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SINGAPORE – A former Shell employee who was part of a union that routinely embezzled millions of dollars’ worth of diesel from the Pulau Bukom manufacturing site to sell to other vessels pleaded guilty to his involvement on Tuesday (December 12).
Indian national Sadagopan Premnath, 40, is the first Shell employee involved in the robbery to admit his charges.
He pleaded guilty to four counts of criminal complicity of breach of trust as a servant involving embezzled diesel worth $ 49 million in 2017 and 2018. Another five counts will be considered in his sentencing.
Diesel is a type of commercial fuel product used in many industries, including the marine sectors.
Sadagopan began working at Shell Eastern Petroleum around 2012 as a field worker or panel operator, earning a base salary of approximately S $ 2,400 and earning up to S $ 4,000 from overtime pay.
As a field worker, he was instructed by the panel operator to manually open or close large heavy-duty valves. When he was working as a panel operator, he learned how to operate the black oil control panels that digitally controlled the movements of the valves.
The robbery occurred at the manufacturing site of Shell Pulau Bukom, Shell’s largest wholly owned refinery in the world in terms of crude oil distillation capacity and its largest petrochemical production and export center in Asia Pacific.
The conspiracy to misappropriate diesel began in 2007 with co-defendants Juandi Pungot and Abdul Latif Ibrahim, both Shell employees, and grew to involve more people over 11 years.
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The defendant was recruited by Juandi and joined the union in mid-2017. Juandi hired him because he was concerned that another colleague would be sent as a panelist too often and Shell management might uncover the crimes.
Sadagopan agreed to join the union in part because he was concerned that his higher-ranking colleagues might treat him with hostility, the court heard.
There were various methods of misappropriation of diesel, including shaping the flow through carefully planned routes that bypassed certain meters; ensuring that multiple pumps and tanks were operating at the same time to mask the acts; and carefully timing the legitimate load of purchased diesel to transfer the stolen oil.
Sadagopan’s role was to follow the instructions of his co-conspirators and act as a black oil panel man to open and close the valves so that the waiting ships could receive the stolen diesel.
As Sadagopan was younger than the rest, he initially sat next to his accomplices and observed the acts before checking the panel to mask the illegal charging pattern. He did not know who was buying the stolen diesel.
He received about US $ 150,000 (S $ 200,300) from the proceeds of the crime and has not reinstated Shell, the court heard.
SHELL NOTICE OIL LOSSES, TRIES FOR YEARS TO SOLVE THE PROBLEM
In early 2015, Shell noted significant unidentified oil losses at Pulau Bukom using its accounting process. It hired a group of experts from its other offices to conduct a review, but no misappropriation was found.
Shell Pulau Bukom then implemented various measures, including improving its accounting processes, improving its custody transfer meters and operational improvement items, but continued to experience unidentified oil losses.
In early 2017, Shell hired an outside consultant to conduct a five-week review of its hydrocarbon losses, but no conclusive explanation could be found.
Around the same time, Shell Pulau Bukom had its biggest hydrocarbon loss since 2015, and the team tracking and investigating the losses began to suspect misappropriation.
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The company engaged a global multidisciplinary team of Shell analysts to monitor tank movements and analyze available data. After the alleged theft of diesel by unauthorized transfer to other vessels was detected, Shell filed a police report in August 2017.
Since the discovery of the large-scale misappropriation, Shell has taken many costly steps to improve its systems and processes, including installing new and additional custody transfer meters and anti-theft CCTV cameras and developing security software. monitoring.
By the end of this year, the estimated cost that Shell will incur directly or incur in managing the long-term consequences of misappropriation will be approximately S $ 6 million.
Sadagopan will return to court for mitigation and sentencing in February.
The cases of several of Sadagopan’s accomplices are pending. Several officers from the tanker trucks that received the stolen diesel from Pulau Bukom have been jailed, including a CEO who was jailed in July last year.
