Attack at Algeria Gas Plant Heralds New Risks for Energy Development



The siege by Islamic militants at a remote Sahara desert natural gas plant in Algeria this week signaled heightened dangers in the region for international oil companies, at a time when they have been expanding operations in Africa as one of the world's last energy frontiers. (See related story: "Pictures: Four New Offshore Drilling Frontiers.")


As BP, Norway's Statoil, Italy's Eni, and other companies evacuated personnel from Algeria, it was not immediately clear how widely the peril would spread in the wake of the hostage-taking at the sprawling In Amenas gas complex near the Libyan border.



A map of disputed islands in the East and South China Seas.

Map by National Geographic



Algeria, the fourth-largest crude oil producer on the continent and a major exporter of natural gas and refined fuels, may not have been viewed as the most hospitable climate for foreign energy companies, but that was due to unfavorable financial terms, bureaucracy, and corruption. The energy facilities themselves appeared to be safe, with multiple layers of security provided both by the companies and by government forces, several experts said. (See related photos: "Oil States: Are They Stable? Why It Matters.")


"It is particularly striking not only because it hasn't happened before, but because it happened in Algeria, one of the stronger states in the region," says Hanan Amin-Salem, a senior manager at the industry consulting firm PFC Energy, who specializes in country risk. She noted that in the long civil war that gripped the country throughout the 1990s, there had never been an attack on Algeria's energy complex. But now, hazard has spread from weak surrounding states, as the assault on In Amenas was carried out in an apparent retaliation for a move by French forces against the Islamists who had taken over Timbuktu and other towns in neighboring Mali. (See related story: "Timbuktu Falls.")


"What you're really seeing is an intensification of the fundamental problem of weak states, and empowerment of heavily armed groups that are really well motivated and want to pursue a set of aims," said Amin-Salem. In PFC Energy's view, she says, risk has increased in Mauritania, Chad, and Niger—indeed, throughout Sahel, the belt that bisects North Africa, separating the Sahara in the north from the tropical forests further south.


On Thursday, the London-based corporate consulting firm Exclusive Analysis, which was recently acquired by the global consultancy IHS, sent an alert to clients warning that oil and gas facilities near the Libyan and Mauritanian borders and in Mauritania's Hodh Ech Chargui province were at "high risk" of attack by jihadis.


"A Hot Place to Drill"


The attack at In Amenas comes at a time of unprecedented growth for the oil industry in Africa. (See related gallery: "Pictures: The Year's Most Overlooked Energy Stories.") Forecasters expect that oil output throughout Africa will double by 2025, says Amy Myers Jaffe, executive director of the energy and sustainability program at the University of California, Davis, who has counted 20 rounds of bidding for new exploration at sites in Africa's six largest oil-producing states.


Oil and natural gas are a large part of the Algerian economy, accounting for 60 percent of government budget revenues, more than a third of GDP and more than 97 percent of its export earnings. But the nation's resources are seen as largely undeveloped, and Algeria has tried to attract new investment. Over the past year, the government has sought to reform the law to boost foreign companies' interests in their investments, although those efforts have foundered.


Technology has been one of the factors driving the opening up of Africa to deeper energy exploration. Offshore and deepwater drilling success in the Gulf of Mexico and Brazil led to prospecting now under way offshore in Ghana, Mozambique, and elsewhere. (See related story: "New Oil—And a Huge Challenge—for Ghana.") Jaffe says the Houston-based company Anadarko Petroleum has sought to transfer its success in "subsalt seismic" exploration technology, surveying reserves hidden beneath the hard salt layer at the bottom of the sea, to the equally challenging seismic exploration beneath the sands of the Sahara in Algeria, where it now has three oil and gas operations.


Africa also is seen as one of the few remaining oil-rich regions of the world where foreign oil companies can obtain production-sharing agreements with governments, contracts that allow them a share of the revenue from the barrels they produce, instead of more limited service contracts for work performed.


"You now have the technology to tap the resources more effectively, and the fiscal terms are going to be more attractive than elsewhere—you put these things together and it's been a hot place to drill," says Jaffe, who doesn't see the energy industry's interest in Africa waning, despite the increased terrorism risk. "What I think will happen in some of these countries is that the companies are going to reveal new securities systems and procedures they have to keep workers safe," she says. "I don't think they will abandon these countries."


