Mexico Risks Joining Colombia As Regular Oil Sabotage Target

As Petroleos Mexicanos resumes natural gas supplies this week after repairing pipelines damaged by a rebel group, uncertainty remains over when the next shutdown might happen.

In July, optimists saw two pipeline attacks as isolated cases of sabotage. Last week, the People`s Revolutionary Army, or EPR, buried that thesis with its third and most costly attack on energy infrastructure.


If the group continues to blast holes in Mexico`s naked pipeline network, companies like Nissan (NSANY) and Volkswagen (VLKAY) will face a rising cost structure, and the country will have a harder time convincing new firms to set up shop.

Targeting energy infrastructure is nothing new. In Colombia, Marxist groups regularly attack the Cano Limon pipeline, lifting the cost of oil production as helicopter fleets patrol the route and repair crews remain on constant call.

Nigeria has seen 20% of its oil production shut in as separatists in the Niger Delta wage a protracted war that has frustrated the oil output targets of companies like Royal Dutch Shell (RDSA) and Chevron Corp. (CVX).

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