The red alarm

In tackling the issue of security, there are three types of security vulnerability in the region; violent attacks and explosions, absence of safety regulations, as well as corruption.
Unfortunately, the MENA region is known to be an unstable region, where violence, rebels and terrorism negatively affect economic development and hence, the different sectors including oil and gas. For instance, Saudi Arabia, owning the largest reserves, has been repeatedly threatened by possible brutal attacks led by Al-Qa’eda targeting its oil and gas infrastructures. The Saudi security forces thwarted a suicide car bomb attack on a major oil production facility in the eastern town of Abqaiq, near Dammam. The targeted oil facility handles about two-thirds of the country’s oil production. This attack is considered the first direct assault on Saudi oil production, said BBC security correspondent Frank Gardner.
Last September, Yemeni authorities prevented two suicide attacks on two of its oil and gas installations; the Canadian Nexen coastal oil pumping facility at Ash Shahir and the Safer oil pumping facility in Marib governorate. Four would-be bombers and a guard were killed when security forces blew up four trucks rigged with explosives, before they reached the intended targets. Although no group claimed its responsibility for this attack, yet the incident draws the same trademarks of Al-Qa’eda’s previous attacks on oil facilities in the Arabian Peninsula. However, the use of car bombings represent a “new tactic in terrorist operations in Yemen,” reported the Global Security News and Reports department at the Overseas Security Advisory Council.
In Sudan, the increasing tensions in Darfur had their impact in disturbing the oil sector as well. National Redemption Front (NRF) fighters seized the Abu Jabra oilfield, located in Southern Kordofan, making a “rare eastward extension of their campaign” toward central Sudan. Such disturbances have led to the decline of Sudan’s rate of oil production.
Evaluating Egypt’s energy security, and focusing on the last three months, the petroleum sector witnessed several cases of corruption and robbery, reported in Egyptian newspapers. On November 22, a group of 10 people were arrested for stealing huge amounts of crude oil and selling it at cheap prices to owners of petroleum warehouses. This gang inserted a sub-pipeline, 2 meters beneath the ground, to the main pipeline located in the area between Al-Khanka and Alexandria, through which they succeeded to get hold of a huge amount of petroleum products for nearly two months.
During the same month, two cases of corruption were revealed. An Egyptian company specialized in the import and export business attempted to illegally export around 1882 tons of Butamine to Tanzania, with an estimated cost of 11 million Egyptian Pounds without the authorization of the Egyptian General Petroleum Corporation. According to Al-Ahram newspaper, the company manager forged the official documents to export this petroleum derivative, which is produced at low-prices for domestic consumption only.
The second case was filed against six employees working for The Suez Petroleum Production Company for forging the request letters of loans and employees’ vacations and not abiding by work policies. Although this case took place in the internal organization of a state-run petroleum company, it illustrates a form of corruption in the workforce segment.
According to the 2002 Global Corruption Report, the three non-Middle East OPEC members having the highest corruption rates in the world, in a list of 102 countries are Venezuela ranked 81, Indonesia 96 and Nigeria 101. Most Arab countries were not surveyed, however the report says, “Corruption, sustained by skewed standards of living and a lack of transparent governance across the Middle East and North Africa, is a major hindrance to the region’s economic development.”
Nigeria, Africa’s biggest producer is considered a fertile land where many, if not all, forms of security vulnerabilities exist. First, Nigerian oil fields are increasingly under attack by tribal groups and others. In 2003, Royal Dutch/Shell, Nigeria’s largest oil producer closed their operations in the western Niger Delta region of Nigeria due to increasingly violent clashes between the Ijaw ethnic militants and Nigerian security forces. The Ijaw group threatened to destroy evacuated oilfields if the government failed to meet its demands for greater political representation on socio-economic issues.
Nigeria becomes a synonym not only to brutality, but also to the kidnap of personnel working in the petroleum sector. Around 11 people working in different oilfields were kidnapped during the last two months of 2006. Seven workers were captured by Niger Delta militants who raided a Saipem floating production, storage and offloading vessel operating on the Okono-Okpoho field. Three foreign nationals were taken hostage after Nigerian gunmen attacked Agip’s Brass oil export terminal in the Niger Delta. The last hostage was killed during a botched rescue attempt after being taken hostage off the coast of Nigeria. According to Upstream Online, since February 2006, militant groups have attacked oil pipelines and taken oil workers hostage in violence attacks that have cut about 25% of the country’s usual crude output of about 2.5 million barrels a day.
Inevitably, there is a common belief that political instability in the region is the main cause behind the attacks which are mainly targeted towards foreign oil companies. Based on the US Department of State reports entitled “Patterns of Global Terrorism”, the data about attacks against extractives in general and oil companies in particular have revealed that there were approximately 97 attacks by “international terrorists”, “domestic terrorists” and other aggressors against extractives in the period from 1996 to 2004. Eighty out of these attacks were against oil companies and their service companies, most of which were American or British.
Being labeled a conflict zone, this raises the question: what are the motives behind these attacks in such a vital sector? Mark Lindsay, director of Janusian Security Risk Management plc – a subsidiary of The Risk Advisory Group, a member of American Society for Industrial Security (ASIS) answered this question by saying that oil companies are targeted for political-economic reasons. They are socio-economic targets for attack by criminals who wish to extract funds from oil exploration that is conducted in the territories of their communities.
Insurgents see oil companies as sources of revenue to the governments that they oppose and therefore attack oil companies to reduce this revenue – as income is used by governments to fund the combat of insurgents, said Lindsay. For instance, when Al-Qa’eda led its attacks on Saudi oil fields, it announced that it is cleansing the Arabian Peninsula of infidels dealing with Americans and British governments.
Whatever the motives behind this security vulnerability, its effects are threatening the energy industry and devastating the wealth it raises. More attacks will push oil prices even higher, threatening global economic disruption. The urgent need to strengthen security systems for the protection of pipelines, oil terminals and tankers adds extra costs, which are reflected in the price of gasoline.
It can also cause the migration of thousands of skilled expatriates working in the oil industry, which decreases the daily production level. Besides, more foreign investments are lost as governments seem powerless in solving this problem and fail to maintain a secure environment for foreign ventures to operate in the region.


Welcome! Login in to your account

Remember me Lost your password?

Don't have account. Register

Lost Password