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Third Generation Gangs Strategic Note No. 20: Fuel Theft in Brazil—Gangs and Militias Target Petrobras

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Third Generation Gangs Strategic Note No. 20: Fuel Theft in Brazil—Gangs and Militias Target Petrobras

John P. Sullivan, José de Arimatéia da Cruz and Robert J. Bunker 

Brazil’s state-run oil company, Petroleo Brasileiro SA (Petrobras) has been increasingly targeted from 2014 onwards by fuel thieves (ladrões de combustível). The gangs (gangues) involved include the Primeiro Comando da Capital (PCC or First Capital Command) and milícias (militias). A similar pattern of large-scale petroleum theft has been taking place in Mexico since at least 2006.

1

Petrobras Production Facility.[1]

Key Information: Gram Slattery and Marta Nogueira, “Brazil’s Petrobras confronts new foe: fuel thieves.” Reuters. 20 September 2019, https://www.reuters.com/article/us-brazil-oil-crime-focus/brazils-petrobras-confronts-new-foe-fuel-thieves-idUSKBN1W5114:

Theft from Petrobras pipelines soared to a record high 261 incidents in the states of Rio de Janeiro and Sao Paulo last year, up from just one case in 2014, according to an August securities filing and statements made to Reuters by representatives of Petroleo Brasileiro SA (PETR4.SA), as the company is formally known.

Most of those heists, police say, are the work of sophisticated criminal groups, some with their own trucks, distribution firms and even retail gas stations…

Crime costs Petrobras’ distribution subsidiary, Petrobras Transporte SA, or Transpetro, over 150 million reais ($37 million) per year…

Transpetro has set up a program to gather intelligence on criminal groups and is spending 100 million reais ($24 million) a year to fund it, according a high-ranking company source, who requested anonymity to avoid retaliation from organized crime groups.

Around 50 staffers are now studying the issue, including tracking the patterns and methods of oil thieves and sharing those findings with law enforcement, the person said. The company, which did not respond to a request for comment, has also set up a hotline for the public to report fuel robbery…

First Capital Command [the Primeiro Comando da Capital or PCC], one of Brazil’s most notorious crime gangs, controls around 300 gas stations in Sao Paulo state, according to Paulo Miranda, head of the gas station industry group Fecombustiveis. That comes to around 3% of the state’s approximately 9,000 gas stations.

Key Information: “Petrobras se articula para enfrentar novo inimigo: ladrões de combustível.” [Petrobras prepared to confront a new enemy: fuel thieves] Portal Lubes. 20 September 2019, http://portallubes.com.br/2019/09/petrobras-se-articula-para-enfrentar-novo-inimigo-ladroes-de-combustivel/:

Os casos que miram oleodutos da Petrobras subiram para um recorde de 261 nos Estados do Rio de Janeiro e São Paulo no ano passado, contra apenas um caso em 2014…

A maioria desses assaltos, segundo a polícia, é obra de sofisticados grupos criminosos, alguns com caminhões próprios, empresas de distribuição e até postos de gasolina no varejo.

Translation: “Cases targeting Petrobras pipelines rose to a record 261 in the states of Rio de Janeiro and São Paulo last year, compared with just one case in 2014…

Most of these robberies, according to police, are the work of sophisticated criminal groups, some with their own trucks, distribution companies and even retail gas stations.”

Key Information: Rafael Ihara, “Polícia descobre quadrilha que planejava furtar produto derivado do petróleo na Zona Leste de SP [São Paulo].” [Police discovered gang that planned to steal fuel products from the East Zone of SP] G1: Globo. 28 August 2019, https://g1.globo.com/sp/sao-paulo/noticia/2019/08/28/policia-descobre-quadrilha-que-planejava-furtar-produto-derivado-do-petroleo-na-zona-leste-de-sp.ghtml;

A Polícia Civil descobriu uma quadrilha que planejava furtar nafta na noite desta terça-feira (27), na Avenida Sapopemba, na Zona Leste de São Paulo.

De acordo com a polícia, os criminosos construíram um túnel dentro de um imóvel alugado, que fica próximo do Hospital Sapopemba, para tentar chegar aos dutos da Transpetro, uma empresa subsidiária da Petrobras, e furtar o composto. Considerada a parte nobre do petróleo, a nafta é um composto químico utilizado pela indústria petroquímica.

Translation: “Civil Police discovered a gang that planned to steal naphtha on Tuesday night (27)[August], on Sapopemba Avenue, in the East Zone of São Paulo.

According to police, the criminals built a tunnel inside a rented property near Sapopemba Hospital to try to reach the pipelines of Transpetro, a subsidiary of Petrobras, and steal the compound. Considered the noble part of petroleum, naphtha is a chemical compound used by the petrochemical industry.”

