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Tapping business

Date of publication: 11 April 2018 Printable version

Pipeline illegal tappings remain an unsolved issue for law enforcers and lawmakers.

The battle against illegal tappings into oil pipelines, clandestine refineries, counterfeit fuel has a very uneven front. We have analysed the statistics for individual regions and used examples to illustrate the process of stealing petroleum products. The existing law enforcement practice only stimulates fuel thefts in the regions, fuel market experts maintain.

Samara makes its first steps…

In 2017, on an early March morning, FSB Directorate employees exposed an illegal refinery at the premises of the Voskhod oil depot in the little town of Pokhvistnevo in Samara Region. The refinery was working without a license, breaching all the possible environmental standards. The process involved five 70-ton tanks, a 60-ton reactor, two 70-ton coolers and three tanks of 40 tons each, all merged into a single production cycle. The refinery was able to process up to 3,000 tons of oil monthly, Rostechnadzor (Federal Environmental, Industrial and Nuclear Supervision Service of Russia) evaluates.

What’s indicative, it was the illegal tapping into the Nizhnevartovsk – Kuibyshev oil pipeline that brought FSB employees to the refinery, not the illegal refinery itself.

From the tapping point a plastic offshoot of 2 km long was laid via other enterprises (!), to end at the Laguna MC oil depot. In this very location three oil tanks of 2,000 m3 each and a boiler truck with stolen oil were discovered. The oil found was valued at RUB 11 million. According to preliminary estimates, from the start of 2018, the malefactors stole and dispatched to the Samara, Orenburg and Saratov refineries more than 18,500 tons of oil valued at over RUB 400 million.

One cannot build and operate such a huge plant and business without a reliable cover. Recently, several cases have been recorded when fuel thieves were protected by high-ranked law enforcement officers. For example, in Leningrad Region a criminal grouping enjoyed the patronage of the Kirishi district police station head officer.

In Samara, the law enforcers also “overlooked” the illegal refinery. We are already used to this… A bit earlier, texts on petroleum products theft via illegal tappings of the Kambala gang mentioned employees of the Novokuibyshevsk City Internal Affairs Department (CIPD) in Samara Region nearly as the ones in charge. The sources cited Yury Aksenov, Head of the Novokuibyshevsk CIPD and Mikhail Novichkov, Head of the Criminal Investigation, among the law enforcers. As there is no court ruling, everybody should decide on their own whether to trust such sources, but for us the information was a wake-up call.

Governor Nikolay Merkushkin recognised that problem of the region when he was in office. “Petroleum products theft is a separate agenda item in our region. How could the problem arise when there is such an army of policemen? The problem would not exist unless the men in uniform covered the deeds or took part in them,” the former head acknowledged.

Fuel thefts up 59 times in Moscow Region

The crimes related to illegal tappings into oil trunk pipelines are regularly exposed throughout the country: in Moscow, Leningrad, Tula, Ryazan and other regions. The most outrageous situation has emerged in Moscow Region – over 10 years, the number of tappings in the region have gone up 59 times! It rose by nearly one third in Leningrad Region. The table below shows how the situation in the country has been changing over the past decade.

Rating of Russian regions, by number of illegal tappings into oil and petroleum product trunk pipelines


Source: Centre for Study of Regional Problems

The diagram from the table shows that the number of tappings in Samara Region has reduced. However, it seems that the “quality” has improved: the ties are stronger, and the scope of theft is bigger. Unidentified tappings are absent from such reports. In October 2017, a gang of 17 illegal tappers was detained in Krasnoarmeisky District of Samara Region. Legal action was taken based on the laws regarding theft, but everything turned out to be much more interesting…

On 9 October 2017, a few days prior to the detention Mr. Cherezov, the head of the gang, at a Samara café handed over to a regional police officer (acting within the scope of a sting operation) RUB 500,000 and promised a million in the near future. Besides, the man allegedly promised RUB 5 million more monthly if the policeman would turn the blind eye to oil theft by the gang, supposedly organized by Cherezov. As the law enforcers maintain, even a retired warrant officer was among those who prepared the tappings. The investigation is going on…

In Leningrad Region, which ranks 3rd in the rating, combating the bootleggers is ostentatiously instigated, then it quietly dies down, which is evident from the diagram and confirmed by facts. The number of tappings fell to 52 cases in 2017. Head of the Kirishi police mentioned in the beginning of the article was detained in the summer of 2017. It seems that he “protected” so many others. Once his “protection” was lost, thefts discontinued, or, more precisely, they lurked down. Unless those were incarcerated, Leningrad Region would have hit another record: the third year of stable growth in a row!

Stability is proper in Moscow Region – over the decade, the number of tappings went up 59 times. 59 times!

In Tula, two former law enforcers pulled their rank from January to November 2016 to regularly steal gasoline and diesel intended for refuelling staff vehicles in Tula. They were imprisoned for 3 years.

In Volgograd, a criminal group managed to steal fuel worth of RUB 11 million within six months! 12 members of the organised criminal group were sentenced to 10 years.

Diesel is sweeter than oil

Diesel has become most precious for fuel thieves once the petroleum product pipeline system has been developed. As of now, the malefactors tap into diesel pipelines 3.5 times oftener than into oil pipes (see the diagram).

