Energy companies operating in North Africa face a long-lasting security threat that is likely to change the way they operate, it emerged on Tuesday.
However, this state of affairs is not likely to be a setback to their commitment to developing the region’s important oil and gas resources.
A US government security assessment of last week’s Algerian incident reviewed by the Wall Street Journal (WSJ) said that foreign energy companies operating in Algeria’s Sahara region are already taking steps to reduce their exposure to attacks.
These companies have reduced personnel and travel to the country, prohibiting road travel, and considering concentrating their staff in one location in case of the need for a full-scale evacuation.
The fact that a relatively small group of militants could attack a critical plant that was already protected by the Algerian military and other government and private security forces has shaken investors,
Economist Intelligence Unit analyst Edward Bell, says investors have been shaken by the fact that a relatively small group of militants could attack a critical plant that was already protected by the Algerian military and other government and private security forces.
The attack by suspected Islamist militants in Algeria’s Sahara on the remote In Amenas gas plant—run by BP, Statoil and Algerian state oil company Sonatrach—and the army’s subsequent response—left scores dead and highlighted a formidable new threat for oil companies investing throughout the region.
According to WSJ, until last Wednesday’s attack, which was unprecedented in its scale and ferocity both for the Algerian and global energy industry, companies including Sonatrach, Total, GDF Suez, BP, Statoil, Cepsa and Repsol had been exploring for or producing oil and gas in Algeria’s heavily militarized southern desert area for years without major incident.
“The remote locations were seen as a strength, with many oil companies likening desert operating conditions to those seen on offshore production rigs,” WSJ quoted Claire Spencer, head of Middle East and North Africa at UK policy institute Chatham House as saying.
Now the region itself, which shares long porous borders with unstable and turbulent countries that include Libya, Mali and Niger, has become a threat as once-disparate militant Islamist groups across the region appear to have coalesced and strengthened following the war in oil-rich neighbor Libya.
Algeria and Western oil firms beefed up protection of the country’s critical energy industry and dispatched more Algerian military forces after the deadly attack at In Amenas.
Algerian army battalions of at least 500 men each have been sent to protect every oil and gas installation, said Derrouiche Messaoud, a trade-union leader at the Hassi R’Mel natural-gas hub in the Sahara and a Sonatrach employee.