Political-security risk in the oil and gas industry : the impact of terrorism on risk management and mitigation

[摘要] ENGLISH ABSTRACT: International oil and gas companies are experiencing an increase in terrorist attacks.After the oil and gas industry became a legitimate target for terrorist groups in the 1990sthe number of attacks have increased yearly, with a spike after the 9/11 attacks. Intoday's interconnected world political risk is not only about the relationship between thehost government and the company. Oil and gas companies may experience risks on atransnational, national and human security level. Because of this, the success of newinvestments often depends on the successful utilization of risk management strategies.This research study focuses on the importance of political-security risk in the oil and gasindustry. This is a risk-management tool to be used before and during internationaloperations; it enables companies to be better prepared to deal with risks that may arise.In January 2013 the oil and gas industry experienced one of its deadliest attacks. The InAmenas gas facility in Algeria was attack by terrorists and in a four-day siege 40 peoplelost their lives. This forced the oil and gas industry to reconsider its focus on securitymanagement. As one of the contractors at the facility, Statoil undertook a thoroughanalysis of security at the site as well as of the company´s corporate security riskmanagement. The report revealed a lack of focus on political-security risk. Accordingly,the main research question in this study concerns the effect of terrorism on politicalsecurityrisk in the oil and gas industry; it specifically analyzes the In Amenas attack.The aim of this study is to answer this question along with two sub-questions, whichcomplement and support the main research question. The first sub-question concernsthe factors that contributed to the attack in In Amenas: why was risk mitigation notsuccessful? The second sub-question looks at the possibilities for international oil andgas companies to mitigate the risk of terrorism; or is this a risk that can only bemanaged? This study argues that political-security risk has not been used to its fullpotential in the oil and gas industry. The oil and gas industry has always focused on sitesecurity, but a broader more holistic approach to risk management has been lacking.However, as a result of the In Amenas incident, the industry has become more willing tohave a new discussion on security and this has resulted in small changes in the waycompanies operate.

[发布机构] Stellenbosch University