Spike in sea piracy threatens offshore oil storage in West Africa
Rising activities of pirates in the Gulf of Guinea is posing serious threats to offshore oil storage model currently adopted by oil multinationals in the wake of supply glut.
This is even as speculations are rife that the coronavirus pandemic may lead to a spike in tanker vessel attacks and possible kidnappings.
The Gulf of Guinea, a key production hub surrounded by eight oil-exporting countries in West Africa, has emerged as a global hot spot, accounting for 21 attacks so far this year, as well as 90 per cent of all kidnappings at sea last year.
The first quarter (Q1) of 2020 saw an increase in piracy around the world with 47 attacks compared to 38 recorded same period last year, according to the International Maritime Bureau (IMB).
A new research by political risk consultancy, Verisk Maplecroft, said most of the attacks occurred in the Nigerian waters, while piracy is expected to rise in 2020 and 2021, expanding further into Neighbouring states, posing serious concerns for shipping and international oil companies.
The number of crew kidnapped off the Gulf of Guinea climbed 50 per cent to 121 in 2019, up from 78 in 2018, and the Gulf has now surpassed more well-known areas such as the Strait of Malacca – a waterway, which separates Malaysia and Singapore from Indonesia, to become the global hotspot.
Senior Africa analyst at Verisk Maplecroft, Alexandre Raymakers, said in a research note that: “This trend will continue in 2020 and into 2021, as regional security forces, hampered by security hot spots across the continent, and a lack of adequate equipment continue to be unable to effectively tackle piracy.
“The prospect of international assistance is equally remote as international shipping routes avoid the Gulf of Guinea. Both regional shipping and oil and gas operators should expect further disruptions to supply chains, export routes and increased costs as more ransom payments will be necessary to liberate crews.”
About 60 per cent of incidents in 2019 occurred in Nigerian territorial waters, specifically in the areas surrounding the Niger Delta, and to a lesser extent, the shipping hub of the Port of Lagos. Raymakers highlighted that the socio-economic factors underpinning these incidents were unlikely to change.
“Driven by their experience fighting in the Delta’s secessionist armed groups and embittered by their lack of access to the oil riches around them, the region will remain an abundant reservoir for budding pirates.
“Although pirates have not noticeably changed their tactics, the regular payments of ransoms have likely emboldened them to seek more attractive targets further out at sea, expanding their net outwards,” he added.
On March 22, seven crew members of the MSC Talia F were abducted off the coast of Gabon, and while most of the spike in cases is expected in Nigerian waters, Verisk analysts also anticipate upticks in the waters around Togo, Benin, Cameroon, Gabon, Equatorial Guinea, and to a lesser extent Ghana.
While pirates traditionally limited their operations to raiding oil tankers in order to sell their hold on the black market, the collapse of oil prices in 2015 forced them to alter their strategy, refocusing their efforts on abducting crews for ransom, Raymakers highlighted.
“IOCs like Shell, ExxonMobil, Total, Chevron and Eni operating out of Gabon, Equatorial Guinea, and Nigeria are particularly at risk of experiencing sporadic yet highly disruptive instances of piracy in their supply chains,” Raymakers said.
Given the recent collapse in global oil prices due to falling demand, Verisk anticipates that pirates are likely to attempt to board static tankers used as offshore storage facilities for unsold production. The ships’ crews and cargo represent “ideal and relatively simple targets for pirates,” the report said.
The indiscriminate nature of abductions means pirates are likely to target IOCs’ supply chains and oil shipments leaving export terminals in the Niger Delta, as evidenced by the abduction of seven crew members on the ExxonMobil-contracted supply vessel Zaro off the coast of Equatorial Guinea in December 2019.
“IOCs will also have to contend with the risk that pirates will seek to abduct workers, particularly expatriates, directly from oil platforms in the Niger Delta.
“The kidnapping of three oil workers from a Chevron oil platform in Ogbele in April 2019, highlights the ease and speed with which such an operation can be conducted.
“Indeed, pirates have easy access to high speed crafts and a plethora of small arms giving them the firepower and agility to conduct such operations,” Raymakers said.