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Kidnap and the Energy Industry

LNG Industry,

Kidnap for ransom remains a critical security concern for energy companies. Employees are often viewed as attractive targets because of the perception that the 'rich' sector will be able to afford a ransom settlement. To counteract the risk, training, site protection and insurance all need to be considered. With proper security measures, companies can maintain business integrity and profitability without compromising the health and safety of employees, even in some of the following kidnap hotspots:

Colombia remains a world hotspot for kidnap activity and foreigners remain an attractive target for the militant groups responsible. The left-wing Fuerzas Armadas Revolucionarias de Colombia (FARC) is currently intent on abducting high profile individuals to sabotage the electoral campaign of the incumbent government. It has also demonstrated its intent to target employees in the energy sector as well.

According to AKE Latin America specialist Sean Kane, “The Colombian security forces are better equipped to tackle the threat of militancy, and the kidnap of energy personnel is far less frequent today than in earlier years given the priority the Uribe administration has placed on protecting investments in the industry.” Nonetheless, the energy sector remains at risk of being targeted, and security failings will continue to be exploited by the battle-hardened rebels.

Expansion in the energy sector has accelerated in Iraq over the past year. A reduction in countrywide violence and the imposition of security, particularly in the southern provinces, has led to an improvement in health and safety conditions for energy workers. Nonetheless, kidnap for ransom remains a major issue, with an average of one to two nationals being abducted every week.

The risk may rise in the southern provinces if a security vacuum is created following the withdrawal of US forces over the coming year. Shi’ah militia groups with ties to Iran may attempt to abduct foreign nationals if the international community exerts more pressure on Tehran over its nuclear programme. At present, the outlook is favourable, but energy firms still need to address security issues before establishing operations in the country.

With the recently announced death of President Umaru Yar’adua the political situation has been destabilised in Nigeria. This could have a knock-on effect on kidnapping trends. The average ransom settlement ranges from US$ 204,000 to US$ 2 million, proving a major concern for energy companies. A shaky peace process persists but political instability has provided a security vacuum exploited by a murky blend of armed political and criminal groups.

According to AKE sub-Saharan Africa specialist Hanna-Caroline Imig, “Kidnapping will continue to pose a considerable risk to energy-related personnel as militants seek to pressure the government into distributing more wealth from the sector.”

At present, an average of four foreigners are abducted every month in the country. The majority of incidents are perpetrated by militant groups affiliated with political movements in the Niger Delta. Militants’ confidence in the peace process may be shaken in the wake of the presidential changeover. However, even in the event of conciliation the potential ransom settlements for the release of hostages will continue to provide a major incentive for criminals to continue seizing foreigners.

Kidnap is becoming more of an issue in Venezuela. The vast majority of abduction victims remain local nationals. However, the number of foreign oil companies and personnel operating in the country is set to increase over the coming months. This will bring a greater influx of potentially attractive kidnap victims in the form of foreign workers.

What is most concerning is the seemingly endemic involvement of the authorities in many cases, with the police accused of complicity in a large number of abductions. Until there is major reform in the police force, the issue is unlikely to be settled and companies will have to rely on their own safety measures to ensure the protection of their staff.

The frequency of kidnap incidents has actually decreased in Yemen over the past six months, but the issue remains a major concern, especially for the energy sector, whose employees remain attractive targets for local groups and tribal organisations. At least 220 foreigners have been abducted in the country since 2004, although most have been released unharmed after less than two weeks. Six foreigners are nonetheless still missing in the north of the country, having been held since mid-2009. While they were not involved in the energy sector it demonstrates that local groups have the means and intent to hold foreigners for extended periods in order to secure a ransom payment.

As well as financial payments, which can reach US$ 2 million, hostage takers may also demand the release of prisoners and even the promise of investment and jobs from the government as a suitable settlement. With seemingly endemic political instability, the problem is unlikely to go away soon.

Risk Mitigation
At the very least, companies can help protect their staff by providing them with training and awareness of the risk. If personnel are briefed on the latest intelligence developments and know how to conduct themselves in a kidnap hotspot, it will significantly reduce their likelihood of being singled out for attack.

Site security surveys of accommodation, places of work and transportation routes should also be considered in order to identify weak points and hazardous areas. Close protection may also be necessary in more challenging regions.

While such measures may appear drastic on paper, in reality they ultimately facilitate overseas business in emerging markets and allow the necessary experts to arrive and help build up local industrial networks.

Upcoming Kidnap Conference in London
Andrew Kain, the CEO of AKE Group, will be chairing a two-day conference entitled “Tackling Kidnapping, Hostage Taking and Hijack” on 25-26 May in London. For further details please contact Alison Singhal by email or phone 00 44 (0) 208 348 3704.

Author: John Drake, AKE Senior Risk Consultant,

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