This story is part of a special series that explores energy issues. For more, visit The Great Energy Challenge.


Read More..

LIVE UPDATES: President Obama's Big Day


Four years and one day after President Obama first took his first oath of office, America is once again celebrating his Inauguration. This time the schedule includes performances by Beyonce and Katy Perry, a parade with more than 2,000 members of the military and two Inaugural balls.


Refresh here for updates throughout the day.


Tune in to the ABC News.com Live page on Monday morning starting at 9:30 a.m. EST for all-day live streaming video coverage of Inauguration 2013: Barack Obama. Live coverage will also be available on the ABC News iPad App and mobile devices.


Read Obama’s first Inaugural address here.


All times are in Eastern Standard Time.



8:27 a.m. – 2013 Inaugural Schedule


For all the day’s events, click on the image below.


inaugural schedule wblog LIVE UPDATES: Inauguration Day 2013

(Image Credit: ABC News)


Back to top



9:42 a.m. – Obamas on the Move


The Obama family has left church services at St. John’s Episcopal Church and headed back to the White House.


To see where the president will go next, check out ABC’s interactive map here.


Pastor Andy Stanley from the North Point Community Church in Alpharetta Georgia delivered the sermon, according to pool reports, calling the president “pastor in chief.”




This tweet from the president posted while the Obama family was still in church.




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9:15 a.m. – Obama’s View


ABC’s Jonathan Karl is on the platform at the West Front of the Capitol Building where Obama will give his inaugural address later today. He’s got the best view of the crowds, which won’t come close to the 1.8 million of four years ago, but which already number hundreds of thousands.




9:11 a.m. – Members of Congress Honor MLK on Twitter


Today America remembers the legacy of another great leader: Martin Luther King, Jr. Members of the House and Senate are taking to Twitter to express their admiration for King this morning.








9:04 a.m. – On the Ground with Good Morning America.




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9:03 a.m. – Best and Worst Inaugural Addresses


gty Abraham Lincoln nt 120918 wblog LIVE UPDATES: Inauguration Day 2013

(Image Credit: Getty Images)


ABC’s Chris Good reports on the best and worst inaugural speeches of all time:


Inaugural addresses, it is said, are usually not very good. Most have been long forgotten, and historians themselves point to few as memorable.


It’s not entirely clear why, but the moment might have something to do with it. Book-ending divisive national campaigns, inaugural addresses offer token unity sentiments, hopefulness but not always specific hopes, and even some good ones sound myopic.


“Most inaugural addresses are not remembered,” said Princeton University professor and noted presidential historian Eric Foner. “Grover Cleveland? I have no idea what he said in his.”


“I have actually read every single inaugural, and it was a really boring experience,” said Robert Lehrman, a former speechwriter for vice president Al Gore, who now teaches the craft at American University in Washington. “Most of the speeches are terrible. Even the ones we remember, I don’t think there is any reporter working anywhere that couldn’t write language as crisp or concrete as the majority of them.”


Read the rest of the worst and the best here.


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8:56 a.m. – Outfits of the Inauguration: Obama Style


ABC’s Mary Bruce reports:


The President, First Lady, in a dark blue jacket, and daughters Malia, in a pink overcoat, and Sasha, in dark purple, arrived just after 8:40 a.m. at St. John’s Episcopal Church for morning services.


The First Lady is wearing a navy Thom Browne coat and dress. The fabric was developed based on the style of a man’s silk tie. The belt she is wearing is from J.Crew and her earrings are designed by Cathy Waterman. She is also wearing J.Crew shoes. At the end of the Inaugural festivities, the outfit and accompanying accessories will go to the National Archives.


Malia Obama is wearing a J.Crew ensemble. Sasha Obama is wearing a Kate Spade coat and dress.


The Bidens arrived moments later.


Back to top



8:47 a.m. – Tailor to the Presidents: Republicans Dress Better




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8:45 a.m. – Great American Quotes


Inaugural addresses are an opportunity for presidents on the nation’s front lawn – a place that Americans come to in turns inaugurate their leaders, protest their government and mourn their dead – to place a marker for their legacy.


There have been some weighty and remarkable things said as presidents took the oath of office looking down on the Mall and also, from nearby, as other Americans have looked up and let their voices be heard at gatherings as varied as the March on Washington and the Promise Keepers.


