generalspeaking

Energy Export Destabilization

Algeria has good reason to feel itself rather put-upon. On the other hand, it is fairly surprising that they were taken unawares by the hostage-taking at its gas field close to the border with Mali in the remote Sahara. The Ain Amenas BP site was said to have been well guarded. Algeria is hugely dependent on foreign investment and international trust in the security it provides, giving no quarter to those who dare to threaten its security.

Perhaps they were feeling a little relaxed about matters, unaware that though fanatical Islamists were devoting their energies in Mali, diabolical plots were being laid. Although, during the hostage-taking crisis the al-Qaeda-affiliated jihadists claimed to have targeted Algeria because it had allowed France fly-over permission into Mali, it seems obvious from what has so far been gleaned, that this was a plot that had long been in the planning stages.

If the evidence of infiltration, of jihadis being among those hired by BP management to work in its service sector at the Ain Amenas site is the sole indicator that this was a plan that would have taken quite a while to put into action, it is sufficient unto the day. Sonatrach, the Algerian state oil company operating the gas site with BP and Norway's Statoil, announced that the entire refinery site had been mined.

"The oil and gas installations were even more secure than the army barracks, they were oases in an unsafe country. That they finally got to them indicates a very substantial threat", warned James Le Sueur, history professor at University of Nebraska in Lincoln, author of Algeria Since 1989 Between Terrorism and Democracy.

This hostage-taking event is not something that Algeria feels it can afford. Its unequivocating attack against the terrorists speaks to its determination to give no quarter to those that threaten its equilibrium. Algerians themselves had their fill of destabilization throughout the civil war that embroiled them in death and destruction in the 1990s. That memory remains an unhealed wound.

The country is the third largest gas supplier to the European Union of 27 nations. Energy exportation represents 70% of tax revenue and 98% of the country's exports, according to the African Development Bank. Slack security in the Sahara could impact drilling. Which would affect producers including France's Total SA, Italy's Eni SpA and Statoil.

"Algeria lives off oil and gas. To strike against that is to strike against Algeria as a whole. If other operations take place, this will have a very dangerous effect on the Algerian economy", explained Ahmed Amdimi, professor of political science, University of Algiers, in the wake of Spain's Cia.Espanola de Petroleos SA, Statoil ASA and BP evacuating their workers. It is not just the gas; 1.2 million barrels of oil daily is produced in Algeria.

Anadarko Petroleum Corp. and Conoco Philips Ltd., two American oil and natural gas producers with investments in Algeria are carefully monitoring developments. BP's partner at
Ain Amenas, Statoil, has evacuated some of its employees. Cepsa evacuated theirs from two sites within 250 kilometres of the Ain Amenas gas development.

"Given the importance of Algerian exports to Europe, and particularly Italy, the major players are vigilant. If an internal conflict should erupt in Algeria, then we'd be looking at a different scenario that would pose a serious risk to gas supply", said Nicolo Sartori, energy and defence analyst at Rome's Institute of International Affairs.

It does look to some analysts as though this might be the start of an Algerian problem that will transform the country's government into one soon struggling to contain foreign Islamist elements with links to al-Qaeda in the Islamic Maghreb, while the country's own, low-key Islamist groups have been singularly well-behaved, with no suspicions whatever having fallen upon their intentions.

The jointly-run BP gas complex at Ain Amenas, Algeria, where an unknown number of contractors have been killed or kidnapped in what is believed to be a reprisal for French military intervention in neighbouring Mali. Photograph: -/AFP/Getty Images

Labels: Africa, Crisis Politics, Defence, Energy, Natural Resources, Security, Terrorism

posted by Pieface @ Monday, January 21, 2013