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Discuss this article (0 Comments)Mysteries & puzzles
by ArabianBusiness.com staff writer on Wednesday, 09 July 2008
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Tony McClenaghan, senior consultant, security practice at Control Risks examines the new and emerging threats faced by the oil and gas community.
In his book "Reshaping National Intelligence for an Age of Information" Greg Treverton made the distinction between mysteries and puzzles, suggesting that, in the intelligence world, the emphasis in the late twentieth century had been on finding answers to puzzles that could, in principle, have been answered definitively if only the information had been available.
Mysteries, on the other hand, could not be answered with certainty even in principle. This is a useful distinction which can be further developed in the security context. Puzzles might be thought of as those issues that have answers and involve facts and data, while mysteries are those issues for which there are no answers and involve judgement, analysis and interpretation.
Alongside traditional threats of, for example, kidnapping, new ones are emerging. Terrorism is a growing and worrying phenomenon, with a four fold increase in attacks in the early part of this decade, driven largely by activity in the Middle East and Pakistan.
In Russia Chechen separatists have, in recent years, increasingly adopted the banner of radical causes and established connections to Al-Qaeda, and their activities have moved to other regions of the North Caucasus, including Dagestan and Ingushetia.
Energy installations face a credible terrorist threat in the North Caucasus while, in the short to medium term, those in the Caspian region, as well as in Siberia and in the Russian Far East, face a less credible terrorist threat.
However, in the longer term, with increasing energy shortages and in the event of increased tensions between the west and Russia, ‘geopolitical sabotage' against pipelines is possible even in these regions.
A credible rise in fundamentalism in Central Asia could also heighten the risks of terrorist attacks against pipeline infrastructure, owing to the lack of other accessible targets.
But the issue needs to be kept in perspective. The US National Counterterrorism Centre (NCTC) statistics suggest that only a very small percentage of terrorist attacks are directed against the energy sector.
Far more damage has been done by vapour cloud explosions caused by process failure, pipe corrosion and other maintenance failures.
Despite these concerns about the vulnerability of oil and gas infrastructure to terrorism, the threat is broadly manageable with existing technical solutions and management practices.
More challenging from an International Oil Company (IOC) perspective are the growing problems associated with insecurity and poor governance in major producing countries.
Studies by IEA World Energy Outlook and others indicate that 73% of the world's gas supply comes from medium to high risk states - be it political or security risk or, indeed, both.
By 2020 over half the worlds growing demand for supply will come from developing or transition states. In this medium to high risk context kidnapping of expatriate IOC workers has nearly doubled in the period 2004 - 2006, often driven by new threats such as community issues.
We cannot afford to lose sight of the possible connection between the two, however, and low intensity communities issues can be causal to high impact acts of terrorism and kidnapping.
These dynamics are changing the security environment as the traditional focus on catastrophic events needs to shift to dealing with lower impact but higher frequency threats which can be more disruptive to business.
Petty crime, inter-ethnic clashes between imported and local labour and endemic corruption are the current most realistic risks. For example, clashes broke out in October 2006 between Kazakh and Turkish workers at a residential settlement at the Tengiz oilfield (Atyrau, western Kazakhstan), injuring around 140 people.
Since the early 1990s, thousands of Turks have come to Kazakhstan to work on construction sites in the major cities, such as Astana and Almaty, as well as on the oilfields.
Kazakhstan suffers from an unevenly skilled labour force, with few experienced managers, making it difficult for many foreign companies to meet legal requirements of local content employment.
Elsewhere in the region the illegal tapping of pipelines has resulted in shutdowns while repairs have been made. In some cases there have been oil/condensate leaks resulting in ground contamination.
In most cases there was a considerable loss in export volume and, therefore, in revenue. Even if an illegal tap has not led to product loss, the pipeline still has to be inspected and repaired, usually involving reducing pressure flow with similar loss of revenue.
It would seem obvious that for illegal pipeline tapping to be successful there needs to be a market for the stolen product; criminal elements with the technical ability and equipment to carry out the attacks; an ineffective security environment and a low probability of being detected and prosecuted.
The security solutions to the problem reflect a mixture of puzzles and mysteries.
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