What can Barack Obama say, come Monday, as he begins a second term with lower expectations and less inspiration, to place himself on this list of great American words?


Click below for an interactive look at the competition:


inauguration infographic 640x360 wblog LIVE UPDATES: Inauguration Day 2013

(Image Credit: ABC News: Ma'ayan Rosenzweig)


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8:38 a.m. – Aretha Franklin’s Hat Makes a Comeback




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8:22 a.m. – Martha Raddatz: Women Rule




Back to top


8:08 a.m. – Eva Longoria Wakes Up to with the White House




F schedule of events REV 20130117 update 2 LIVE UPDATES: Inauguration Day 2013


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Curated by ABC’s Z. Byron Wolf and Sarah Parnass

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Badminton: Lee trounces Kuncoro to lift crown






KUALA LUMPUR: World number one Lee Chong Wei trounced Indonesia's Sony Dwi Kuncoro 21-7, 21-8 to win a record nine Malaysia Badminton Open singles title on Sunday.

Lee dominated the court with flawless net play, strokes and lethal smashes and has now set his eyes on victory at the March All-England Superseries Premier.

The Malaysian has won his home country event every year since 2004, apart from in 2007 when victory went to Denmark's Peter Gade.

The 30-year-old Lee was in top form, outfoxing three-time Asian champion Kuncoro time and again at the net.

The energetic Lee dominated his opponent from the start, sending the 29-year-old bronze medallist in the 2004 Athens Olympics scurrying to all four corners of the court.

But Lee reserved some praise for Kuncoro.

"The pressure was very high on me to win the ninth title. The scoreline makes it look easy but it was tough. Sony was relentless, I had to keep lifting his shots, read his game before I can find the openings," he told reporters.

The home favourite's leaping smashes and controlled net play eventually gave him a one-sided victory over Kuncoro in just 32 minutes.

Lee said he would now concentrate on the upcoming All-England in Birmingham.

In the women's singles final, 18-year-old Tai Tzu Ying of Taiwan outfought China's Yao Xue 21-17, 21-14.

The men's and women's singles champions earned $30,000 while the runner-up walked away with US$15,200.

There was some joy for Europe as second seeded Danish pair Joachim Fischer Nielsen/Christinna Pedersen upset top seeded Malaysians Chan Peng Soon/Goh Liu Ying 21-13, 21-18 in the mixed doubles.

The Danes were a delight to watch as they dominated the young Malaysians at the front of the court.

"Malaysia is a lucky place for me. I won the women's doubles here last year (with Kamilla Rytter Juhl) and this year it is the mixed doubles," said Pedersen.

In other finals, Indonesia's Mohammad Ahsan/Hendra Setiawan defeated South Korea's Ko Sung Hyun/Lee Yong Dae 21-15, 21-13, to win the men's doubles crown, while China's Bao Yixin/Tian Qing outplayed Matsutomo Misaki/Takahashi Ayaka of Japan 21-16, 21-14 to take home the women's doubles title.

All the doubles champions walked away with $31,600 while the runners-up pocketed $15,200.

- AFP/fa



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Rahul Gandhi calls for change in 'unaccountable, centralized system'

JAIPUR: A complete overhaul of the system is needed as "young and impatient India" now demands "a greater role" in decision making, newly-appointed Congress vice-president Rahul Gandhi said on Sunday in an impassioned speech outlining the need for his 127-year-old party to develop leadership and give prominence to grassroots workers.

Gandhi, 42, in his first speech after being made the party number two, also asked the party to respect the youths' demand for a greater role in decision-making.

"We don't need better systems, we need a complete transformation in the system, we need 40-50 leaders at the national level (anyone of whom can be prime minister) and seven to 10 at the state level (for chief minister)," Rahul Gandhi said while addressing over 1,200 delegates at the All India Congress Committee session here.

Gandhi, who heads the party's coordination panel, is expected to lead the party in the 2014 general elections.

"The job of the Congress is to create leaders for the country," he said adding that "no other party has so much depth".

But Gandhi also said there was no need to rush with change, which, he said, has to be backed by careful thought.

Gandhi, who was Saturday named the Congress vice-president, making him officially the number two in the party after his mother and Congress chief Sonia Gandhi, said his new responsibility was a big one and told party workers that he will treat all of them equally, will learn from their experiences but will only play a judge.