Key Information: Henrique Coelho, “Municípios do RJ tiveram 187 perfurações de dutos de combustível em sete anos.” [Rio de Janeiro’s municipalities registered 187 perforations of fuel ducts in seven months] G1: Globo. 2 August 2018, https://g1.globo.com/rj/rio-de-janeiro/noticia/2018/08/02/municipios-do-rj-tiveram-187-perfuracoes-de-dutos-de-combustivel-em-sete-anos.ghtml:

Mapa revela extensão da atuação de quadrilhas. Segundo investigações, há indícios de participação de milícias e de facilitação de agentes públicos para a prática do crime. [This article contains a map demonstrating the extent of gang activity, including evidence of militia and public officials in the commission of these crimes.]

Centro de uma operação da Polícia Civil e do Ministério Público nesta quinta-feira (2), o Rio de Janeiro sofre com a derivação clandestina de combustível. O G1 apurou que a Petrobras identificou 187 perfurações irregulares de dutos de combustível entre 2011 e 2018…

Milícias, morte e petróleo

Em maio de 2018, quatro homens foram presos pelo duplo homicídio dos irmãos Ivan e Ivo Veiga do Nascimento. Os dois foram mortos em abril de 2017 após um tiroteio dentro de um bar. Na briga, um deles foi atropelado, e os assassinos aproveitaram para dar os tiros de misericórdia.

Tanto as vítimas quanto os autores … eram participantes de uma milícia do bairro de Vila Urussaí, em Caxias, que fazia a extração ilegal de combustível nos dutos da Reduc.

Translation: “The Civil Police and the Public Prosecution Service operations center reported on Thursday (2) [August], that Rio de Janeiro suffers from clandestine fuel extraction.  G1 [Globo] found that Petrobras identified 187 irregular taps of fuel pipelines between 2011 and 2018.”

Militias, Death and Oil

In May 2018, four men were arrested for the double murder of brothers Ivan and Ivo Veiga do Nascimento. The two were killed in April 2017 after a shooting in a bar. In the fight, one of them was run over, and the killers took the opportunity to fire the shots of mercy.

Both the victims and the perpetrators … were members of a militia in the Vila Urussaí neighborhood of Caxias, which was illegally extracting fuel from the Reduc pipelines.”

Third Generation Gang Analysis

Fuel theft is becoming recognized as a significant organized crime activity. In Mexico, both cartels (e.g., the Cártel del Golfo and Los Zelas) and other criminal gangs known as huachicoleros (such as the Cártel Santa Rosa de Lima or CSRL) are notorious for their illicit/clandestine taps on fuel or hydrocarbon infrastructure.[2] Fuel theft poses operational concerns and hazards (such as explosions) in addition to its economic impact and nexus with corruption.[3] Fuel theft by criminal groups is targeted across the petroleum production, processing, and distribution infrastructure:

            • Crude storage and transport, 

            • Refineries,

            • Distribution pipelines; predominately surface but now also including      

               subterranean pipeline taps,

            • Fuel trucks,

            • Gasoline/Petrol stations.

The fuel stolen (both crude and processed) is typically sold at a discount to illicit businesses but may also be distributed for point-of-sale purposes to a multitude of individual consumers. Though the processing of stolen crude at gang-owned refineries and/or sales of refined petroleum at gang-owned gasoline stations is not unheard of for profit maximizing purposes.     

The illicit fuel trade is now increasingly recognized as being a significant issue in Brazil.[4] In 2017, Brazilian police found that a series of murders near the Duque de Caxias oil refinery in Rio de Janeiro’s Guanabara Bay were linked to a power struggle between rival gangs seeking to extract fuel from the refinery’s pipelines.[5] The lucrative hydrocarbons trade grew from one recorded incident in 2014 to 73 incidents in 2016.[6]  Militias and corrupt oil company employees and public officials join favela (shantytown) gangs—like the PCC which operates its own service stations—to ‘fuel’ the clandestine hydrocarbon trade:

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.[7]

The fuel thieves steal oil from refineries and pipelines to process it in their own clandestine refineries and then sell the bootleg product to illicit service stations.[8] By June 2019, the cost of fuel theft directed against Petrobras oil and gas pipelines topped 150 million reais (US $38.9 million).[9] This figure, however, represents a drop in the bucket compared to fuel thefts directed at PEMEX estimated to be 30 billion pesos (US $1.6 billion) a year in 2018.[10] This suggests the situation in Brazil has the potential to proliferate in the future given Mexico’s eight year head start with this large scale illicit economic activity.       

The participation the milícias raises the specter of corruption since they have strong connections to the state. They evolved for citizen-led vigilante groups to become powerful mafias in their own right. The state-militia nexus amplifies criminal competition for control yielding a hybrid form of criminal-political violence.[11] 

Sources

Rafael Ihara, “Polícia descobre quadrilha que planejava furtar produto derivado do petróleo na Zona Leste de SP [São Paulo].” G1: Globo. 28 August 2019, https://g1.globo.com/sp/sao-paulo/noticia/2019/08/28/policia-descobre-quadrilha-que-planejava-furtar-produto-derivado-do-petroleo-na-zona-leste-de-sp.ghtml.

