Norway’s Statoil, London-based oil giant BP and Spain’s Cepsa started evacuating workers and their families from Algeria on Thursday in the wake of an attack by Algerian troops on hostage-takers at an isolated natural gas facility in what might turn out to be one of the most lethal incidents in the history of the industry.
Statoil said it could confirm the safety of only eight of its 17 employees who had been working at the In Amenas gas facility. Five of those employees escaped Wednesday, and three Algerian employees were found safe Thursday. The company said the Norwegian government was flying in medical personnel.
Statoil and BP decided to evacuate nonessential personnel from two other gas processing plants in Algeria — In Salah and Hassi Mouina. At least three planes were expected to leave Thursday night bound for London, Statoil said, adding that about 40 of its employees would be on board.
Analysts were divided over whether the attack would usher in a period of instability in energy markets, but for now 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.
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.”