"It is a big responsibility. I will work for everybody from today but I will play the judge and not the lawyer," he said.

According to him, the time has come to question the "centralised, unaccountable system and decision making must shift from Delhi to the panchayats".

Gandhi said there is a "young and impatient India" which is now demanding "greater role" in decision making.

"Why do a handful of people control the entire political space," he asked, adding that "people with little understanding were sitting at high positions".

He said the youth was angry and feeling alienated with the existing system.

"Until we start to respect and empower people, we cannot change anything in this country... all are closed systems, designed for mediocrity, mediocrity dominates," he said.

Hinting at things to come, he also said that action will be taken against party deserters who become election rivals or fight as Independents.

Noting that "one cannot achieve anything without hope," he said "we should not chase power, we should use power to empower people."

Gandhi struck an emotional chord when he related how his mother and the Congress president had cried when she met him Saturday night.

"Last night, everyone congratulated me and hugged me. But last night, my mother came to my room and she sat near me and cried. Why did she cry.. she cried because she understands that the power that so many see is poison. She can see it because she is not attached to it (power)," he said.

Read More..

Attack at Algeria Gas Plant Heralds New Risks for Energy Development



The siege by Islamic militants at a remote Sahara desert natural gas plant in Algeria this week signaled heightened dangers in the region for international oil companies, at a time when they have been expanding operations in Africa as one of the world's last energy frontiers. (See related story: "Pictures: Four New Offshore Drilling Frontiers.")


As BP, Norway's Statoil, Italy's Eni, and other companies evacuated personnel from Algeria, it was not immediately clear how widely the peril would spread in the wake of the hostage-taking at the sprawling In Amenas gas complex near the Libyan border.



A map of disputed islands in the East and South China Seas.

Map by National Geographic



Algeria, the fourth-largest crude oil producer on the continent and a major exporter of natural gas and refined fuels, may not have been viewed as the most hospitable climate for foreign energy companies, but that was due to unfavorable financial terms, bureaucracy, and corruption. The energy facilities themselves appeared to be safe, with multiple layers of security provided both by the companies and by government forces, several experts said. (See related photos: "Oil States: Are They Stable? Why It Matters.")


"It is particularly striking not only because it hasn't happened before, but because it happened in Algeria, one of the stronger states in the region," says Hanan Amin-Salem, a senior manager at the industry consulting firm PFC Energy, who specializes in country risk. She noted that in the long civil war that gripped the country throughout the 1990s, there had never been an attack on Algeria's energy complex. But now, hazard has spread from weak surrounding states, as the assault on In Amenas was carried out in an apparent retaliation for a move by French forces against the Islamists who had taken over Timbuktu and other towns in neighboring Mali. (See related story: "Timbuktu Falls.")


"What you're really seeing is an intensification of the fundamental problem of weak states, and empowerment of heavily armed groups that are really well motivated and want to pursue a set of aims," said Amin-Salem. In PFC Energy's view, she says, risk has increased in Mauritania, Chad, and Niger—indeed, throughout Sahel, the belt that bisects North Africa, separating the Sahara in the north from the tropical forests further south.


On Thursday, the London-based corporate consulting firm Exclusive Analysis, which was recently acquired by the global consultancy IHS, sent an alert to clients warning that oil and gas facilities near the Libyan and Mauritanian borders and in Mauritania's Hodh Ech Chargui province were at "high risk" of attack by jihadis.


"A Hot Place to Drill"


The attack at In Amenas comes at a time of unprecedented growth for the oil industry in Africa. (See related gallery: "Pictures: The Year's Most Overlooked Energy Stories.") Forecasters expect that oil output throughout Africa will double by 2025, says Amy Myers Jaffe, executive director of the energy and sustainability program at the University of California, Davis, who has counted 20 rounds of bidding for new exploration at sites in Africa's six largest oil-producing states.


Oil and natural gas are a large part of the Algerian economy, accounting for 60 percent of government budget revenues, more than a third of GDP and more than 97 percent of its export earnings. But the nation's resources are seen as largely undeveloped, and Algeria has tried to attract new investment. Over the past year, the government has sought to reform the law to boost foreign companies' interests in their investments, although those efforts have foundered.


