Oilpro | 12 November 2014

Boko Haram—Is Nigeria’s Oil Future in Danger?

Boko Haram is a militant Islamist movement based primarily in northeast Nigeria and was classed as a terrorist organization by the US in 2013. It was founded in 2002 as a Sunni Islamic fundamentalist sect advocating a strict form of Sharia law.

Can Boko Haram really pose a credible threat to the Nigerian oil industry? Since the ascendancy of ISIS in the Middle east, Boko Haram has grown not only in numbers and equipment but also in confidence. Recently, abandoning their usual hide and seek tactics, they took on the Nigerian army and defeated it in Mubi, a city of some 129,000 inhabitants in Adamawa State, forcing the army to retreat in haste and disorder.

Although as yet they have not advanced any further south from their heartlands, Boko Haram have recently issued threats against oil refineries and pipelines specifically in the Niger Delta, threats that should not be ignored.

Shale World | 11 September 2014

Investment in Mexico’s Shale Plays Could Be Slowed by Security Concerns

With the world’s fourth largest shale reserves, Mexico is an attractive prospect for operators and investors hoping to extend the US shale boom south of the border. Geological risk in Mexico’s shale plays is relatively low because the geology is already proven. And now, foreign players are presented with real opportunities to participate as Mexico begins to define the legislation for landmark energy reform announced in 2013, which ended the state energy monopoly, allowing participation from foreign companies.

Despite the attractive opportunities and proven geology, shale gas operators may be reticent to proceed because of high levels of drug-related violence and alarmingly high murder rates in Mexico’s northern regions, which happen to offer some of the country’s most promising shale plays. The Tamaulipas state in particular is an attractive region for shale gas but has the highest number of homicides in Mexico. There have been a number of attacks on oil workers, and this risk could hamper future investment.

Dwight Dyer, a political risk analyst based in Mexico City, commented that “Shale will not take off in Mexico like it did in Texas in the near future. Unless the security situation along the northeastern border improves significantly, smaller companies will probably take their time before jumping in,” he said.

Reuters | 2 September 2014

Algeria’s In Amenas Gas Plant Returning to Normal After Attack

A major gas plant in Algeria where 40 employees were killed by Islamist militants last year is returning to normal operations following a big step up in security, one of the plant’s operators said on 1 September.

A general view of Tiguentourine Gas Plant in In Amenas, 994 miles southeast of Algiers. Credit: Reuters/Louafi Larbi

Norway’s Statoil said the In Amenas plant, which accounted for about 11.5% of Algeria’s natural gas output before the attack, would return to full production in a few months.

Statoil had kept its permanent workers away from the plant, which it operates jointly with BP and Algeria’s Sonatrach, after gunmen raided the site deep in the Sahara desert in January 2013.

They took foreign workers hostage in a 4-day siege that ended when Algerian forces stormed the facility.

“The corporate executive committee has decided that ordinary rotation (of staff) is to be resumed at the plant as all defined security measures have been implemented,” Statoil said in a statement.

There is greater control of people coming near the installations, an airport has been built inside the site, and more barriers have been constructed around the site, Statoil told Reuters.

“The security has been boosted with a permanent military presence on the site, helicopters scanning the region, and the airport is ready to receive the expats who will no longer need to travel the 50 km (31 miles) from In Amenas’ airport to the base,” Bachir Benzergua, head of the union for workers at In Amenas, said.

He said there were already some expats working at the gas plant but that they spent the night at Hassi Messaoud’s oilfield base, some 310 miles away.

A second local source, who asked not to be named, said, “I don’t understand why (expats) they are not back yet, security is OK, and Algerian workers and technicians are making sure production is OK.”

Read the full story here.

Bloomberg | 25 August 2014

Oil Search Temporarily Suspends Well in Kurdistan Because of Turmoil

Oil Search temporarily suspended a well in Iraqi Kurdistan after violence in the region disrupted its ability to get skilled technicians and equipment to the Taza oil project.

Oil Search’s other operations in the area are continuing with the security situation stable, the oil producer said on 18 August in a statement.

“We are continuing to monitor the security situation closely and plan to recommence Taza-2 operations once we are confident that the long-term integrity of our supply chain has been safely re-established,” the statement said.

