Oil & Gas Industry Terror Risk Needs Attention
NU Online News Service, Dec. 8, 1:33 p.m. EST?The oil and gas industry risk management requires constant alertness to the threat posed by terrorists, a new report by a brokerage firm advises.[@@]
According to the study by Aon Limited, a subsidiary of Chicago-based Aon, oil industry targets include oil and gas installations, pipelines, terminals, and distribution systems.
The report, based on an analysis of Aon’s database of terrorist attacks, identifies explosive attacks on oil and gas pipelines occurring in 10 different countries around the world between 2000 and 2004.
The increased risk of global terrorism from groups such as al-Qaida has prompted many companies to improve security measures, said Aon. But, for most, this poses a number of difficulties given the unpredictable size and nature of the risk involved.
A failure to address these threats by the board of any organization will have a material impact on financial valuation and employer liabilities, it went on to say.
Aon advised that executives must identify, acknowledge and take measures to reduce their risk exposure and manage the crisis should it occur.
The motives for such attacks disclosed in the report vary considerably, Aon said. In some cases, the powerful explosive nature of oil and gas is seen to make any attack dramatic and more damaging.
Other attacks, the report said, are brought on by the perpetrators’ view that energy companies embody all the values of Western society.
In certain circumstances, oil and gas are seen to be so critical to the economies of countries with no other resources, that even the smallest attack can have a severe impact.
Justin Priestley, a director of Aon Crisis Management, said, “The nature of the risks to which [corporations] are exposed has shifted significantly in recent years. This report outlines the very real and dangerous threats that global terrorism poses to companies operating in the oil and gas sector.”
“Although many people may feel that attacks of this nature are very difficult to quantify,” he continued, “it is vital that the measures in place are efficiently tested through a full risk analysis and damage assessment so as to [minimize] the financial impact should such terrorist events occur.”