Technology has been one of the factors driving the opening up of Africa to deeper energy exploration. Offshore and deepwater drilling success in the Gulf of Mexico and Brazil led to prospecting now under way offshore in Ghana, Mozambique, and elsewhere. (See related story: "New Oil—And a Huge Challenge—for Ghana.") Jaffe says the Houston-based company Anadarko Petroleum has sought to transfer its success in "subsalt seismic" exploration technology, surveying reserves hidden beneath the hard salt layer at the bottom of the sea, to the equally challenging seismic exploration beneath the sands of the Sahara in Algeria, where it now has three oil and gas operations.


Africa also is seen as one of the few remaining oil-rich regions of the world where foreign oil companies can obtain production-sharing agreements with governments, contracts that allow them a share of the revenue from the barrels they produce, instead of more limited service contracts for work performed.


"You now have the technology to tap the resources more effectively, and the fiscal terms are going to be more attractive than elsewhere—you put these things together and it's been a hot place to drill," says Jaffe, who doesn't see the energy industry's interest in Africa waning, despite the increased terrorism risk. "What I think will happen in some of these countries is that the companies are going to reveal new securities systems and procedures they have to keep workers safe," she says. "I don't think they will abandon these countries."


This story is part of a special series that explores energy issues. For more, visit The Great Energy Challenge.


Read More..

Obama to Be Sworn in for 2nd Term at White House


Jan 20, 2013 8:43am







While an estimated 800,000 people are expected to gather in Washington D.C.  Monday to watch President Obama be sworn in for a second term, his second term officially begins Sunday. He will take his oath of office in a private ceremony. Vice President Joe Biden was sworn in on Sunday morning at the Naval Observatory.


OBAMA SWEARING-IN:


gty john roberts obama jef 120628 wblog Inauguration 2013: President Obama, Vice President Biden Swearing In Ceremonies

Chief Justice John G. Roberts Jr. administers the oath of office a second time to President Barack Obama in the Map Room of the White House on Jan. 21, 2009. (Pete Souz / WH Photo / Getty Images)


–Obama will take the oath of office for a second term in a small ceremony in the Blue Room of the White House at 11:55 am. Chief Justice John Roberts will administer the oath.


–Obama will be sworn in using a Bible today that belonged to First Lady Michelle Obama’s grandmother, LaVaughn Delores Robinson. The Robinson family Bible was a present from the first lady’s father to his mother on Mother’s Day in 1958, six years before Michelle’s birth.


–Due to constitutionally-mandated scheduling, President Obama is set to become the second president in U.S. history to have four swearing-in ceremonies. Today will be his third. Obama was sworn in twice in 2008 out of an abundance of caution after Chief Justice John Roberts flubbed the oath of office.


Here is video of Obama’s first swearing in by Roberts:


And Here is audio of Roberts administering the oath for a second time in 2009:


–Franklin Roosevelt was also sworn-in four times but, unlike Obama, he was elected four times.


–This year will mark the seventh time a president has taken the oath on a Sunday and then again on Monday for ceremonial purposes. Reagan last took the oath on a Sunday in 1985.


PHOTOS: U.S. Presidents Taking the Oath of Office


BIDEN SWEARING-IN:


ap inaugural joe biden jt 130120 wblog Inauguration 2013: President Obama, Vice President Biden Swearing In Ceremonies

Carolyn Kaster/AP Photo


–Vice President Biden was sworn-in at the Vice President’s residence at the Naval Observatory, surrounded by his family and close friends.


–Biden personally selected Associate Justice Sotomayor, who will be the first Hispanic and fourth female judge to administer an oath of office.


–Three women have previously sworn-in presidents and vice presidents: Judge Sarah T. Hughes swore-in President Johnson in 1963; Justice Sandra Day O’Connor swore-in Vice President Dan Quayle in 1989; and Justice Ruth Bader Ginsburg swore-in Vice President Al Gore in 1997.


–On Sunday and Monday, Vice President Biden will be sworn in using the Biden Family Bible, which is five inches thick, has a Celtic cross on the cover and has been in the Biden family since 1893. He used it every time he was sworn in as a US Senator and when he was sworn in as Vice President in 2009. His son Beau used it when he was sworn in as Delaware’s attorney general.


Tune in to the ABC News.com Live page on Monday morning starting at 9:30 a.m. EST for all-day live streaming video coverage of Inauguration 2013: Barack Obama. Live coverage will also be available on the ABC News iPad App and mobile devices.



