Texas- Downturn brings spike in oilfield crime

The crew from Liberty Fishing and Rental Tools returned to a well near Snyder last week and noticed they’d been hit.

The tires had been stolen off a trailer they use to for their work freeing equipment stuck in a wellbore.

President and co-owner Monnie Sparkman said the tires would cost about $1,500 to replace — “not that big of a deal,” he said, but the theft would leave the trailer stuck in place and force employees to spend the time driving out to the lease, jacking up the truck and installing new tires.

It’s the sort of thing Sparkman has seen before through his decades working in the Permian Basin oil patch. And it’s a phenomenon, oilfield theft, that tends to become more common during the lulls of oil and gas cycles.

That’s the situation today, with the regional Plains-West Texas Intermediate posting hovering below $40 per barrel, less than half the price at this time last year.

“When you have a slowdown, people start stealing your equipment for a lot of different reasons,” Sparkman said. “People think they can steal something and make them some money when they don’t have money.”

Quantifying an increase in oilfield crime can prove difficult, even though law enforcement data show felony crime historically spikes in the region in times when oilfield activity declines, like it did in Odessa during the recession of 2008 and 2009.

Already, for example, the Odessa Police Department reported a nearly 17 percent increase in felony crimes during the first six months of the year compared to the same period of 2014.

But the FBI office in Midland does not break down statistics of crime that happens in the oil patch, said Troy Murdock, the senior supervisory resident agent with the

bureau who also heads the Permian Basin Oilfield Theft Task Force. The task force investigates oilfield crimes and refers cases to federal or state courts for prosecution.

Murdock said that on his end, he’s seen no wave of thefts.

“I’m not seeing a lot of reports to us of that,” Murdock said. “What we are starting to see with a little bit of the slowdown, some of the companies are able to balance their books and are able to identify overbilling, where companies have maybe double or triple billed for services.”

Ector District Attorney Bobby Bland, who has warned of an unprecedented level of felony cases this year, also said he does not track oilfield cases separately. Anecdotally, Bland said the most noticeable increases in crime since the downturn involve drugs and violence that sometimes relate to job losses.

“It’s still an issue obviously, but it seems like at the beginning of the boom that was a bigger concern, and it seemed to be more rampant,” Bland said, adding later that “a lot of the oilfield thefts were done by employees, people that had access to it, not just breaking and entering. That doesn’t mean it’s not going on. That’s just part of it.”

An increase in oilfield theft, wrought by desperation or increased opportunity, does make intuitive sense, Ector County Sheriff Mark Donaldson said.

“When things are booming, there’s lots of stuff to be stolen and be sold because everybody is using stuff,” Donaldson said. “Now things have slowed down, there’s a lot more stuff sitting out in yards that’s easier to get to.”

Indeed, some oil companies keep data that shows a spike in crime in the oil patch, such as Apache Corporation, one of the most prolific operators in the Permian Basin.

Apache’s internal tracking, provided by the company’s Permian Basin security advisor Jess Malone, shows a spike in “security incidents” during the 2008/2009 recession of about 10 incidents, following a plateau during the boom years and then, since the price slide beginning last year, another spike.

“Security incidents” can include problems like discovery of weapons on a lease, which are prohibited, or vandalism. But they also include crimes like burglaries of employee vehicles and copper, or even oil theft.

So far this year, Apache reports 19 incidents.

The most recent was a theft of copper in Winkler County discovered by an Apache electrician on July 27.

“What we are seeing is a lot of small thefts, more so than usual” said Malone, a retired Texas Ranger. “And it’s typical in a downturn when you have people who have lost their jobs and stuff, they are going to result to criminal means to try to get their money.”

Many thefts seem random, and “it’s pretty much spread across the Permian Basin,” Malone said.

Stolen items include copper wire — taken repeatedly during the last month from a yard in Odessa. Additionally, at other sites, welders, trailers, generators and batteries turned up missing.

Some are caught on surveillance cameras. Apache is also considering placing brand logos on batteries to deter would-be thieves, Malone said.

Malone at Apache tracks every crime reported to the company by employees or contractors. The company crimes to law enforcement. Malone also investigates internally.

Contractors, especially during the boom, might be reluctant to report thefts for fear of slowing down work or because they don’t think the property will ever be recovered, Malone said. But reporting the crimes helps catch repeat-offenders.

“When we eventually catch these guys six months from now, or five years from now, if there’s not a report — even if we get a confession out of them — it can be difficult to prosecute,” Malone said.

As a smaller operator, Sparkman said in his case, reporting the tire theft didn’t seem to make sense because the prospect of recovery seemed dim. These sorts of things, Sparkman said, just seem like another frustrating reality that comes with a drop in oil price.

“Tires, you aren’t going to be able to trace tires,” Sparkman said. “It’s just one of those that you eat.”

Source: OA Online