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The New Security Risk
                                  Excerpt


                Oil & Gas Companies in the Era of Terrorism




© Jan Havranek, 2009
The following slides are an excerpt from a larger presentation. Please contact
me at jan.havranek [at] gmail.com if you would like to receive the full version
with an overview of:

• Trends in energy-related attacks in the 1970s and 1980s
• Contemporary motivations behind non-state actors’ attacking of the oil and gas
  industry
• Results of an analysis of 1.161 attacks on energy infrastructure with implications for the
  oil & gas industry, including the full data set

In addition, the presentation includes 2 case analyses on:
• Ideological considerations underlying al-Qaeda’s strategy to harm the Western
  economy through energy sector targeting
• Efforts of Somali Pirates to attack the vital energy routes in the Gulf of Aden
Linking the traditional political risk to non-state
actors defines the New Security Risk

                              ...refers to a politically motivated action that
                            produces changes in one company’s economic
                                                                    outcomes


                       ...involves direct or indirect violence or use of arms
                                           against one company’s operations


                            ...highlights the ability of transnational non-state
                           actors to target corporate interests anywhere in
                                              the world and in the value chain



© Jan Havranek, 2009                                                             3
Oil companies face the new kind of security risk
for two reasons




© Jan Havranek, 2009                               4
The “Cold War” terrorists and freedom fighters
focused evenly on governments and business
- 1n 1976-78, 50% of all terrorist acts worldwide were directed against
   business personnel, equipment, and facilities

- Techniques used by non-state actors against business included:
  ‣    Kidnapping of executives or their families
  ‣    Attacks on facilities
  ‣    Assassinations
  ‣    Bombings
  ‣    Other (e.g. business disruptions)

- Kidnappings were carried out for ransom; victims would usually survive
- Majority of the attacks took place in Europe and Latin America
Source: Alexander, Yonah, and Robert A. Kilmarx. 1979. Political Terrorism and Business: The Threat and Response. New York: Praeger.
McGuire, E. Patrick. 1979. International Terrorism and Business Security. Information Bulletin. The Conference Board.


© Jan Havranek, 2009                                                                                                                   5
Contemporary insurgents embedded the targeting
of energy infrastructure into their strategies
- Some groups attack oil companies to raise awareness of their social
   conditions or political status (e.g. Nigeria)

- Other groups are purely anti-systematic with broader ideological goals
   (e.g. al-Qaeda)

- With the decline of state-sponsorship of terrorism, rebels often resort to
   fund-raising through violence (e.g. Somali Pirates)

- Attacks on energy infrastructure take place during an existing conflict
   (e.g. War in Lebanon, 2006)




Source: Based on an analysis of 1.161 incidents recorded by the Worldwide Incident Tracking System in 2004-2008.


© Jan Havranek, 2009                                                                                               6
The majority of EI attacks hit the oil & gas industry
- Oil & gas pipelines represent the facility most at risk




                                                                                                                    See Appendix 3 for a full data set




Source: Based on an analysis of 1.161 incidents recorded by the Worldwide Incidents Tracking System in 2004-2008.



© Jan Havranek, 2009                                                                                                                                     7

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The New Security Risk - Excerpt

  • 1. The New Security Risk Excerpt Oil & Gas Companies in the Era of Terrorism © Jan Havranek, 2009
  • 2. The following slides are an excerpt from a larger presentation. Please contact me at jan.havranek [at] gmail.com if you would like to receive the full version with an overview of: • Trends in energy-related attacks in the 1970s and 1980s • Contemporary motivations behind non-state actors’ attacking of the oil and gas industry • Results of an analysis of 1.161 attacks on energy infrastructure with implications for the oil & gas industry, including the full data set In addition, the presentation includes 2 case analyses on: • Ideological considerations underlying al-Qaeda’s strategy to harm the Western economy through energy sector targeting • Efforts of Somali Pirates to attack the vital energy routes in the Gulf of Aden
  • 3. Linking the traditional political risk to non-state actors defines the New Security Risk ...refers to a politically motivated action that produces changes in one company’s economic outcomes ...involves direct or indirect violence or use of arms against one company’s operations ...highlights the ability of transnational non-state actors to target corporate interests anywhere in the world and in the value chain © Jan Havranek, 2009 3
  • 4. Oil companies face the new kind of security risk for two reasons © Jan Havranek, 2009 4
  • 5. The “Cold War” terrorists and freedom fighters focused evenly on governments and business - 1n 1976-78, 50% of all terrorist acts worldwide were directed against business personnel, equipment, and facilities - Techniques used by non-state actors against business included: ‣ Kidnapping of executives or their families ‣ Attacks on facilities ‣ Assassinations ‣ Bombings ‣ Other (e.g. business disruptions) - Kidnappings were carried out for ransom; victims would usually survive - Majority of the attacks took place in Europe and Latin America Source: Alexander, Yonah, and Robert A. Kilmarx. 1979. Political Terrorism and Business: The Threat and Response. New York: Praeger. McGuire, E. Patrick. 1979. International Terrorism and Business Security. Information Bulletin. The Conference Board. © Jan Havranek, 2009 5
  • 6. Contemporary insurgents embedded the targeting of energy infrastructure into their strategies - Some groups attack oil companies to raise awareness of their social conditions or political status (e.g. Nigeria) - Other groups are purely anti-systematic with broader ideological goals (e.g. al-Qaeda) - With the decline of state-sponsorship of terrorism, rebels often resort to fund-raising through violence (e.g. Somali Pirates) - Attacks on energy infrastructure take place during an existing conflict (e.g. War in Lebanon, 2006) Source: Based on an analysis of 1.161 incidents recorded by the Worldwide Incident Tracking System in 2004-2008. © Jan Havranek, 2009 6
  • 7. The majority of EI attacks hit the oil & gas industry - Oil & gas pipelines represent the facility most at risk See Appendix 3 for a full data set Source: Based on an analysis of 1.161 incidents recorded by the Worldwide Incidents Tracking System in 2004-2008. © Jan Havranek, 2009 7