SHOWS: This Week World News







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Earl Smith is the man behind a military patch that President Obama prizes


That February morning in 2008 found Barack Obama decidedly out of sorts.


He was locked in one battle with Hillary Rodham Clinton for the Democratic nomination that showed no signs of ending — and another with a vicious cold that felt the same way.


As he rode the service elevator in the backway of a convention hotel here, the snowy-haired African American operating it turned suddenly. He held out a black-and-gold bit of fabric embroidered with a screaming eagle.

“Senator Obama, I have something I want to give you,” the man said. “I’ve carried this military patch with me every day for 40 years, and I want you to carry it, and it will keep you safe in your journey.” Obama tried to refuse, but the older man persisted.

Big endeavors can find their meaning in small moments.

Later that day, Obama and his aides discussed the encounter. The future president pulled the patch from his pocket, along with about a dozen other items people had pressed upon him.

“This is why I do this,” he said. “Because people have their hopes and dreams about what we can do together.”

Two American stories intersected that morning in that elevator. The more famous, of course, is the one that begins its next chapter on Monday, as the nation’s first black president takes the oath of office for a second term.

But the other story also tells a lot about where this country has been and how far it has come.

No one in Obama’s small party that day noticed the man’s name tag or, if anyone did, the fact that it said Earl Smith was quickly forgotten.

No one knew how much of Smith’s life had been woven into a patch that, over four decades, found its way from the shoulder of an Army private to the pocket of a future commander-in-chief.

It was the only shred of cloth he had saved from the uniform of a nightmarish year in Vietnam. Smith fired artillery with a brigade that suffered 10,041 casualties during the course of the war. The brigade’s soldiers received 13 Congressional Medals of Honor.

The patch was waiting among his possessions when Smith was pardoned by the state of Georgia in 1977 after spending three years in prison for a crime he claimed was self-defense.

Smith kept it close as his lucky charm while he rebuilt his life and his reputation, starting with a job vacuuming hallways and changing sheets in an Atlanta Marriott. He carried it with him as he traveled halfway around the world again, to positions in hotels far from home, Riyadh in Saudi Arabia and Abu Dhabi in the United Arab Emirates.

Along the way, as he tended to travelers and made sure VIP gatherings went smoothly, he met three U.S. presidents.

His instincts told him Obama would make it four.

Like just about anyone else who was alive on Nov. 22, 1963, Smith can describe exactly where he was when he heard the horrific news: He was coming off a high school football practice field in his home town of San Benito, Tex.

Though not yet old enough to have voted for the man slain in Dallas, “I was devastated — a lot of us young people were — because John Kennedy was the young president,” recalled Smith, now 68.

Read More..

Bowling: Shayna Ng wins International Bowling Championship in Japan






NAGOYA, Japan: Singapore bowler Shayna Ng has added another title to her belt after winning the DHC International Bowling Championship in Nagoya, Japan.

The 23-year-old claimed the women's crown after a title match showdown with American pro bowler Kelly Kulick.

With the victory, Ng takes home close to S$82,000 in prize money.

This is the second year that a Singaporean has won the title at the International Bowling Championship, following Cherie Tan's victory last year.

- CNA/fa



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Decisions on Pakistan cannot be based on emotion: Rahul

JAIPUR: Seeking to temper the discourse on Pakistan in the wake of the beheading of an Indian soldier, Rahul Gandhi today made some plain speaking saying taking tough steps and showing emotions are two different things.

Gandhi, who spoke in the sub-group on 'India and the World' at the party's brainstorming conclave here, is believed to have told the participants that while tough steps are taken in some situations, decisions cannot guided by emotions, sources said.

"We should take tough steps but not be emotional in our response," he said as the majority of participants sought strict action against Pakistan.

Interestingly, external affairs minister Salman Khurshid, who also participated in the discussion, advocated "balance" in dealing with such provocative situations.

He pointed out that India conducts its diplomacy in such a way that it maintains friendly relationships with countries, which are sworn enemies between themselves.

The discussion in the sub-group witnessed participation of a large number of delegates from Youth Congress and NSUI.

Party spokesperson Rashid Alvi advocated strong action against Pakistan after the beheading of the Indian soldiers and felt that the party's base document for discussing the issue was "mild" in tone.

Read More..

