Kazakhstan strengthens penalties for pipeline oil rustlers

October 15. Central Asia newswire

By Hal Foster

Kazakhstan strengthens penalties for pipeline oil rustlersOil-pipeline security guards have little sympathy for those who complain about a bad day at the office.

They know what a bad day really is: Oil rustlers pumping 107 bullets into your car.

That’s what happened not long ago when two KazMunaiGas guards surprised bad guys stealing oil from a pipeline.

The rustlers, who had tanker trucks to carry off the oil, were sporting submachine guns. The state-owned oil company’s guards had light arms and shotguns. It was no contest.

The guards survived only because their security car was bulletproof, said Amangeldy Kurmangaliyev, first deputy director of KazMunaiGas’ Semser Security subsidiary.

“You never know how the outlaws” will react, said Bagdat Baisalbekov, deputy director of KazMunaiGas’ security office in Karaganda in northern Kazakhstan. “All our men understand that they are putting their lives at risk.”

He said KazMunaiGas’ top management should pay the guards commensurate with the dangers they face daily.

Kazakhstan stiffens penalties for pipeline theft

Theft of oil from pipelines is so widespread, and poses such a threat to the guards who confront the desperadoes, that President Nursultan Nazarbayev has signed legislation stiffening rustling penalties.

From now on, the bad guys will get sizable prison terms rather than the relatively short sentences, probation and fines that previous legislation provided for.

One of those who drafted the tougher law, Lower House member Nurlan Nigmatullin, noted that security guards caught a gang with seven tanker trucks of stolen pipeline oil in Atyrau Province last year.

Because of the light penalties under the old legislation, “on January 14 of this year, the same group was caught again with the same Kamaz (Russian-brand) tankers,” he told the New Europe news operation.

The stiffer penalties in the new legislation – five to eight years in prison – are in line with those in Russia but don’t go as far as China’s ultimate pipeline-theft penalty: execution.

“As we worked on this bill, we felt a certain pressure from some persons concerned who questioned such tough measures,” Nigmatullin said. “But when the damage to the country (from oil losses and pipeline-repair work), at a very conservative estimate, exceeds a billion and a half tenge, such a clampdown is absolutely necessary.” One and a half billion tenge is about $10 million.

Stealing oil is so lucrative that well-organized, ruthless criminal gangs are commonplace, although amateurs abound as well.

Sometimes the gangs descend on a pipeline with a convoy of up to 10 tankers.

If a security car blocks their path, one of the tankers slams into it, tossing it off the road, Kurmangaliyev said.

Serikbek Yelshibekov, KazMunaiGas’ general manager for business support, backs another piece of legislation before Parliament that would allow guards to carry grooved-bore rifles, which are accurate from hundreds of yards away.

“Imagine a whole formation of tanker trucks speeding through the steppe – it is simply impossible to stop them with shotguns,” he said.

Grooved-bore guns would allow guards to shoot out tankers’ tires a long way off, before the heavily armed bad guys were on top of the guards.

Securing pipelines requires heavy security

Mostly because of the pipeline thefts, KazMunaiGas has the second-largest corporate security operation in Kazakhstan – 7,500 employees.

The company has 1,667 guard posts along its oil and gas pipelines. In addition, 214 mobile units patrol up and down the lines.

Only the national railway company Kazakhstan Temir Zholy has a guard force larger than KazMunaiGas’ – 14,000. Many of its guards try to prevent thieves from stealing material along the vast lonely stretches of rail.

Together, KazMunaiGas and the railway company account for 28 percent of Kazakhstan’s 77,500 private security guards.

Kazakhstan uses pipelines to transport 60 million tons of crude a year to markets at home and abroad.

They are pecked with hundreds of cuts from oil rustlers, pipeline operators say.

For example, in the section of pipeline that KazMunaiGas’ Karaganda security office is responsible for, guards found 30 new cuts last year, Baisalbekov said. In the section that the Aktobe security operation covers the figure was 120, he said.

Well-organized rustlers have theft down to a science

In a well-organized operation, the desperadoes dispatch an expert welder to breach a pipeline.

Expertise is important because every cut spills oil. A pool of crude on the ground is a tip-off that rustlers are at work. Guards can stake out the site, waiting to apprehend the bad guys.

The trick for the welder is to make a cut quickly, then reseal it with a temporary hatch that the rustlers can lift later to steal the oil.

Welders who can do a quick, clean and spill-minimizing job can get 500,000 tenge, or about $3,400, for a few minutes’ work, pipeline security people said.

The well-organized rustlers have the thefts down to a science. It takes only 15 minutes for them to load 26 tons of crude into a tanker.

They usually use three to 10 tankers per operation, security people said.

Because the commodity that they are selling is “hot,” rustlers can get only a third as much of the market price for crude. But it’s still worth a fortune.

The current price of oil is $83 a barrel. A third of that would be roughly $28.

Rustlers with 10 tankers could steal 260 tons of crude. There are six to eight barrels per ton, depending on the oil’s density.

At six barrels per ton, 10 tankers would contain 1,560 barrels. At $28 a barrel, that would mean $44,000 for two and a half hours of work.

Because regular refineries would be likely to report someone trying to sell them a few tankers’ worth of crude, the bad guys usually sell it to black-market refineries.

Once it’s converted into gasoline, diesel, kerosene or another refined product, it’s easier to sell without authorities becoming suspicious.

“The illegal refineries are usually located in the middle of nowhere in the steppe,” Baisalbekov said.

Before the stiffer anti-rustling legislation, they were “found, closed down, but in a short time – six months maximum – they were up and running again,” he said.

The new legislation not only provides for sending pipeline thieves to prison, but black-market refiners as well.

It makes it a crime not only to steal pipeline oil, but also to transport it, buy it, store it or refine it.