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Nigeria, Oil Terrorism & Pipeline Security

This Day (Lagos)
OPINION
October 9, 2004
Posted to the web October 11, 2004

By Ozma S Ahmed
Lagos
Oil terrorism is an imminent threat to global economy. Oil terrorism is a new
lexicon introduced by security analysts to describe the pipeline system attacks
in Iraq and elsewhere in the world by insurgents, freedom fighters and
brigands.
The most disturbing aspect of oil terrorism, is that it may become a new model
for the al-Qaeda or other terrorist organizations. The recent unprecedented
gallop of oil prices to $48 per barrel mid-August is the ripple effect of
persistent pipeline vandalization in Iraq. And there is no immediate end yet to
the prevailing turbulence there.
According to Ras Luft, a Co-director in the prestigious American Institute for
Analysis of Global Security (IAGS), world oil price will remain upwardly mobile
as long as the sabotage campaign against Iraqi pipeline system, and which has
crippled the country's oil industry, hindering its ability to export,
continues. A US Congressional Budget report confirmed that at least in the
foreseeable future, Iraqi oil revenue would be insufficient to cover the
capital investment required to turn the country into one of the world's major
producers. And the terrorist behind these attacks are not contemplating going
on vacation as long as the US remains in Iraq and indeed in the Persian Gulf.
And an oil-addicted America will not leave the Persian Gulf unless oil ceases
to flow there. Oil will continue to flow in the Persian Gulf. Saudi Arabia
alone holds a quarter of the world's total oil reserve. America consumes 25
percent of total world's petroleum production, and this makes it extremely
vulnerable to any threat to crude oil supply anywhere in the globe.
Neal Adams, an American oil industry analyst, in his most insightful book; Oil
& Terrorism, wrote "Oil is the life-blood that flows through the veins of
industrialized nations. From gasoline to tooth-brush and other practical
necessities, oil's importance touches on each and every one of us. Without oil,
the world would cease to exist as we know it." America's absolute dependence on
oil is the main drive of her war in Iraq, for it is clear to all now that
Saddam had no weapons of mass destruction in the first place, to warrant the US
adventure in Iraq as "war on terror." And if her oil interests are threatened
anywhere in the world, America will not hesitate to go to war.
A situation where the terrorists export this new strategy across to Saudi
Arabia and other Persian Gulf states will certainly run counter to US energy
interests, and provoke her into more war-mongering. And since Saudi Arabia
holds a quarter of the world's reserve crude oil, a disruption of her
productions will send tremors into the global oil market. With a pipeline
network of 10,000 miles, mostly laid above ground, the Saudi Arabian oil
industry is an attractive and easy target for terrorists. IAGS, recently
released a paper cataloguing al-Qaeda threats to Saudi Arabia. In 2002, al-
Qaeda operatives attempted to attack the Ras Tanura oil terminal where 10
percent of the world's petroleum products are processed. In May this year, six
oil workers were killed in a terrorist attack at the Red Sea port of Yanbu, one
of the pillars of the Saudi oil industry. 22 persons were also killed in al-
Khobar when terrorists attacked an oil company compound in Saudi Arabia early
this year. Instances of similar terrorist attacks on oil facilities abound in
the other Persian Gulf States.
Now, what are the implications of global oil terrorism to Nigeria?
Iraq is thousands of kilometers away from New York or even Abuja, but when
pipeline vandals there sneeze, the global economy catches cold. However, the
Iraqi pipeline vandalization saga impacted affirmatively on the nation's
treasury. Nigeria is said to have benefited from a windfall of about N500
billion by the end of last month, and lost only the sum of N17.05 billion, in
subsidies domestic fuel supply for the month of August. Deftly managed, the
growing threat of oil terrorism in the Persian Gulf could be Nigeria's and
President Obasanjo's moment to exert more international political clout and
also earn more petro-dollars. Our crude oil will increasingly assume a more
powerful tool of foreign policy. As the Persian Gulf increasingly comes under
al-Qaeda siege, the oil-addicted West will focus on Nigeria as the alternative
and a safer haven of oil supply. On the other hand it could make Nigeria a
vassal of the US, just as it has today turned Saudi Arabia to "America's areas
of strategic interest" (a euphemism for political/economic colonization) and
occupation of Iraq as in the name of war against terror. As this new form of
terrorism spreads in the Persian Gulf, safe oil bearing areas like Nigeria will
come under the US focus as "grounds of strategic importance". The so-called US
Naval exercises off the Gulf of Guinea last month was a desperate America
strategy simply reminding her "friends" like Nigeria that the Gulf of Guinea
could come within the ambit of her influence and that her military presence is
