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Energy Giants Get Their Guard Up Against Terrorism

The In Amenas Gas Plant facility, Algeria
Kjetil Alsvik | Statoil
The In Amenas Gas Plant facility, Algeria

With terror attacks on oil facilities becoming an increasingly deadly trend, energy firms have begun taking their security into their own hands.

Norwegian energy company Statoil said last week it is forming a special operations division to handle emergency operations in response to a terrorist attack on a natural gas facility in Algeria. The company said it would double the number of employees it had designated for existing security operations after reviewing the measures in place at the In Amenas gas facility. A January attack there left employees from Statoil and BP dead in what al-Qaida said was a response to French intervention in Mali. With the economy just as much a viable target as any, counter-terrorism may becoming more than just the military's game.

A January attack by a division of al-Qaida in the Islamic Maghreb left several energy company employees and foreign fighters dead. The Algerian attack had the logistical support of Islamic fighters who traveled across the western border from Libya, still unsettled nearly two years after the revolution.

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Operations at In Amenas resumed at a limited capacity after the attack for owners Statoil, BP and Algeria's state energy company Sonatrach. France's Total said it too was spending more on industry-wide security operations since the January attack. Natural gas production has declined since roughly 2005 for Algeria, and lingering instability in the region suggests a turnaround isn't likely in the medium term.

BP said it has its own concerns, noting it was holding back on natural gas projects in the country because of the security situation there. Algerian Energy Minister Youcef Yousfi told a Houston energy conference in March that Algeria "remains a stable country" despite the terrorist attack. He said the country wasn't discouraged by the incident and remained committed to developing its natural gas sector. Algeria has enacted policies that would give foreign investors an incentive to take a closer look at unexplored fields in the country. Algeria in 2011 produced around 2.9 trillion cubic feet of gas and has since worked to return to its earlier output levels.

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Statoil said it would appoint an official to lead security operations by July. The security team is part of what Statoil said was a "broader response" to the tragedy in Algeria. British Foreign Secretary William Hague said Friday the attack in Algeria shows that al-Qaida may be weakened, but it's not yet out of the picture. He complained some members of the international community aren't willing to take on the responsibility to tackle the threat themselves, however. With the international economy depending on a reliable source of energy to keep churning, Statoil's actions suggest the energy sector may start to take on some of that burden itself.

—By Daniel J. Graeber of OilPrice.com

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