Is BP Worried About Its Algerian Operations?
More than one week has passed since Islamist militants attacked the In Amenas plant jointly operated in eastern Algeria by BP (NYSE:BP), Statoil (NYSE:STO), and state oil company Sonatrach, and the fate of four workers is still unknown.
While BP is unsure when operations can resume, the attack has not made the oil and gas producer consider leaving the country. “We have high-quality assets in Algeria, where we’ve been present for 60 years,” said company spokesman David Nicholas in a statement. “We remain committed to operating there.” Statoil has said that it will stay in Algeria as well.
After all, militant attacks of this nature are not unusual. “If you want oil and gas you have to go to these places,” Gal Luft, co-director of the Institute for the Analysis of Global Security, told Bloomberg. “This is the cost of doing business.”
In countries all over the world, from Colombia to Yemen, oil producing operations have suffered violence for decades because the industry is often regarded as a sign of political and economic power. The most violent incident occurred in 2007 when 72 people were killed by an Ethiopian secessionist group at a facility run by China Petroleum & Chemical Corporation (NYSE:SNP), the publication reported. These incidents, though perhaps smaller in scale than the In Amenas attack, are quite common. Data from the University of Maryland’s Global Terrorism Database showed that there were approximately three attacks made on oil employees each week in 2011…
Violence does not typically prompt companies to end operations. Royal Dutch Shell (NYSE:RDSA)(NYSE:RDSB) and Exxon Mobil (NYSE:XOM) still have facilities in Nigeria despite years of raids, kidnappings, and pipeline bombings by militants that want a larger share of oil wealth, reported Bloomberg. France’s Total SA (NYSE:TOT) has continued operations in Yemen even with ongoing raids, and BP has stayed in Colombia after a pipeline explosion killed 45 people in 1998.
The attack has not discouraged investment in Algeria either. PT Pertamina, Indonesia’s state-owned oil company, has said that it will not back out of a $1.75 billion offer to acquire a stake in three Algerian oil fields from ConocoPhillips (NYSE:COP).
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