The Oil and Gas Industry - Terrorism Threat Assessment

(International Poitics - Risk & Threat)

Countries and industries worldwide remain on high alert for potential terrorist attacks. As a former British Diplomat with extensive on the ground experience in many conflict regions and now as a critical risk advisor I've made it my professional work to advise companies and industries on how to best prepare for such incidents.

Last year, Oilpro.com's staff (sadly no longer with us) sent me several questions around the O&G industry's preparedness for the threat of terrorism. The answers I gave then (with subsequent additional updates) are I feel even more relevant one year on, The following are my thoughts on this critical issue.

What is the current state of readiness of the O&G industry to respond to terrorist attacks?

Terrorist attacks, although the major concern, are not the only threats the industry faces. Additional areas of focus should also be placed on unconventional opponents such as pressure groups, activists, single issue zealots, disgruntled employees or criminals whether white collar, cyber hackers, organized or opportunists. Therefore, response plans to deal with these additional threats should also be in place and regularly updated.

How many companies currently have response plans in place?

Most, if not all the large players have extensive response plans in place as a matter of course and have had these plans in operation for a number of years. Speaking to a number of contacts in the industry, I am assured that these plans are regularly updated through practice and simulation at either tabletop exercising or front end on-the ground exercises. Of course not being an industry insider, I am not privy to what actual planning modules they employ, nor for the sake of security should I be. But having said that, I have been involved in dealing with the consequences when plans do not work.

What I found is that strategic response planning at HQ level is highly developed. The major players employ large numbers of security professionals, university graduates and professors, ex-military and government experts to formulate their response modules. These processes however do have their flaws. In my opinion, they are far too reactive – with the emphasis being always in dealing with events after they have occurred. They should be more proactive in dealing with volatile regions and situations before matters escalate and reach a tipping point. Therefore, companies should be modeling data not only on how they would respond as a result of high impact terrorist attacks but also on monitoring developing volatile situations locally. It is vital that tools are developed that will help to evaluate decisions and weigh potential policy options and their consequences again before a crisis occurs.

Another area that disturbed me was the lack of decision making at the local level with too much emphasis on waiting for decisions on potentially serious and dangerous evolving situations from corporate HQ’s usually many thousands of miles and several time zones away. There seems a great reluctance on the part of corporate HQ’s to delegate decision making and immediate action procedures downwards to a local level on the ground.

Another area I believe is overlooked or not considered appropriately is the lack of a sustained involvement exploiting extensive local knowledge sources, the building up of a key human contact base within a country, full and regular dialogue and cooperation with military and diplomatic missions, more intelligence sharing between companies operating in the same region, the introduction of early warning systems and shared communication protocols are key. There are many other additional productive areas of enhancing this local dimension that I would urge companies to embrace.

What areas of the industry (downstream, midstream, upstream) do you believe are the most vulnerable to attacks?

In days gone past it was relatively easy to identify what areas of the industry were most at risk and what measures should be put in place to try and protect them. However, in this climate of increasing global terror and the emergence of more sophisticated asymmetric attacks, no sector is totally secure from the new uncertainties of how these attacks will develop and from which direction they will come. The main perceived threat is still the quasi-military type attacks from identifiable terror groups we have seen on installations in the past but now we have to deal with a new, added phenomena of so called “clean skin” terrorists who fly under the radar.

Terrorist attacks on energy infrastructure, be it fixed installations, the supply chain or more recently electronic cyber attacks against process control networks are attractive targets. These attacks serve to achieve maximum economic impact through the disruption or cessation of production. However, one must bear in mind that although attacks have taken/are taking place, terrorist groups such as ISIS or Al-Qaeda are cautious about attacking specifically oil targets as they see these targets, not as opportunities for destruction but rather as opportunities for occupation and production to generate revenue streams to fund their ongoing and future activities.

What impacts would such attacks on O&G infrastructure have on broader national security?

I would hope that the O&G industry are taking a more focused and long term look at how they would deal with any future attacks. Global terror in whatever shape or form it takes is only going to grow in the coming years and it will expand its area of operations globally as more and more individuals and groups become radicalized.

For example even the destruction of the ISIS caliphate in Syria and Iraq does not solve the problem. The problem is the ideology of radical Islam, which is now deep rooted and knows no borders and continues to spread, drawing in recruits and other Islamist groups in a wide range of countries.

Intelligence, both sharing and implementation is the key. There is no doubt that increased, further terrorist attacks could cause massive disruption both in production levels and prices for the O&G industry. To combat this, consumer and major producer nations and energy companies, need to cooperate and communicate better to prevent violent disruptions and post-disruption economic downturns. Strategic intelligence sharing and security cooperation can do much to restore the

confidence of governments, corporations and consumers.

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