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Latino Daily News

Monday November 15, 2010

Drug Cartel Violence Costing Oil Industry $350,000/Day in Lost Revenue

Threats and violence by Mexican drug gangs are preventing some government oil workers from reaching installations in northern Mexico and costing state-owned Petroleos Mexicanos (Pemex) about $350,000 every day in lost production, a company official said.

The official said Pemex has shut down the equivalent of about 100 million cubic feet of natural gas production per day. That amounts to about $10.5 million per month, or about 2.3 percent of Mexico’s $450 million per month average in monthly natural gas revenues.

The lost production is centered in the Burgos gas field near the east Texas border in an area where drug gangs have threatened and kidnapped Pemex workers at some of the company’s installations. The problem came to a head in May 2010, when five workers at a plant were abducted by armed men, the kidnapped men have not been heard from since. 

However, army troops are now helping Pemex provide increased security. “This has allowed us to start partially recovering the production we had stopped for this reason,” the Pemex exploration and production division chief told local media.