Journal of Petroleum Technology | 8 August 2014

Control-System Cybersecurity: Staying Ahead of Evolving Threats

The benefits of modern industrial control systems have never been greater. However, as these systems have evolved, the threats to their safe and secure operation have grown. While the return on investment for a complete control-system security audit may be difficult to calculate, the cost of not having a complete plan in place may, if a worst-case condition arises, be impossible to comprehend. A baseline system security image, as a start, allows a vessel owner or operator to understand the security risks.


A diver-support-vessel control system suddenly loses position control and begins to drift while the divers below are put in harm’s way. A programmable–logic controller on the vessel’s dynamic–positioning system had entered an error state and flooded the primary and backup control networks with erroneous data, knocking all connected systems offline. Before control is restored, the vessel is 200 m from its station and one diver has been left unconscious on the template bailout and the other is stranded in the diving bell. The unconscious diver is rescued by his companion from the diving bell once the vessel arrives back on station. Is this a scene from a movie? Unfortunately not; it was a recent, real-world failure. Just as unsettling is the fact that the root cause of the network jamming was never identified.

While viruses, Trojans, worms, and backdoors have been generally associated with Web servers, personal computers, and phones with access to the Internet, serious concerns about cyberphysical attacks on industrial control systems have also been raised—attacks that could result in conditions similar to the loss of positional control just described.

Offshore assets with complex operational capabilities, such as floating production, storage, and offloading vessels; drillships; and semisubmersibles, while not necessarily targets for national–security-based malicious attacks, are nevertheless high-value targets whose compromise may have high-consequence results. Control systems onboard the vessel demand real-time operation, interference with which may result in costly and even life-threatening situations.

Fuel Fix | 14 July 2014

Report: Oil Companies Remain Complacent About Computer Dangers

Oil companies and others with critical infrastructure are ill-prepared to thwart computer system threats, even though more than two-thirds have had at least one significant security compromise in the past year, according to a recent report.

The Ponemon Institute analysis shows that the people in charge of managing critical control systems know their organizations are not ready for the sophistication and frequency of cyberattacks.

Just 17% of the 599 security executives at utility, oil, gas, energy, and manufacturing companies surveyed by the research group said they had deployed most of their major information technology initiatives meant to fend off cyberattacks.

And only 28% of the respondents said security was one of the top five strategic priorities at their organizations.

The New York Times | 3 July 2014

Russian Hackers Targeting Oil and Gas Companies

Russian hackers have been systematically targeting hundreds of Western oil and gas companies, as well as energy investment firms, according to private cybersecurity researchers.

The motive behind the attacks appears to be industrial espionage—a natural conclusion given the importance of Russia’s oil and gas industry, the researchers said.

The manner in which the Russian hackers are targeting the companies also gives them the opportunity to seize control of industrial control systems from afar, in much the same way the United States and Israel were able to use the Stuxnet computer worm in 2009 to take control of an Iranian nuclear facility’s computer systems and destroy a fifth of the country’s uranium supply, the researchers said.

The Russian attacks, which have affected more than 1,000 organizations in more than 84 countries, were first discovered in August 2012 by researchers at CrowdStrike, a security company in Irvine, California. The company noticed an unusually sophisticated and aggressive Russian group targeting the energy sector, in addition to health care, governments, and defense contractors.


SNL | 30 June 2014

Industry Forms Information-Sharing Center To Thwart Cyberattacks

Prompted by the threat of cyberattacks against US energy infrastructure, the oil and gas industry has formed the Oil and Natural Gas Information Sharing and Analysis Center, or ONG-ISAC.

Formed with the help of the American Petroleum Institute, the center will be an industry-owned and -operated organization that enables exchange of information, helps gauge risks, and provides security guidance to US companies, according to a statement by the institute.

BE Digest | 20 June 2014

Experts Analyze Impact of ISIS Advances on Iraq’s Oil Industry

Oil industry analysts said the attack by militants on Iraq’s main Baiji refinery shows the growing impact they are having on the country’s stability, energy supplies, and government revenues.

The pre-dawn assault on the Baiji refinery north of Baghdad by fighters from the Islamic State of Iraq and Syria (ISIS) poses new questions about the security of the oil industry in Iraq, OPEC’s second biggest crude producer.