ever nearer, should anyone think to play "Saddam" to their oil interest.
The national dilemma now is that Nigeria does not appear ready to maximize this
opportunity. Our critical oil infrastructure including pipelines, export
terminals, fuel depots, oil rigs and pumping stations, are not well-secured.
Even though the restive youths of the Niger-Delta are not about following the
religious or ideological path of the al-Qaeda, (their motivation in the
business being purely for cold, hard cash), their vandalization activities rob
the nation blind and exert damages that could make any terrorist group green
with envy. "Mr. President himself while declaring open the 4th National Oil
& Gas Conference in Abuja in April lamented the negative impact of pipeline
vandalization on the nation's economy. He decried the resurgence of pipeline
vandalization, which is causing the nation to suffer colossal losses amounting
to billions of dollars through loss of revenue, lives and national image. Dr.
Edmond Daukoru in March this year, said the nation lost a whopping $6.8billion
to pipeline sabotage between 1999 to date. And this estimate does not include
the cost of replacing sabotaged infrastructure which last year alone gulped the
sum of $5.8 million. The Group General Manager of the NNPC, Engr. Funsho
Kupolokun while visiting the EFCC Chairman Mallam Ribadu last month, also
confirmed that Nigeria last year lost a total of 450,00 barrels (300,000 to
vandalization, 150,000 to communal disturbances) daily.
Our foreign partners are also concerned. At the conclusion of his visit to
Nigeria in August, the Deputy Commander of the United States Army in Europe,
General Charles Wald warned that the threat of terrorism looms large because a
key producer like Nigeria has not done enough to protect critical energy
infrastructure such as pipelines and off-shore rigs from possible attacks The
British envoy, Mr. Philip Thomas, lamented that Nigeria was losing ten percent
of her international production to thieves. Shell Petroleum Development
Corporation, reported it lost 1 8m barrels of crude oil, valued at $460m, in
the first quarter of 2003.
In Nigeria, when pipeline vandals strike, nobody in Lagos, Abuja or anywhere
catches cold. Early this year, the saboteurs used explosives to pierce the
crude oil bearing pipeline at Shanomi creek in Delta State. This incident kept
both the Warri and Kaduna refineries shut for months. Nobody in Nigeria caught
cold.
Pipeline system security is a very expensive business. In Iraq, the interim-
government, in appreciation of the strategic importance of her pipeline system
launched Operation Task Force Shield, to checkmate the vandals. It has deployed
14,000 security guards along her 4300 mile pipeline and 175 other critical
installations. In Basra area where two-third of the country's oil is produced,
800 British soldiers of the Royal Fusiliers protecting a 30-mile stretch of
pipeline repeatedly fire mortar bombs in the night to illuminate their
operational area, while also using radar mounted on an armoured vehicle to
track movements along the pipeline. By day, with a combination of radar and
helicopters over flying the pipeline network, they keep the vandals from
tampering a thirty-mile stretch of pipeline bearing oil valued at $64m.
In Nigeria we deploy only 500 ill-motivated mobile policemen with minimum-
security technology and logistics to protect 4950 kilometre of pipelines
bearing oil valued in billions of dollars. And because of their poor
remuneration, they sometimes break open the pipelines to steal oil to make
money. We have been forced to become accustomed to this abnormal situation due
to progressive increase in political and security indifference that nothing can
be done. But something can be done not only to plug our leaking energy loophole
but also for Nigeria to benefit politically and economically from the volatile
situation in the Persian Gulf. Nigeria should brace up to the challenge of
world leadership in oil, and check pipeline vandalism. We need to re-examine
our oil industry security policies now.
One of the most important policies to be re-examined, if we have one, is
pipeline system security policy. Pipeline system in this context includes,
export terminals, pumping stations, refineries, transmission pipelines,
distribution pipelines and depots. The policy should point the way out of the
prevailing official lethargy and indifference to pipeline vandalization, which
is depriving the nation of enormous amount of cash, international goodwill and
human capital. The Senate Committees on Petroleum, the Presidential committee
on pipeline vandalization, the House of Representatives Committee on Petroleum,
and other stakeholders in the oil industry, should urgently meet to fashion out
a pipeline system security policy. Nigeria stands at the brink of an increasing
global attention, and well-managed, a decisive foreign policy triumph and the
accompanying cash windfall. But this moment may elude Nigeria if our pipeline
systems continue to be indifferently protected, thus making Nigerian oil
industry as unsafe as the US General Charles Wald recently

   

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