Drop in oil prices leading to a rise in theft of unattended, expensive oil and gas equipment

A drop in oil prices is leading to a rise in theft of unattended oil and gas equipment, often by laid-off workers with knowledge of rigs, Bryce Gray reports for High Country News. "Reports of what gets stolen from oil and gas fields read like an exhaustive hardware supply list: Drill bits, valves, metal piping, copper wiring, vehicles, trailers, hand tools, pumping unit engines, and of course, oil—perhaps millions of barrels’ worth." (Apache Corp. surveillance video of copper wire being stolen from an oil lease north of Odessa, Texas)

"National employment in oil and gas extraction is at its lowest level since February 2012, down nearly 9 percent from the peak levels enjoyed in 2014, according to the Bureau of Labor Statistics," Gray writes. At the same time some areas have seen a 30 to 35 percent increase in thefts of equipment over the past two years, said Russell Winn, an account executive with a brokerage firm closely involved with the oil and gas industry.

"Values of stolen items vary, but one truckload of drill pipe can be worth $100,000, while pilfered scrap metal from a single worksite can fetch more than $10,000," Gray writes. "Last April, seven drill bits worth $267,000 were reported stolen from a site in Weld County, Colorado. All that theft adds up to tens of millions of dollars lost annually. Some sources indicate that value can even soar into the billions. In Texas alone, the Energy Security Council estimated that 1 to 3 percent of the state’s 700 million barrels of oil production was stolen in 2013. The problem is simple: Unattended and out-of-service oil wells are easy targets for thieves."

Brad Roberts, an oil well servicer and owner of a company that stencils marks on machinery to help with recovery, told Gray, “You have a million dollars worth of assets in the middle of nowhere, just sitting there. During depressed times, you have people that are unemployed and they’re looking for ways to turn anything into cash.… It’s a horrible situation.” (Read more)