For many years, the oilfield business has boomed and prospered. The increased use and need of petroleum products has created a lot of work for oilfield companies and their employees. As prices have continually increased, oilfields prospered even further and created many jobs for people in and around production areas. However, with the recent fall in oil prices, oilfield production has decreased resulting in lay-offs and downtime for these companies and their vendors.
All of this has caused a considerable decrease in profits for successful and well run businesses, as well as a massive increase in oilfield theft.
Is Oilfield Theft a New Problem?
No, this problem has been a regular occurrence throughout the existence of oilfields. It has been noted that oilfields are subject to regular theft during operations. However, much of this theft goes unnoticed by business owners due to high production and high costs associated with such production. Usually, these thefts are small and limited to things such as wiring and tubing. While business is booming, owners are not watching the bottom line as closely, and often miss these smaller thefts.
In addition, off-peak seasons and downtime due to weather or other issues, have seen an increase in theft. Often, there is very little security able to watch the entire area. This can leave the oilfield vulnerable to theft and vandalism. However, due to lower production, this downtime has increased. This can leave an oilfield empty for long periods of time. This can make it an ideal location for criminal activity.
What is the Cause of the Increase in Theft?
Some of the increase in oilfield theft rates can be attributed to more careful bookkeeping. As the cost of oil decreases, profit margins have dropped for many oilfield owners. Since profit margins are lower, business owners are paying more attention to their costs. When more items are being purchased than are needed or used for a job, it is noticed more quickly when every penny counts. This causes owners to notice even small thefts more quickly.
Oilfield productivity has slowed a lot due to price decreases. This has led to many lay-offs and more downtime. This leaves the oilfields without as many people watching it as it normally did. An empty area outside of town easily becomes a prime target for theft and vandalism. Since there is a lot of time left without any type of security, more expensive and larger equipment has been stolen. This has created massive losses for many business owners. Recently an oilfield service company in San Angelo, Texas had a total of four work trucks stolen from their facility. It is estimated the replacement cost of these vehicles could be a quarter of a million dollars and up, dependent on the level of customization and accessories the trucks were originally equipped with.
Four work trucks similar to this one were stolen from a company in Texas. The value of these trucks is estimated to be more than a quarter of a million dollars. Photo provided courtesy of jomacltd.com.
Although many business owners have insured themselves against this type of loss, the value of the equipment itself isn’t the only toll taken on already struggling entities. The time spent by owners in the investigation and possible prosecution of these thefts is not a recoverable asset. Also the loss of the equipment leaves a business without a resource it previously depended on.
What Is Being Done To Solve the Problem?
The AESC (Association of Energy Service Companies) has created a new website to aid in the prevention of oilfield theft, StopOilfieldTheft.com. The mission of the organization is to raise awareness and help organize the private sector so that a database of thefts can be created to monitor trends and patterns in the crimes. Regional task forces are also being created to investigate trends and patterns in thefts and potential recoveries.
Who is Stealing from Oilfields?
As task forces are implemented and becoming organized, more arrests have been made. This has helped shed light on the persons responsible for thefts and their motivations. A significant amount of this theft can be attributed to drug abuse. The valuable materials in oilfields are easily accessible and can turn a quick profit. This is very appealing to those in need of supporting their addiction. However, the largest group of those that steal seem to be previous employees.
Many employees have faced layoffs at the oilfields. This has created anger and difficult situations. This can prompt many to take revenge on the company. Since they have worked the area, they know how to access the best equipment. They also realize the value of this equipment and target the items that will give the best return. Although it may seem difficult to sell stolen equipment, many find buyers outside of the country.
Oilfield theft is a rising problem for many owners in this industry. The amount of loss has reached the billion dollar range. Although this may not seem to as large as some industries, such as retail, and considering that there are far less oilfields than retail businesses, it is a very significant amount. It is not a problem isolated to one area or country and is on the rise globally.