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Vulnerable oil operations are tempting targets for terrorists

By Justin Blum
The Washington Post

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Terrorists and insurgents are stepping up attacks on oil and gas operations overseas in an effort to disrupt jittery energy markets, destabilize governments and scare off foreign workers, analysts say.

The attacks have been most intense in Iraq but also have occurred in recent months in Indonesia, Pakistan, India, Russia and Nigeria. In many cases, the attacks are orchestrated by terrorists or rebels, often Islamic extremists, seeking to cause economic disruption or to steal oil to finance their operations, analysts say. Their targets are sometimes pipelines, tankers and workers in areas with varying levels of security.

"You have motive and opportunity, so you're seeing more of this," said Anne Korin, director of policy and strategic planning for the Institute for the Analysis of Global Security, a Maryland-based group that tracks attacks on oil targets. "It's a very effective strategy on their part. ... Oil is really a very target-rich area."

Korin said targets can be found near terrorists' home bases and in areas with less security than in the United States.

Al-Qaida has repeatedly noted the appeal of oil targets, intelligence analysts say. Documents from the terrorist organization, obtained and translated earlier this year by IntelCenter, a Virginia consulting company, calls for "hitting wells and pipelines that will scare foreign companies from working there and stealing Muslim treasures."

Those documents also highlighted as a "practical example" a 2002 suicide-bombing attack on a French-chartered oil tanker off the Yemeni coast, killing a crew member and spilling 90,000 barrels of oil into the Gulf of Aden. Last month, several militants were convicted in Yemen for their roles in the tanker attack.

The attacks come as the world's oil production is stretched close to its limit. Analysts view the persistence of the attacks as a factor that adds pressure on oil prices.

No complete statistics exist on the number of oil and gas targets hit worldwide. In Iraq, the attacks have steadily increased this year from two in January to 18 in September, as of last week, according to the Institute for the Analysis of Global Security in Washington, D.C. In a recent high-profile incident, gunmen killed a top Iraqi oil official in Mosul and attacked a pipeline in the south and a well near Baghdad. The Iraq attacks have caused huge disruptions in the country's oil production and have resulted in millions in losses to the government.

Outside Iraq, armed men stormed a gas tanker anchored in Indonesia in July. The same month, attackers blew up oil and gas pipelines in India. Oil and gas pipelines were blown up in Russia in June and August. Nigerian militiamen trying to wrest control of the oil-rich Niger Delta also threatened yesterday to launch a "full-scale armed struggle" on petroleum-pumping operations in Africa's largest crude-oil-producing nation.
 
"Oil is just very much in the cross hairs around the world," said John Kilduff, senior vice president for energy risk management at Fimat USA in New York, a brokerage unit of Société Générale. "There's no country, there's no production that can come to the rescue of any kind of terrorist attack."

Kilduff said oil markets are most concerned about attacks in Saudi Arabia, the world's largest oil exporter. Those fears have heightened since May, when a group associated with al-Qaida claimed responsibility for an attack on foreign oil workers that left 22 dead in the Persian Gulf city of Khobar. In the first day of trading on the New York Mercantile Exchange after the attack, U.S. benchmark crude futures jumped $2.45, or 6 percent.

The Iraq attacks have multiple purposes, analysts say. Some are designed to curtail exports and cost the country money, adding to the expense of U.S. reconstruction efforts. Other attacks are designed to cut natural gas flowing to power plants as a way to cause power outages and spark dissatisfaction among Iraqis with the country's U.S.-backed government, analysts say.

Pipelines such as those in Iraq and other Middle Eastern countries stretch for hundreds of miles, are often unguarded and make easy targets, analysts say.

The pipelines often are above and below ground, and their locations are typically marked with signs warning against digging. The pipelines often can be repaired in days, depending on location, but frequent attacks can cause severe disruptions, said Neal Adams, a Texas-based consultant who advises companies about terrorism and oil targets.

The attacks on energy targets overseas have been increasing since Sept.11, 2001, analysts say, and can further terrorists' aims by destabilizing the country where the attack occurs and causing economic problems in the United States and other Western nations, analysts say.