Peril of the sea

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A US naval vessel bears down on a suspected pirate vessel in the Gulf of Aden.

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Paul Agate, Swinglehurst Limited.

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Simon Stonehouse, Brit Insurance.

Regional piracy poses a massive danger to the oil and gas industry.

The threat of piracy to international shipping has reared its head again, and attacks on oil and gas related vessels, as well as cargo ships have been stepped up in recent years, and even months.

The Malacca Straits passing through Malaysian and Singaporean shipping channels were once the most hazardous waters in the world, but international focus has shifted much closer to home for Middle Eastern readers.

The Gulf of Aden, just off the Yemen coast has become the number one international hotspot for piracy as attackers from the largely lawless and ungoverned Puntland region of Somalia have increased both the ferocity and frequency of their attacks.

Just last month a fully laden VLCC was approached by gunmen as it passed through International shipping lanes between Yemeni and Somali waters on its way to the Suez Canal.

Fortunately the attackers were deterred by the evasive manoeuvres undertaken by the ship's captain, and yet another crisis was averted. However, the incident reflects not just the growing confidence of the pirates plying the Gulf waters, but also the vulnerability of the oil and gas sector's essential seaborne trade.

For mariners in charge of the vessels that carry the world's energy, modern piracy is a very real threat, and one that is fast becoming an expensive problem to the viability of Suez bound trade - the vital link connecting Middle Eastern cargos with customers in Europe and the US.

The pirates that are attacking today's shipping are typically armed gangs who either sneak aboard vessels or threaten to fire upon them unless allowed to board. The standard practice in the waters off Somalia is to secure the vessel and take the crew, cargo and hull hostage in the littoral waters where local sympathisers can offer protection.

They have only one goal in mind, and that's the ransom. If a ransom is refused or cannot be agreed the risk to the crew, the cargo and the vessel itself is greatly increased, even with a special forces raid. If gunmen become desperate or fearful of a raid then there is little to stop them destroying the vessel and trying to run.

Current situation

"In the most recent spate of attacks, since May 16 ships have been detained in these waters," explains Paul Agate, head of marine insurance, at London based Lloyds broker Swinglehurst.

"This makes plying trade anywhere near the Somali routes a genuinely scary prospect for owners. It's not just small cargo ships anymore. Chemical tankers have been detained now."

Simon Stonehurst, marine hull underwriter for Brit Insurance agrees the threat is significant and the oil and gas industry is vulnerable. "The pirates are targeting vessels with a low freeboard, and vessels where the owners will pay the ransom. High value oil and gas assets such as offshore support or seismic vessels fit the profile, and it's no overstatement to say the threat is very real in the Gulf of Aden."

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