Rising piracy spells doom for Nigerian oil, gas industry

The ever-increasing spate of attacks on oil vessels and crew members in Nigerian waters may cause further loss in investments in the oil and gas industry.
This is even as the delay in the passage of Petroleum Industry Bill (PIB) has made several oil majors hold back on investments.
According to the global piracy report of the International Chamber of Commerce (ICC) International Maritime Bureau (IMB), Nigeria accounted for 27 incidents in 2012, with four vessels hijacked, 13 vessels boarded, eight fired upon and two attempted attacks.
Only 10 incidents were reported in 2011, including two hijackings.

Pirates had attacked an oil industry supply vessel in Nigerian waters last week, kidnapping three crew members.
Confirming the incident, security sources said that the trio, the Captain, Chief Engineer and Second Engineer, were abducted last Monday when gunmen boarded the Malaysia-flagged Armada Tuah 22 around 50 nautical miles (90 kilometres) off the coast of the Brass region in the Niger Delta.
One of the kidnapped sailors, according to sources, is an Indonesian.
The Armada Tuah 22, the vessel involved in the latest recorded piracy attack in Nigerian waters, is a tugboat contracted to supply an offshore oil platform.
This year has seen a spike in piracy off Nigeria’s oil-rich coast, according to a recent Reuters report, reflecting that gangs are willing to venture further afield and use more violent tactics, increasing the risk of doing business in the country.

Oil majors Exxon Mobil and Shell said last month that security was a major factor in making Nigeria one of the most expensive oil-producing countries to operate in.
Oil and shipping companies have to hire crisis management teams, pay higher insurance premiums and face the prospect of ransom payments, as well as brace themselves for damage to their reputations.
Last month, there were no fewer than five attacks in Nigerian waters.

“The recent upsurge in maritime kidnaps off the Niger Delta … has not been witnessed since 2010,” Maritime Risk Analyst at Control Risks, Tom Patterson, said.
The prime suspects for most attacks are Nigerian oil gangs, who already carry out industrial scale crude theft called bunkering in the restive onshore Niger Delta swamps.
Minister of Petroleum Resources, Mrs. Dieziani Alison-Madueke, has blamed an international criminal syndicate for oil theft, which can amount to 150,000 barrels per day (BPD).
Analysts posit that Nigerian security officials and politicians are complicit in oil theft and piracy.
“There are many top people in Nigeria involved in commissioning these attacks and sharing the profits,” head of United States (US) consultancy C-Level Maritime Risks, Michael Frodl, said.

 

 

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