Dusty Roach
It seems like only a month since I’ve seen you last! Over the last 20 years the crime rate of theft, solely in the Permian Basin area, has grown to epic proportions. Sadly, not all companies report all theft. Also sadly, some companies, large and small, are not aware of all theft.
Oilfield theft may now be drawing more attention as awareness of it increases, but some companies, for whatever reason, opt to simply write off the losses as lessons learned (rather than reporting them), presumably to avoid insurance increases or to avoid scrutiny by potential investors or financing over lack of inventory controls.
The issues of theft exist not only externally but sometimes internally. After all, available manpower is also an issue as well the influx of cartels, illegal immigration, and the opportunity to make big money quickly.
As Jimmy Breslin once said, “The number one rule of thieves is that nothing is too small to steal.”
Granted, the oilfield’s reputation is not one that is pristine and void of theft. Meanwhile, through the decades, and spanning even the past century, it has elevated itself as a legitimate and reputable enterprise. Numerous fortunes have been made throughout the years!
Due to the Sarbanes and Oxley Act, accountability has come to be scrutinized. And what accountability has shown is that, whether the theft is paper theft or accounting theft or physical theft, theft is alive and well in the oilfield.
Now that we have established its presence, the theft of equipment, fuel, rig components, and vehicles—all the way down to copper wire—amounts to a minimum of 1.4 to 2.6 million dollars per month (as much as $30 million a year) in our industry. And that is just what has been reported. I feel those are conservative numbers. That was a 2022 estimate. It has been suggested it could be upwards of hundreds of millions of dollars per year.
The Oilfield Task Force can only process figures of what has been reported as stolen. Not everything that has been stolen is reported.
As of now, the oilfield theft task force is the best way to truly get a grip on this ever-growing problem. The days of a passerby stealing a 24” pipe wrench out of the back of a pickup truck is not our largest worry. The professional thieves are educated and modernized in their craft. They share their ideas amongst their counterparts. They run it like a business. The technology that they utilize is ahead of our industry’s ability to keep up with or get in front of them. They are becoming bolder, smarter, and more technologically advanced.
I was told by a local law enforcement officer (LEO) that they are starting to utilize handheld Flir (forward looking infrared guns) for thermal imaging cameras on tank batteries from a distance. The days of utilizing game cameras are approaching obsolescence.
Loss prevention personnel have become loss prevention departments. It is no longer just on the accounting side. Today it’s a company-wide focus on materials, equipment, and inventory—all in order to get a grip on the theft.
They themselves, the thieves, also invest into their craft. Loss control departments have lost control. Oil companies have enlisted the help of LEOs to help stave off the theft as well as gain outside help. With today’s justice system the criminals are not kept in prison for the time commensurate for the crimes they commit, regardless if it is blue collar or white collar crime. With the advent of the cartels, the thieves are usually out of jail before the paperwork is completed. Most of the targeted areas of theft are remote locations. Locked gates are also just a mere hindrance to the thieves. Such gates merely keep the honest people honest, not the thieves.
Some of the perpetrators are disgruntled employees feeling that they are underpaid or underappreciated. Regardless of who is behind the thievery, oilfield theft is on the rise. The thieves are becoming more technically inclined and emboldened. I encourage everyone to look deeper into methods and ways to mitigate these thefts. The fact remains that there are only two kinds of companies—those that have had something significant stolen, and those that are going to have something significant stolen. Precautionary and prophylactic measures can help contain or limit the loss. It would be advisable to have an aggressive loss prevention team do a study of assets and facilities and develop a plan of attack. Honest people are not the only ones that utilize drones to get the lay of the land. Catching thieves is not inexpensive, but then neither is losing product.
This month I elected to cover this, as it is also a safety issue. Not all companies are able to run entire fields with current technology. Even if that is the case, pumpers and roustabouts are called out during all times of the day and night. Granted, not all theft is done at night; the more emboldened thieves steal during the day as well. Often they are active in areas where there is no phone signal.
As I’ve often said before, the safety job calls for numerous hats to be worn. Thieves have no interest in being caught and yet they still do their business regardless of the risk. The mitigation of risk and loss is our job. Safety helps keep the money coming in the front door from going out the back door.
As always, it is not how many hits in baseball that counts. It is how many times that you reach home safely. God bless and stay safe.
Dusty Roach is a safety professional based in Midland. He is also a public speaker on subjects of leadership and safety, and he maintains a personal website at dustyroach.com.