Countering Petroleum Security Risks

Abstract Acts of violence directed at the oil industry continue to escalate on a worldwide basis. To reduce financial losses and enhance the security of employees and assets, executives are advised to take the following proactive steps:Conduct an independent threat assessment to determine if current security systems are adequate to protect against potential terrorist/extremist threats and the loss of property;Implement advanced security systems and procedures based on identified risks to reduce violent attacks and minimize liability concerns;Regularly reassess security threats and update crisis management/business continuity plans to manage risks and minimize costly interruptions in the exploration and production of oil. Introduction Businesses are most often the target of terrorist groups, according the U.S. State Department. And of all businesses, the petroleum industry is the most likely to be attacked. Of approximately 1,800 terrorist incidents that were recorded from 1987 to 1997, about half were directed at business interests. In some regions of the world, such as South and Central America, private industry is the overwhelming target of choice by extremist groups. Throughout Latin America in 1997, there were only three terrorist attacks against the U.S. government, one private citizen incident, and 87 violent acts directed at private companies. The petroleum industry is uniquely vulnerable to acts of terrorism and crime. While this paper focuses largely on the terrorist threat, it should be clearly understood that a disgruntled employee could easily contemplate or undertake actions which would relegate him/her to the standing of "insider terrorist." Multinational oil companies have offices worldwide, many of which are located in the backyard of known terrorist groups and in regions that regularly suffer political and economic upheaval. As a symbol of great wealth and power, the oil industry is often the target of political or environmental campaigns. Human rights groups and leftist guerillas blame oil revenues for breeding corruption and artificially propping up despots. Through attacks on petroleum companies, they seek to reduce the flow of petrodollars and thereby force reforms and/or topple corrupt regimes. Many pipelines transverse ecologically fragile terrain, putting companies at odds with environmental groups. Remote oil fields and pipelines that stretch hundreds of miles are difficult to defend from attacks. In dense jungles, for example, terrorist groups can bomb pipelines then slip away with little fear of being caught. Combining all of these factors1, it is easy to understand why the petroleum industry faces unusually difficult challenges in protecting its employees and assets from acts of violence. To develop strategies to safeguard the petroleum industry, it is instructive to examine tactics from a terrorist's perspective. It is generally understood that terrorist groups select targets based on an internal analysis. When considering the use of terror, they weigh the question: Will an attack precipitate sufficient damage and/or anxiety, and thus achieve its goal, without triggering a backlash? To misjudge the assessment can risk disaster. Thus, one can surmise that an attack by such a group is carefully calculated and planned in advance of the incident.