Illegal tappings into pipelines of the Russian Federation

*МН (OTP) – number of tappings into oil trunk pipelines

МНПП (PPTP) – number of tappings into petroleum product trunk pipelines

Such demand is understandable: crude refining requires serious equipment, while diesel could be sold right away. The volume of counterfeit diesel makes at least 30-40 %, says Evgeny Arkusha, President of the Russian Fuel Union.

The most successful sales market for fuel thieves has taken shape in central Russia. Criminals steal from the Moscow Ring Petroleum Products Pipeline that brings three fuel types into the region (diesel, gasoline, and jet kerosene). This pipeline is very tempting in terms of illicit gain. One could earn from each product type, but the diesel pipe is particularly popular. This is where criminals have no qualms about disturbing graves, get into ice rivers in winter to lay down an offshoot from the tapping, acquire extremely expensive equipment.

Igor Yushkov, Lead Specialist of the National Analytical Security Foundation maintains: “…Modern characteristics of those tappings are that they are made using professional equipment, which is quite expensive, so it wouldn’t be lucrative for them just to make a tapping once and be caught. Those who deal in such activities presume they would be doing this for a long time, steal a lot and get huge gains. And the equipment would pay back”.

The stolen product is primarily sold at illegal modular-type gas stations. In terms of money, only regional yearly proceeds from such points reach about RUB 1 billion, experts evaluate.

Buying cheap stolen diesel is much easier. Ads of sale in Moscow and Moscow Region mushroom up. At the Avito website one could easily fine diesel at RUB 26-27 per litre, with delivery within the region. At legal gas stations the diesel price never goes below RUB 39 per litre.

Here’s a new trend on the stolen fuel market – tappings into jet kerosene pipes have become more frequent of late. It is not clear where else the jet kerosene could go apart from airports, but the police are “in the quest” so far…

“Humane” policy

Tappings into trunk pipelines started back in the 1990s. That period saw construction of scores of mini refineries intended for processing stolen and undocumented oil. The peak was spotted in 2005, when 1,132 illegal tappings into oil and petroleum product trunk pipelines were discovered in Russia (see the diagram).

Quantity of tappings made into TPs in Russia (2003-2017)

The situation endangered the fuel security of Russia and performance of export contracts. The management of oil transportation companies were forced to boost the spending on pipeline security and comprehensive inspection programmes.

The problem has exacerbated since then – mini refineries are no longer that profitable; petroleum products are more lucrative for fuel raiders. “Due to the existing law enforcement practices regarding illegal tappings, petroleum products have become more popular than oil,” – comments Ivan Barsumin, a FES expert. “2017 saw 62 and 227 tappings into oil and petroleum product pipelines, respectively. The criminals do not get any real punishment – the existing law enforcement practice only motivates the thieves. The situation will get aggravated unless a tough law is adopted,” Mr Barsumin concludes.

Let’s see the “humane” law enforcement policy towards fuel thieves in figures: just 1 illegal tapping was made in Moscow Region in 2007, and in 2017 the number reached 59. The number of criminal cases instigated on this article reduced in inverse proportion.

Let’s observe statistics: 139 fuel thefts have been recorded in Moscow Region over the past 3 years, with 87 criminal cases instigated on those episodes, with almost a third of that number (33) denied. Only 6 episodes have reached the court, of which 5 were considered, and criminals received punishment in 4 cases.

Those single cases provide punishment only for ordinary performers, who actually get symbolic sentences. The entire chain from performers to customers and patrons remains undisclosed.

3% probability to get behind the bars

The deplorable statistics we have seen proves that the law enforcement agencies seldom carry through the pursuit of fuel thieves. Whether affiliation or helplessness is the reason is not yet clear. In their turn, experts believe expanding the authorities of companies’ pipeline security divisions will solve the problem.

A bill of criminal liability for unauthorised tapping into pipelines has been submitted into the State Duma. The Duma Committee on Energy maintains the bill must be supplemented with a provision on reimbursing the cost of eliminating illegal tapping and its consequences to the pipeline owner by the guilty party, since decontamination of soil and water from spilled fuel sometimes requires many days of work by tens of people and vehicles. Statistics shows that each 10th tapping results in a spill.

In March 2015, some 200 litres spilled into the soil in Ufa because of an illegal tapping into the Salavat – Ufa petroleum product pipeline. The Federal Service for Supervision of Natural Resource Usage (Rosprirodnadzor) then evaluated the environmental damage at a total of RUB 28 million and demanded the money from the company operating the pipeline. There are hundreds of similar cases… Even if criminals are caught, they do not necessarily have the money. A pipeline operator is quite different – it has the money and doesn’t need to be caught.

The criminal business of oil thieves is a sound chain whose links are easily shifted and replaced. If a dirty-handed person in a sports hoodie who drains the stolen product is caught today, another one will take his place tomorrow. Ordinary criminals are akin to consumables for tapping masterminds.

Legislative proposals are yet in the bill. In real life the fuel kingpins face the 3 % probability to get behind the bars, which makes their occupation as good as safe.

«Nasha Versiya»
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