Oil companies: more than 22 workers still unaccounted for in Algeria
By Steven Mufson,
The companies whose workers were taken hostage by Islamic militants at a gas compound in Algeria on Wednesday say they have evacuated some employees and confirmed the whereabouts of others, but the status of more than 22 individuals is still unknown.
Norway’s Statoil, which along with London-based BP and the Algerian state oil company Sonatrach runs the isolated Tiguentourine natural gas facility, said the situation of eight employees at the plant “remains uncertain.”
One Statoil employee “came to safety” overnight and was treated at a hospital in the nearby town of In Amenas, the company said in a statement Friday. Five employees who escaped the plant Wednesday have been evacuated to Majorca, the company said, and three Algerian Statoil workers who escaped are safely in the capital, Algiers.
Japanese engineering firm JGC Corp. said it still had not been able to account for 14 of its employees at the plant, according to a Reuters report.
BP said there is “a small number of BP employees” whose location and situation “remain uncertain,” adding that the company was “working with the Algerian government and authorities to confirm their status.”
BP said it had teams on the ground working on the situation. Overnight, the company said, it began bringing non-essential workers out of Algeria. Three flights left Algeria Thursday, carrying 11 BP employees alongside several hundred staff from other companies, including Spain’s Cespa. The first flight arrived in London, while the other two landed in Palma, Majorca. Evacuees on those planes are slated to travel to their final destinations Friday.
“A fourth plane is expected to transport further staff out of the country today and we will arrange further flights as necessary,” BP said.
Statoil and BP are also evacuating nonessential personnel from two other gas processing plants in Algeria, In Salah and Hassi Mouina. Statoil said about 40 of its employees would be on board the planes that left Algeria Thursday.
A medically equipped U.S. military aircraft was sent to Algeria Friday to evacuate between 10 and 20 people who had been held hostage at the gas plant, said Tom Saunders, a spokesman for the U.S. Africa Command, which is based in Stuttgart, Germany. Saunders said the former hostages would be transported to “a U.S. facility” in Europe, but he declined to identify where, citing security concerns. He said the rescued individuals were of several different nationalities, but he could not give details of their medical condition or confirm whether Americans were among them.
Analysts were divided over whether the attack — which might turn out to be one of the most lethal incidents in the history of the oil and gas industry — would usher in a period of instability in energy markets.
On Thursday, markets were calm. In New York exchanges, the benchmark West Texas Intermediate grade of crude oil advanced 0.7 percent to $94.87 a barrel, its highest level in four months. But the increase was seen as a response to strong data about the U.S. economy and a drop in U.S. crude inventories. In late morning trading Friday, the price edged down 42 cents, to $95.07 a barrel for February delivery.
Algeria, a member of the Organization of the Petroleum Exporting Countries, produces more than 1.2 million barrels a day of crude oil and is the third-largest supplier of natural gas to Europe, according to the Energy Information Administration. Many of its fields are in the desert. The In Amenas gas field lies near the Libyan border, more than 800 miles from Algiers, the capital, and some analysts said Libyan fields could be even more vulnerable.
“All these facilities are in remote areas and are absolutely unprepared for this,” said Fadel Gheit, an oil analyst with Oppenheimer & Co. “The borders are very porous. There is nothing there except hundreds of miles of desert. We complain about the Mexican border. Welcome to the Sahara.”
He said there are about two or three dozen similarly isolated oil and gas installations and added that now they were all targets. “We’ve just opened the Pandora’s box,” he said.
Other analysts were less alarmed. Greg Priddy, global oil analyst at the Eurasia Group, said the isolated location of Algeria’s oil and gas fields would make them easier to secure and defend. He said that during the bloody civil war in Algeria in the 1990s, there was little disruption in oil and gas supplies because government troops guarded key facilities and ultimately crushed an Islamist uprising.
“Part of the reason this incident was possible is that the government didn’t have the numbers of security forces it needed there, and now this will put them on a much higher state of alert,” Priddy said.
Algeria’s state-owned oil and gas company Sonatrach plays a major role in the North African country’s infrastructure. Oil and gas provide 60 percent of Algeria’s budget revenue. In November 2011, Sonatrach appointed its fourth chief executive in two years as it struggled to recover from a 2010 corruption investigation that resulted in the dismissal of much of the company’s senior management team, the EIA said.
BP, which has been operating in Algeria since the 1950s, says on its Web site that it is the largest foreign investor there. The In Amenas project, a joint venture of BP, Sonatrach and Statoil, came online in 2007 and produces natural gas and gas liquids, BP said.
Other international firms in Algeria include U.S.-based Anadarko Petroleum, which resolved a long-running tax dispute with the government last year, and ENI, the Italian oil giant. It remained unclear whether this incident would chill foreign investment.
“The whole of Statoil is strongly affected by the situation in In Amenas,” Statoil chief executive Helge Lund said in a statement. “The situation is still unresolved, uncertain and very serious.”