By Ed Blanche
21-04-04
In February 1991, Saddam Hussein put Kuwait's oil fields to the torch as his invading army was driven out of the emirate by US-led forces. More than 700 wells were set ablaze in the worst attack on energy infrastructure since World War II. Increasingly, the energy industry is under threat from global terrorism, with the focus largely on the turbulent Middle East.
The possibility that terrorists could ravage oil fields the way that Saddam did
in Kuwait is probably extremely remote, if only because of the sheer scale of
that kind of undertaking. But it should not be discounted altogether.
A couple of hundred suicide bombers, operating in unison, could do immense damage, with billions of dollars in losses. Saddam Hussein's act of madness and revenge in Kuwait removed 2 mm bpd of oil from production. That is $ 74 mm a day at current prices. It took a year to extinguish all the fires in Kuwait and three years to rebuild the emirate's oil infrastructure.
As fate would have it,the oil industry in post-Saddam Iraq has become the target
of Arab insurgents fighting the US-led occupation. They are blowing up vital oil
pipelines in a sustained campaign that security experts are worried could
inspire terrorist attacks on key energy facilities in other countries and
tankers carrying oil and gas around the world.
Iraq, which has oil reserves second only to Saudi Arabia, is importing more and more petroleum because of the insurgency. Energy terrorism is not new to the Middle East. But unlike Latin America and Africa, where it has largely been limited to bombing pipelines, sabotage and kidnapping, the potential for major attacks in the Middle East and Islamic countries in Asia is high because of the terrorist organizations operating in these areas.
The lethal nature of the attacks carried out by Al-Qaeda and its affiliates add
to the dangers facing the energy industry. This is particularly true in Saudi
Arabia, which has become increasingly vulnerable to terrorist attacks. Osama bin
Laden has repeatedly threatened Saudi Arabia's oil installations, and in an
audio tape issued in October 2002 warned his enemies that "the youths of
God are preparing for you things that would fill your hearts with terror and
target your economic lifeline until you stop your oppression and
aggression."
In November 2003, the Saudi Institute Press, an independent Washington-based organization, reported that Islamic militants were planning attacks on oil installations and Western personnel in the kingdom's Eastern Province. According to the report, four suspected Al-Qaeda militants arrested two months earlier had rented an apartment in Nasariyah, in the oil-rich province, to prepare their attacks.
Saudi officials declined to comment on the report, but it was given some weight
when it was disclosed in October that security forces had broken up a cell of
Al-Qaeda activists who had worked for state-owned Aramco. Officials said then
that up to 10 people were rounded up, including a Saudi-born American citizen.
Details of what the cell had been plotting remain sketchy, but the target was
believed to have been the vast Ras Tanura refinery complex in the Gulf, along
with the pipeline network associated with it. Ras Tanura transfers 5 mm bpd of
oil, more than 6 % of the 80 mm barrels consumed daily around the world.
One US expert said Ras Tanura "is the single most important facility in the
oil industry." On April 5, Russian police discovered 73 kilograms of
explosives hidden near an oil refinery pipeline in the Siberian region of
Khabarovsk. The authorities suspect the cache was part of a terrorist plot to
bomb the installation. A few days earlier in strife-torn Chechnya, separatist
Muslim forces bombed four oil wells run by state-owned Rosneft, setting them on
fire.
On March 8, 2003, separatist rebels in India blew up storage tanks at the Digboi refinery in north-eastern Assam state operated by the Indian Oil Corporation, setting ablaze 5 mm litres of fuel. The rebels also blasted a natural gas pipeline. The refinery was attacked again in June 2003.
In Indonesia, separatist rebels in Aceh province, on the northern tip of Sumatra
overlooking a key tanker route, bombed ExxonMobil's Arun gas processing
terminal, forcing it to shut down for five months. That cost the Jakarta
government $ 100 mm a month in lost export revenue.
In Colombia, leftist rebels of the Revolutionary Armed Forces of Colombia (FARC),
blew up the Cao Limon oil pipeline in January, cutting off valuable exports of
100,000 bpd for two weeks. The pipeline, which carries oil belonging to
Occidental Petroleum, is arguably the most heavily attacked oil facility in the
world -- hit 123 times in 2002. It has been ruptured so many times that local
Indians refer to it as la flauta (the flute).
Iraq may be the oil producer worst affected by terrorist attacks right now, but pipelines in other regions are also regularly sabotaged. In the Caucasus, Nigeria, Colombia, Sudan and Yemen oil pipelines are routinely blown up and the authorities seem powerless to prevent the assaults. Other oil facilities have been attacked in Indonesia, India, Pakistan, Argentina, Ecuador, Guatemala, Georgia, Azerbaijan, Myanmar in 2002-03 as the terrorist threat expands.
But security concerns with pipelines extend to another area of great
vulnerability: the software used to regulate oil and gas flows could be attacked
by cyber-terrorists, a threat highlighted by a report published by the US
National Petroleum Council (Security of Oil and Natural Gas Infrastructures in
the New Economy, June 2001).
Pipelines may be the most vulnerable component of the global oil industry, but more and more are being built in volatile regions. One is the strategic 1,760 km, $ 3.6 bn pipeline carrying Caspian Sea crude from Baku in Azerbaijan via Tbilisi to the Ceyhan terminal in southern Turkey.
The BTC, as the pipeline is known, is scheduled for completion in 2005. A gas
pipeline is scheduled to be built alongside it by 2007. These will run through
the volatile Caucasus, where Islamic extremists and other militants operate, and
the Kurdish region of Turkey, making them vulnerable to attack. Russia and Iran
have opposed the BTC pipeline route because it bypasses their territories and
shuts them off from the Caspian oil boom.
In Iraq, the 950 km pipeline from the Kirkuk oil fields in the north to the oil terminals of Ceyhan, which can pump 800,000 bpd, has been virtually out of action since April 2003 because of sabotage by insurgents opposed to the US occupation.
Sabotage to the pipeline has severed a vital economic artery, seriously impeding
reconstruction efforts. The US administrator in Baghdad, Paul Bremer, a former
head of the State Department's counter-terrorism division, estimates that the
loss of the Kirkuk-Ceyhan pipeline, the main export route from northern Iraq,
costs $ 7 mm a day in lost revenues, or around $ 200 mm a month.
Ed Blanche, a member of the International Institute for Strategic Studies in
London, is a Beirut-based journalist who has covered Middle Eastern affairs for
three decades. He is a regular contributor to The Daily Star.
Source: The Daily Star