Q: How are oil prices affected by the violence in Iraq?
Even though the fighting has not yet reached the southern oilfields, which account for 90% of Iraq’s oil production, oil prices rose last week to their highest level for 9 weeks (USD 114.69/bbl for Brent crude) and investors are worried about the long-term prospects for Iraqi oil.

Price rises have calmed since then as Iraq’s oil production has not been significantly disrupted, but climbed back towards USD 114/bbl on 18 June following the refinery attack.

Analysts agree that if Iraq’s oil exports were suspended—it exports 2.5 million B/D—they would be hard to replace on international markets.

If “all of Iraq’s production is lost for a sustained period, the impact on oil prices would be significant,” Morgan Stanley said in an analysts’ note. “OPEC’s effective spare capacity … may be able to replace some of this volume, but at a substantial cost.”

The Paris-based International Energy Agency estimates OPEC has 3.3 million B.D in spare capacity, with 80% of that in Saudi Arabia.

Crude oil sales account for 75% of Iraq’s GDP, according to the International Monetary Fund.

Reuters | 19 June 2014

Oil Majors Cut Staff in Iraq on Fears Violence Will Spread

Some oil companies are pulling foreign staff from Iraq, fearing Sunni militants from the north could strike at major oil fields concentrated in the Shi’ite south despite moves by the Baghdad government to tighten security.

Iraqi officials say the southern regions that produce some 90% of the country’s oil are completely safe from the Islamic State of Iraq and the Levant (ISIL), which has seized much of the north in a week as Baghdad’s forces there collapsed.

The government says 100,000 police dedicated to protecting oil facilities are on high alert and well armed.

But oil firms are taking no chances with the foreign expert staff who could be prime targets for jihadists. And some importers of Iraqi oil are getting nervous about supplies.

“We are just very vigilant in Iraq. Nonessential production people have left, but operations continue,” said Bob Dudley, chief executive at BP, a major investor in Iraq through the giant Rumaila field. He was speaking to reporters in Moscow.

Center for Strategic and International Studies | 19 June 2014

Questions and Answers About Iraq and Global Oil Markets

Q: How is the recent escalation of violence in Iraq impacting global oil markets?

A: Last week’s attack on and seizure of Mosul (Iraq’s second largest city) by armed groups affiliated with the Islamic State of Iraq and the Levant (ISIL), an extreme jihadist group, represents a major expansion of the group’s previously held control of areas near the Syria/Iraqi border and escalated security concerns within Iraq.

Unable to stem the tide of the incursion thus far, the Maliki government asked Parliament to declare a state of emergency and requested assistance from the US military as well. The US Embassy is already evacuating certain employees and sending in additional troops to bolster security at the Embassy, recent press reports indicate that several energy companies operating in southern Iraq have done the same, and indications are that the ISIL forces have recently take over a major refinery in Baiji, a town north of Baghdad (though the refinery provides products to the domestic market).

The deteriorating security situation in Iraq and the prospect of an even broader humanitarian and regional political crisis is at the forefront of an already tense geopolitical landscape this week with Russia cutting natural gas supplies to Ukraine and ongoing territorial posturing between China and Japan in Asia. Given the complexity of the ethnic, national, and regional disputes and alliances within in the Middle East, however, the current situation in Iraq has clear potential to follow a rapid and dangerous trajectory.

Bloomberg | 16 June 2014

UglyGorilla Hack of US Utility Exposes Cyberwar Threat

Somewhere in China, a man typed his user name, “ghost,” and password, “hijack,” and proceeded to rifle the computers of a utility in the northeastern United States.

He plucked schematics of its pipelines. He copied security-guard patrol memos. He sought access to systems that regulate the flow of natural gas. He cruised channels where keystrokes could cut off a city’s heat or make a pipeline explode.

That didn’t appear to be his intention, and neither was economic espionage. While he was one of the Chinese officers the US charged last month with infiltrating computers to steal corporate secrets, this raid was different. The hacker called UglyGorilla invaded the utility on what was probably a scouting mission, looking for information China could use to wage war.

UglyGorilla is one of many hackers the FBI has watched. Agents have recorded raids by other operatives in China and in Russia and Iran, all apparently looking for security weaknesses that could be employed to disrupt the delivery of water and electricity and impede other functions critical to the economy, according to former intelligence officials with knowledge of the investigation. The incursions spurred a debate in the Obama administration over whether and how to respond and raised alarms among lawmakers briefed on the incidents.