Algeria crisis triggers Libya, Egypt oil security review
Written by Reuters, Monday, 21 January 2013
More than 20 foreigners were still being held hostage or missing inside Algeria's In Amenas gas plant on Friday after Algerian forces stormed the desert complex near the Libyan border to free hundreds of captives taken by Islamist militants.
Hundreds of workers were evacuated from a number of Algerian production sites on the border with Libya to safer places in the country's centre and industry experts said that could ultimately lead to lower oil and gas production from the OPEC member state, Reuters reports.
Libya and Algeria are Africa's third and fourth largest oil producers with Libya also the largest oil reserves holder on the continent. Together with Egypt they are important gas suppliers to Europe and the budgets of all three countries are heavily dependent on energy revenues.
Libya's oil protection force, affiliated with the defense ministry, said there had been no reports of incursions into its oilfields, where more guards and military personal had been deployed and security patrols intensified inside and around the sites around the clock.
"Due to events in the region, the Petroleum Faculty Guard has taken a series of actions to enhance and reinforce the protection of oilfields, facilities and employees in the western and southern regions of Libya," it said.
A Western security adviser working in Libya said by telephone he was not sure that would immediately boost security, since the oil protection force, set up after the overthrow of Muammar Gaddafi in 2011, was at an "embryonic stage".
Libya's National Oil Corporation chairman Nuri Berruien confirmed increased security measures at fields on the Algerian border.
Some Libyan oil fields such as Italy's Eni's Elephant are located several hundreds of kilometers (miles) across the desert from In Amenas, where the hostage tragedy unfolded this week.
The militants said they attacked the facility in retaliation for France's intervention in neighboring Mali and warned Algerians to stay away from sites with a foreign presence.
That attack and the warning triggered a mass exodus of expatriates from Algerian oil and gas production sites and security experts have said similar evacuation could be on the way across other north African countries.
BP said on Friday hundreds of workers from international oil companies had been evacuated from Algeria on Thursday and many more would follow.
Crispin Hawes, from Eurasia consultancy, who said he had visited the In Amenas site several times, said oil companies removed non-essential staff in such circumstances as part of their established protocols. "In other nearby countries, similar responses are also almost automatically triggered," he said.
"Every international oil company operation in Algeria will be obliged by insurers to take certain precautions to avoid and mitigate such instances. Premiums are likely to rise and the expatriation of staff will add to operating costs".
He said the exodus of expats might delay some projects but added that very big outages were unlikely as the biggest fields in southern Algeria such as Hassi Mesaoud were "extremely secure".
For a map of Algerian facilities: here
NOT SO SECURE
Spain's Cepsa, which is the biggest foreign player in Algeria operating the country's No.2 oilfield Ourhoud some 300 km (186 miles) north of In Amenas, decided to evacuate staff towards the country's centre and away from the Libyan border, an industry source said.
A source at Algeria's state oil firm Sonatrach, who works at the country's top oil field Hassi Messaoud, said security had been raised even though the deposit was 900 km (560 miles) away from In Amenas.
"Automatically, when you have an incident like this, security will be on alert, we prepare ourselves," he said.
A Western risk consultant, specializing on North Africa, said the security situation in Algeria could not be beefed up as quickly as in Libya.
"Westerners have been lulled by the idea that the state will provide security. Now they may want to increase it, but Algeria, being socialist, simply doesn't like the idea of private security," he said.
People who have worked at the In Amenas plant say it was heavily fortified, with security, controlled access and an army camp with hundreds of armed personnel between the accommodation and processing plant.
Even in Egypt, thousands of kilometers away from In Amenas, the oil industry was feeling unnerved.
"If there is a critical situation (in Egypt) we will take measures including staff evacuation. At the moment, everything is under control," a spokesman for Russian oil major LUKOIL said.
Royal Dutch/Shell, which has a heavy presence in Egypt, said it was looking carefully at the geopolitical situation to make appropriate security arrangements, but declined specific country-related comments.
Chief executive of global oilfield services major Schlumberger, Paal Kibsgaard, told a conference call on Friday security in the entire region was under renewed scrutiny.
"If you talk about Algeria and Libya, we are operating there with security measures and, with what has happened in the last week, we are relooking at that," he said.
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