election campaign and faces re-election in February 2025. While his administration has intensified military protectiveness of oil installations through night patrols and drone monitoring, they have not responded to questions about fuel theft.

The Process of Fuel Theft

Police intelligence suggests that stolen fuel is being used to create precursor chemicals for cocaine production in neighboring Colombia, as well as to fuel high-speed boats for drug transport to Mexico and Central America via the Pacific. Lieutenant Colonel Hugo Amores, head of the police hydrocarbon crimes unit, emphasizes that legal reforms are essential to support law enforcement effectively.

Criminals typically dig around a meter to access buried pipelines, then tap into them with homemade valves connected to pressure hoses leading to illicit tanker trucks or storage facilities. Petroamazon technicians often improvise repairs, encasing tapped valves in metal cylinders, which takes several hours.

The police reported seizures of illegal storage pools for stolen gasoline and diesel, particularly in the Amazon region. The confiscated volume of stolen fuel has increased by over 77% in the past year, with illegal refineries producing vast amounts of gasoline for drug production found in provincial Sucumbios.

Conclusion

The systemic value of fuel theft is crucial for the profitability of criminal organizations in Ecuador. Challenges persist as extortion against Petroecuador workers and contractors also escalates, creating a climate of fear within the industry. Union leader Jipson Martinez highlighted the grievous state of vulnerability among workers, revealing how he was forced to leave his province after resisting extortion attempts.

"We are defenseless," Martinez stated.