Brazil's black market pipeline: Gangs hijack Petrobras' oil, fuel

Tue Apr 4, 2017 12:57pm EDT
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By Rodrigo Viga Gaier

RIO DE JANEIRO (Reuters) - In September, police investigating a wave of killings in the northern Rio de Janeiro suburbs followed a tip to the isolated scrubland near the massive Duque de Caxias oil refinery.

Police presumed the killings were linked to turf battles between criminal gangs in the run-up to municipal elections the following month.

They found a different explanation buried beneath the grass: a system of tubes to siphon fuel from underground pipelines leading from the refinery, owned by state-run oil company Petrobras (PETR4.SA: Quote).

Some of the killings, police said, were part of a power struggle between rival gangs earnings millions of dollars a year from stealing crude oil, diesel and gasoline and selling it on a thriving black market.

The discovery highlighted a fast-growing criminal enterprise in Brazil's oil heartland, between Rio de Janeiro and Sao Paulo. From just one recorded incident in 2014, the number of thefts and attempted thefts from Petrobras rose to 14 in 2015 - before jumping five-fold to 73 last year, the company told Reuters.

The racket is part of a larger crime wave in Brazil, and especially Rio, amid the country's worst recession on record.

Investigators believe the oil and fuel thefts were masterminded by the city's powerful militias - often made up of retired or off-duty cops - as they seek to move away from terror and violence to lower-profile crimes following a crackdown by authorities in recent years.

The thieves' methods range from hijacking tanker trucks to tapping the company's more than 11,000 kilometers of pipelines - and processing stolen crude at their own secret refineries.   Continued...

Brazil's state-run oil company Petrobras fuel tanks are seen in the Guanabara bay in Rio de Janeiro, Brazil March 13, 2017.  REUTERS/Pilar Olivares