“Petrobras se articula para enfrentar novo inimigo: ladrões de combustível.” Portal Lubes. 20 September 2019, http://portallubes.com.br/2019/09/petrobras-se-articula-para-enfrentar-novo-inimigo-ladroes-de-combustivel/.

“Polícia descobre quadrilha que planejava furtar produto derivado do petróleo na Zona Leste de SP [São Paulo].” G1: Globo. 28 August 2019, https://g1.globo.com/sp/sao-paulo/noticia/2019/08/28/policia-descobre-quadrilha-que-planejava-furtar-produto-derivado-do-petroleo-na-zona-leste-de-sp.ghtml.

Rodrigo Viga Gaier, “Brazil’s black market pipeline: Gangs hijack Petrobras’ oil, fuel.” Reuters. 3 April 2017, https://www.reuters.com/article/us-brazil-petrobras-theft/brazils-black-market-pipeline-gangs-hijack-petrobras-oil-fuel-idUSKBN1760C7.

Gram Slattery and Marta Nogueira, “Brazil’s Petrobras confronts new foe: fuel thieves.” Reuters. 20 September 2019, https://www.reuters.com/article/us-brazil-oil-crime-focus/brazils-petrobras-confronts-new-foe-fuel-thieves-idUSKBN1W5114.

End Notes

[1] Reproduced under Creative Commons Attribution 2.0 Generic License (CC BY 2.0). Wikimedia Commons,   https://commons.wikimedia.org/wiki/File:Porto_do_Mucuripe_-_Fortaleza-CE.jpg.

[2] See John P. Sullivan and Adam Elkus, “Open Veins of Mexico: The Strategic Logic of Cartel Resource Extraction and Petro-Targeting.” Small Wars Journal. 3 November 2011, https://smallwarsjournal.com/jrnl/art/open-veins-mexico; Eduardo Salcedo-Albarán and Luis Jorge Garay Salamanca, “Structure of a Transnational Criminal Network: “Los Zetas” and the Smuggling of Hydrocarbons.” Vortex Working Paper No. 12. 17 June 2014, https://docs.wixstatic.com/ugd/f53019_b8156d42310843a1b9dbcce4095c51b8.pdf; and  John P. Sullivan and Robert J. Bunker, “Mexican Cartel Tactical Note #41: Cártel Santa Rosa de Lima (CSRL) Logo and Symbols Identification.” Small Wars Journal. 3 April 2019, https://smallwarsjournal.com/index.php/jrnl/art/mexican-cartel-tactical-note-41-cartel-santa-rosa-de-lima-csrl-logo-and-symbols.

[3] John P. Sullivan and Robert J. Bunker, “Mexican Cartel Tactical Note #40: Cártel Santa Rosa de Lima (CSRL) Tunnels in Guanajuato Highlights Tactical Considerations in Underground Operations.” Small Wars Journal. 22 March 2019, https://smallwarsjournal.com/index.php/jrnl/art/mexican-cartel-tactical-note-40-cartel-santa-rosa-de-lima-csrl-tunnels-guanajuato.

[4] Parker Asmann, “Brazil Crime Groups Expanding Oil Theft Operations,” InSight Crime. 5 April 2017, https://www.insightcrime.org/news/brief/brazilian-crime-groups-expanding-oil-theft-operations/.

[5] Rodrigo Viga Gaier, “Brazil’s black market pipeline: Gangs hijack Petrobras’ oil, fuel.” Reuters. 3 April 2017, https://www.reuters.com/article/us-brazil-petrobras-theft/brazils-black-market-pipeline-gangs-hijack-petrobras-oil-fuel-idUSKBN1760C7.

[6] Ibid.

[7] Ibid.

[8] Ibid.

[9] “Brazil's Petrobras says fuel theft costs exceed $39 million.” Reuters. 7 June 2019, https://www.reuters.com/article/petrobras-fuel-theft/brazils-petrobras-says-fuel-theft-costs-exceed-39-million-idUSE6N21G02Q.

[10] “Fuel theft costs Pemex 30 billion pesos a year.” Mexico News Daily. 11 April 2018, https://mexiconewsdaily.com/news/fuel-theft-costs-pemex-30-billion-pesos-a-year/.

