MOSCOW (MRC) -- 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, said Hydrocarbonprocessing.
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.
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 km of pipelines -- and processing stolen crude at their own secret refineries. "Not even Petrobras knows exactly how much is being stolen," said Giniton Lages, the Rio police chief who led the investigation at Duque de Caxias. "It's a huge business, moving millions of reais."
While oil theft -- often with environmental damage from the accompanying spills -- is commonplace in regions like the Niger Delta of Nigeria, it has not traditionally been a problem in Brazil.
The thefts add to the steep challenges facing Petroleo Brasileiro SA, as the Rio-based firm is formally known. Amid weak oil prices, the company is scaling back under new CEO Pedro Parente and trying to emerge from a USD100 MM pile of debt.
For the past three years, the state-run company has been hit by a sprawling investigation into corruption and political kickbacks in its dealings with construction firms. Police suspect corruption in the oil thefts as well. The taps and pipes near the Duque de Caxias refinery were so precisely engineered that investigators concluded the thieves must have had help from inside Petrobras.
"They knew what type of fuel was inside each pipe and what was the ideal point to place a tap without the change of pressure in the tube raising the attention of the company's security system," Lages said.
Petrobras, whose production of about 2.8 MMbpd makes it one of the world's top 10 oil companies, said it was working with police to identify any employees or ex-employees that may have been involved in the crimes.
"In 2016, there was a startling increase in theft from our pipelines," said Rodrigo Spagnolo, head of pipeline maintenance at Transpetro, Petrobras' transport subsidiary. The company, however, said the robberies had no material impact on its earnings. Petrobras reported revenues of USD81 B last year.
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