Attack at Algeria Gas Plant Heralds New Risks for Energy Development



The siege by Islamic militants at a remote Sahara desert natural gas plant in Algeria this week signaled heightened dangers in the region for international oil companies, at a time when they have been expanding operations in Africa as one of the world's last energy frontiers. (See related story: "Pictures: Four New Offshore Drilling Frontiers.")


As BP, Norway's Statoil, Italy's Eni, and other companies evacuated personnel from Algeria, it was not immediately clear how widely the peril would spread in the wake of the hostage-taking at the sprawling In Amenas gas complex near the Libyan border.



A map of disputed islands in the East and South China Seas.

Map by National Geographic



Algeria, the fourth-largest crude oil producer on the continent and a major exporter of natural gas and refined fuels, may not have been viewed as the most hospitable climate for foreign energy companies, but that was due to unfavorable financial terms, bureaucracy, and corruption. The energy facilities themselves appeared to be safe, with multiple layers of security provided both by the companies and by government forces, several experts said. (See related photos: "Oil States: Are They Stable? Why It Matters.")


"It is particularly striking not only because it hasn't happened before, but because it happened in Algeria, one of the stronger states in the region," says Hanan Amin-Salem, a senior manager at the industry consulting firm PFC Energy, who specializes in country risk. She noted that in the long civil war that gripped the country throughout the 1990s, there had never been an attack on Algeria's energy complex. But now, hazard has spread from weak surrounding states, as the assault on In Amenas was carried out in an apparent retaliation for a move by French forces against the Islamists who had taken over Timbuktu and other towns in neighboring Mali. (See related story: "Timbuktu Falls.")


"What you're really seeing is an intensification of the fundamental problem of weak states, and empowerment of heavily armed groups that are really well motivated and want to pursue a set of aims," said Amin-Salem. In PFC Energy's view, she says, risk has increased in Mauritania, Chad, and Niger—indeed, throughout Sahel, the belt that bisects North Africa, separating the Sahara in the north from the tropical forests further south.


On Thursday, the London-based corporate consulting firm Exclusive Analysis, which was recently acquired by the global consultancy IHS, sent an alert to clients warning that oil and gas facilities near the Libyan and Mauritanian borders and in Mauritania's Hodh Ech Chargui province were at "high risk" of attack by jihadis.


"A Hot Place to Drill"


The attack at In Amenas comes at a time of unprecedented growth for the oil industry in Africa. (See related gallery: "Pictures: The Year's Most Overlooked Energy Stories.") Forecasters expect that oil output throughout Africa will double by 2025, says Amy Myers Jaffe, executive director of the energy and sustainability program at the University of California, Davis, who has counted 20 rounds of bidding for new exploration at sites in Africa's six largest oil-producing states.


Oil and natural gas are a large part of the Algerian economy, accounting for 60 percent of government budget revenues, more than a third of GDP and more than 97 percent of its export earnings. But the nation's resources are seen as largely undeveloped, and Algeria has tried to attract new investment. Over the past year, the government has sought to reform the law to boost foreign companies' interests in their investments, although those efforts have foundered.


Technology has been one of the factors driving the opening up of Africa to deeper energy exploration. Offshore and deepwater drilling success in the Gulf of Mexico and Brazil led to prospecting now under way offshore in Ghana, Mozambique, and elsewhere. (See related story: "New Oil—And a Huge Challenge—for Ghana.") Jaffe says the Houston-based company Anadarko Petroleum has sought to transfer its success in "subsalt seismic" exploration technology, surveying reserves hidden beneath the hard salt layer at the bottom of the sea, to the equally challenging seismic exploration beneath the sands of the Sahara in Algeria, where it now has three oil and gas operations.


Africa also is seen as one of the few remaining oil-rich regions of the world where foreign oil companies can obtain production-sharing agreements with governments, contracts that allow them a share of the revenue from the barrels they produce, instead of more limited service contracts for work performed.


"You now have the technology to tap the resources more effectively, and the fiscal terms are going to be more attractive than elsewhere—you put these things together and it's been a hot place to drill," says Jaffe, who doesn't see the energy industry's interest in Africa waning, despite the increased terrorism risk. "What I think will happen in some of these countries is that the companies are going to reveal new securities systems and procedures they have to keep workers safe," she says. "I don't think they will abandon these countries."


This story is part of a special series that explores energy issues. For more, visit The Great Energy Challenge.


Read More..