[11] “Mafias run by rogue police officers are terrorising Rio.” The Economist. 30 May 2019, https://www.economist.com/the-americas/2019/05/30/mafias-run-by-rogue-police-officers-are-terrorising-rio; Antônio Sampaio, “Urban security: when gangs and militias run the streets.” IISS Blog. 16 October 2018, https://www.iiss.org/blogs/analysis/2018/10/urban-security-gangs-militias-streets; and Antônio Sampaio, “The role of power for non-state armed groups in cities.” IISS Blog. 4 October 2019, https://www.iiss.org/blogs/analysis/2019/10/csdp-non-state-armed-groups.

Key Words: clandestine taps, fuel theft, gangues (gangs), huachicoleros, ladrões de combustível, milícias (militias), Petroleo Brasileiro SA (Petrobras)

Additional Reading 

Christian Vianna de Azevedo, “Criminal Insurgency in Brazil: The Case of Rio de Janeiro: Context, Confrontation Issues and Implications for Brazilian Public Security.” Small Wars Journal, 22 January 2018.

John P. Sullivan and Adam Elkus, “Open Veins of Mexico:  The Strategic Logic of Cartel Resource Extraction and Petro-Targeting.” Small Wars Journal, 3 November 2011.

 John P. Sullivan, Robert J. Bunker and José de Arimatéia da Cruz, “Third Generation Gangs Strategic Note No. 12: Brazilian Prison Gangs Attack Civil Infrastructure in Fortaleza and Other Cities in Ceará State.” Small Wars Journal, 17 January 2019.

Categories: El Centro

About the Author(s)

John P. Sullivan was a career police officer. He retired as a lieutenant with the Los Angeles County Sheriff’s Department. He is also an adjunct researcher at the Vortex Foundation in Bogotá, Colombia; a member of the Scientific Advisory Committee of the Global Observatory of Transnational Criminal Networks; a senior research fellow at the Center for Advanced Studies on Terrorism (CAST); a Global Fellow at Stratfor (2018); and an instructor at the Safe Communities Institute at the Sol Price School of Public Policy at the University of Southern California. He is co-editor of Blood and Concrete: 21st Century Conflict in Urban Centers and Megacities (Xlibris, 2019), Countering Terrorism and WMD: Creating a Global Counter-Terrorism Network (Routledge, 2006) and Global Biosecurity: Threats and Responses (Routledge, 2010) and co-author of Mexico’s Criminal Insurgency: A Small Wars Journal-El Centro Anthology (iUniverse, 2011), Studies in Gangs and Cartels (Routledge, 2013), and The Rise of The Narcostate (Mafia States) (Xlibris, 2018). He completed the CREATE Executive Program in Counter-Terrorism at the University of Southern California and holds a Bachelor of Arts in Government from the College of William and Mary, a Master of Arts in Urban Affairs and Policy Analysis from the New School for Social Research, and a PhD from the Open University of Catalonia (Universitat Oberta de Catalunya) in Barcelona. His doctoral thesis was “Mexico’s Drug War: Cartels, Gangs, Sovereignty and the Network State.” His current research focus is the impact of transnational organized crime on sovereignty in Mexico and other countries.

Dr. José de Arimatéia da Cruz is a Professor of International Relations and International Studies at Georgia Southern University, Savannah, GA. He also is an Adjunct Research Professor at the U.S. Army War College, Strategic Studies Institute, Carlisle, PA, and a Research Fellow of the Brazil Research Unit at the Council on Hemispheric Affairs in Washington, DC.

Dr. Robert J. Bunker is an Adjunct Research Professor, Strategic Studies Institute, US Army War College and Adjunct Faculty, Division of Politics and Economics, Claremont Graduate University. He holds university degrees in political science, government, social science, anthropology-geography, behavioral science, and history and has undertaken hundreds of hours of counterterrorism training. Past professional associations include Distinguished Visiting Professor and Minerva Chair at the Strategic Studies Institute, U.S. Army War College; Futurist in Residence, Training and Development Division, Behavioral Science Unit, Federal Bureau of Investigation Academy, Quantico, VA; Staff Member (Consultant), Counter-OPFOR Program, National Law Enforcement and Corrections Technology Center-West; and Adjunct Faculty, National Security Studies M.A. Program and Political Science Department, California State University, San Bernardino, CA. Dr. Bunker has hundreds of publications including Studies in Gangs and Cartels, with John Sullivan (Routledge, 2013),  Red Teams and Counterterrorism Training, with Stephen Sloan (University of Oklahoma, 2011), and edited works, including Global Criminal and Sovereign Free Economies and the Demise of the Western Democracies: Dark Renaissance (Routledge, 2014), co-edited with Pamela Ligouri Bunker; Criminal Insurgencies in Mexico and the Americas: The Gangs and Cartels Wage War (Routledge, 2012); Narcos Over the Border: Gangs, Cartels and Mercenaries (Routledge, 2011); Criminal-States and Criminal-Soldiers (Routledge, 2008); Networks, Terrorism and Global Insurgency (Routledge, 2005); and Non-State Threats and Future Wars (Routledge, 2002).