Tipping point as oil piracy spreads from Nigeria to Angola


The growing wave of piracy attacks in the Gulf of Guinea, predicted to double in 2013, may have reached a tipping point as it recently spread south towards Angola, Africa’s second-largest oil producer. Recently, there was a frightening incident in West Africa where a gang of Nigerian pirates reportedly stole a tugboat and sailed south into Angolan waters on January 18, 2014 where they attacked MT Kerala, an oil products tanker a few miles off the coast of Luanda, the capital of Anglo. The Gulf of Guinea, a major commodities route, which covers an immense area extending from the Guinean coast to offshore Angola, has now become a piracy hotspot, where pirates attack oil tankers and other car¬go vessels. They seize large oil tankers and load it onto other ships to sell on the lucrative black market.

The spate of attacks is surging as countries in West Africa are rapidly developing their oil and gas infrastructure to capitalise on existing assets and exploit new offshore discoveries.

West African piracy has in recent years spread from the coasts of Nigeria to the shorelines of many of the 11 West African countries such as Gabon, Cameroun, Togo and Benin that border the Gulf.

A dangerous trend

While the number of pirate attacks worldwide was down to a six-year low in 2013, thanks to a significant fall in incidents off Somalia, attacks spiked in West Africa largely driven by Nigerian pirates.

Incidents off West Africa accounted for almost one fifth of the total attacks worldwide in 2013, according to the annual global piracy report from International Maritime Bureau (IMB).

Piracy attacks off Nigeria oil-rich coast increased to their highest level since 2008, the IMB said. With 31 pirate attacks recorded, Nigeria was second to Indonesia, which saw the most attacks last year with 106.

In its report on piracy and armed robbery prone areas, the maritime bureau warned mariners to be cautious and take necessary precautionary measures when transiting areas including Nigeria, saying “all waters in Nigeria remain risky. Vessels are advised to be vigilant as many attacks may have gone unreported.”

Much of the piracy that affects West Africa is a product of the disorder that surrounds the regional oil industry, says a recent United Nations report, entitled ‘Maritime Piracy in the Gulf of Guinea’.

“A large share of the recent piracy attacks targeted vessels carrying petroleum products. These vessels are attacked because there is a booming black market for fuel in West Africa. Without this ready market, there would be little point in attacking these vessels,” the report said.

Another sore point for Nigeria’s oil industry

The surge in piracy attacks off Nigerian waters is putting Nigeria’s beleaguered oil and gas industry at great risk.

Analysts have said that the rise in piracy attacks, especially as pirate gangs hijack large tankers at sea, siphoning off their oil cargoes into smaller ships, could increase the risk of doing business in the country.

Off Nigeria’s 530 miles of coastline, where dozens of tankers transit every day, attacks have pushed up insurance costs for shipping firms and oil companies, with the potential of scaring investors away from the industry due to increasing operating costs and losses resulting from crude theft by offshore pirates.

Bolaji Akinola, chief executive officer, Ships and Ports, said the surge in piracy attacks would hamper investment in the oil and gas industry. “Why will I want to invest if I am not sure of the safety of my investment? If I do that, it will be at a great cost. Already, insurance premium is very high due to increasing pirate attacks. The country has been rated war-risk zone by marine insurers. Fighting illegality in our waters should not be rocket science. The people perpetrating it are not invisible. Government should muster all its resources to curb this menace,” he said.

Paramount Group, Africa’s largest privately owned defence and aerospace business, said there were over 360 attacks on merchant shipping in the Gulf of Guinea as at November 2013, adding that without action by governments to protect offshore assets the figure could rise to over 700 incidents in 2014.

The Group added that piracy threatens more than just oil and gas assets. “Criminal gangs at sea are responsible for drug trafficking, arms smuggling, dumping of toxic waste, illegal bunkering and illegal fishing. This is in addition to the problems caused by the profits from piracy that finance other criminal activity such as terrorism and human trafficking that have a significant human and financial cost” says James Fisher, chief executive officer, Paramount Naval Systems.

The United Nations Security Council and various United States think tanks had recently warned that left unchecked, the expanding insecurity in the Gulf of Guinea risks significantly endangering global trade, regional development and stability as the region becomes more sought after for oil and its strategic location.

Searching for solution

In June last year, West and central African leaders in a summit held in Cameroun to address escalating piracy in the region, called for the establishment of an international naval force in the Gulf of Guinea to cut down on security threats.

In a bid to better deal with the growing number of pirates operating on the coast, Nigeria has erected eight towers along the coast equipped with cameras that can spot ships out to 48 kilometers at sea. The towers have been placed at the areas of highest offshore activity including waters off the major port of Lagos and oil export terminals at Bonny and Brass.

“Cooperation and capacity-building among the coastal states in this region is the way forward and urgently needed to make these waters safe for seafarers and vessels,” Pottengal Mukundan, IMB director said in a recent report.

Via: http://businessdayonline.com/

Original Article