Militant threat to oil installations grows

Companies operating in the region should increase their vigilance, a leading risk consultancy organisation has warned.

Oil installations in the Arabian Peninsular are under growing threat from militant groups hostile to western interests, and companies in the region should increase their vigilance, a leading risk consultancy warns. Jonathan Wood, a global issues analyst with the London-based security adviser Control Risks, said his group predicted a rise in militant activity against Saudi Arabian energy facilities. Mr Wood said the expected increase in sabotage attempts in the region would be largely opportunistic, resulting from the relocation of al Qa'eda operatives from other hot spots. "It's an opportune moment with the US withdrawing from Iraq and NATO forces intractably bogged down in Pakistan and Afghanistan," said Mr Wood, who was in Abu Dhabi to give a briefing at the Officers' Club. He said the global financial crisis had exposed western economic vulnerability and militant groups were focusing more of their resources on disrupting western economic interests, including the flow of Gulf oil exports. The Saudi government is on increased alert against the threat posed by a build-up of al Qa'eda's presence in neighbouring Yemen, encouraged by that country's deteriorating economic and political situation, Mr Wood said. The reported killing in Yemen of several hostages seized last weekend by anti-government rebels could mark a new pattern in violence towards foreigners, said Ginny Hill, the author of a research paper on Yemen for the think tank Chatham House, also based in London. "The calculated execution of captive hostages would represent a new and chilling tactic, and confirm fears that al Qa'eda's capacity and ambition in Yemen are increasing," Ms Hill said. Mr Wood said the governments of major Gulf oil exporters, including Saudi Arabia and the UAE, had done a good job recently of protecting their energy installations, but no security programme was ever 100 per cent effective. In 2006, Saudi authorities foiled an al Qa'eda attack on the kingdom's Abqaiq oil refinery, which processes about two thirds of the crude pumped by Saudi Aramco. The next year, they arrested more than 170 militants suspected of planning attacks on military and oil facilities, with more than 700 arrests following last year. In 2003, al Qa'eda launched a campaign aimed at overthrowing the Saudi royal family, featuring a string of attacks aimed mostly at foreigners. In May 2004, gunmen attacked two compounds in the eastern Saudi city of Khobar, used by US and European contractors, taking hostages in a siege that resulted in 22 deaths. Earlier that month, armed attackers stormed the offices of a Houston oil company in the western Saudi oil centre of Yanbu, killing six expatriates and a Saudi national. In Dec 2004, the al Qa'eda leader Osama bin Laden called on militants to attack oil targets in the Gulf to stop the flow of oil to the West. In Iraq, security concerns are receding, but rising political uncertainty is posing a new set of challenges to foreign energy companies seeking to return to the country for the first time since it nationalised its oil sector in 1972. The clients of Control Risks are worried about whether the Iraqi oil minister, Dr Hussein al Shahristani, will survive criticism of his policies by parliamentarians intent on disrupting the ministry's plan to award long-term contracts under Iraq's first post-war oil and gas licensing round. Without a federal oil law in place to protect contracts and with national elections set for early next year, they are concerned about what could happen with a new government or oil minister in place. Foreign consortiums have been invited to bid on contracts to boost output from six of Iraq's biggest oilfields and two gasfields, with the winners to be announced at the end of this month. But Dr al Shahristani's opponents have been trying to derail the bidding round and have called for the contract awards to be postponed or cancelled. [e-mail]