With the exception of the outbreak of bird flu in 2009, Mexico has not been regularly flagged as a potentially-dangerous working environment.
However, as the popular holiday destination is of strategic importance for the UK oil & gas supply chain, there are significant numbers of north-east Scottish companies deploying personnel and assets to Mexico.
While the security challenges may not be as high profile as those in, for example, Nigeria, they require consideration and there are certain measures which can be taken to mitigate against them.
Did you know that Mexico is one of the world’s hotspots for express kidnapping (an attempt to obtain cash quickly in exchange for the release of an individual)?
Indeed, the security situation in Mexico has been deteriorating consistently since the outset of President Calderon’s war on drugs in 2006. The surge of troops across all parts of the country has provoked a confrontation with powerful drug cartels that has forced groups to diversify their sources of income.
As one of the most abundant and valuable of the resources readily available in Mexico, oil has naturally become a target for these gangs, which seek to steal or extort it in order to sell on the black market.
The incidence of crime relating to oil and liquified gas theft has grown almost exponentially since 2004, with the number of illegal pipeline taps having more than quadrupled by 2009, from 102 to 462, according to state petroleum company Pemex, and the number of kidnaps and murders increasing correspondingly.
About one quarter of Mexico’s annual energy generation comes from the Burgos Basin in Tamaulipas state, around the north-western border region.
This part of Mexico has been effectively taken over by the Los Zetas cartel in recent years – a ruthless group of former special forces operatives that is currently embroiled in an ongoing territorial struggle with rival cartels, making it among the most dangerous places in the country.
Pemex is finding it increasingly difficult to operate in the constantly deteriorating security environment, not least because, as the principal operator, it has borne the brunt of the cartels’ campaign of violence.
The main ways in which cartels target the oil sector is through attacks on installations and personnel. Attacks on installations tend to consist of illegal tapping of pipelines, with occasional demonstrations of force outside main sites.
One such event occurred in May last year, at the Gigante Uno plant, near Nueva Ciudad Guerrero in Tamaulipas state, when five workers were kidnapped just before entering the site to begin their shifts. They have not been heard of since.
The increase in oil & gas theft is driven by the demand on the black market for fuel products, which is growing all the time.
At least two firms, Trammo Petroleum and the American arm of BASF, were indicted in Mexico in 2009, for buying stolen oil illegally – a move which cost Pemex up to $2million in two months alone.
Pemex has reported losing up to $1billion a year in stolen condensate, with that figure set only to increase.
The attacks on personnel represent a much more serious threat to operational efficiency and business confidence in the longer term. Around 30 people from the sector have been reported kidnapped in the past few years, although the true figure is likely to be much higher than this. Although lower-level Pemex employees continue to be the worst affected by the cartel, foreign visitors and managers have also been targeted by gangs.
These abductions aim to coerce individuals into complying with a groups’ demands, punish them for not doing so, or extort a ransom.
The cartels’ attempts to co-opt workers seem to be relatively successful: in 2007, the Mexican authorities arrested 38 Pemex employees suspected of aiding Los Zetas in their oil theft operations.
In practice, however, this means there is a greater risk to lower-level employees in the field as they are less likely to be kept alive for ransom, whereas managers such as Nestor Martinez, kidnapped in May 2010, are often released after the payment of a considerable – although often unknown – sum of money.
Whilst it is clear in this context that the murder of Weatherford businessman Francisco Alberto Ruiz was an exception rather than the rule, in all likelihood motivated by something other than his position in the energy sector, his death is indicative of the deteriorating security environment and the threat posed to all business personnel in the field.
These conditions have already begun affecting Mexico’s oil & gas output. Such losses are unsustainable when combined with the losses incurred by ongoing sabotage on the part of some employees, declining investor confidence and the fact that money needed for reinvestment in Mexico’s struggling infrastructure is being spent on immediate security needs rather than long-term development.
Yet Mexico is still the seventh largest oil producer in the world, and such a small decline in output efficiency is unlikely to have any serious impact on the state’s fulfilment of contractual obligations to other countries. Given the current situation, however, it may not be long before Pemex feels itself being squeezed.
Operational personnel in Mexico and those tasked with their deployment should consider the potential challenges the environment can present. Have they had/provided a region-specific security briefing and training in travel safety awareness? Are measures in place to evacuate personnel from country should the worst happen?
All such measures require consideration in the light of duty of care responsibility, and can be incorporated into wider pre-deployment and crisis management planning.
For a copy of AKE’s latest country intelligence and security information on Mexico, e-mail claire.fleming@akegroup.com
Taryn Evans is an intelligence analyst at AKE