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G4S says Algeria, Mali unrest raising security demand

Templar

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G4S says Algeria, Mali unrest raising security demand
2013-01-25

G4S, the world's biggest security firm, is seeing a pick up in demand for its services from embassies and companies across Africa in the wake of unrest in Mali and Algeria.

The British group, battling to recover at home from botching a contract at last year's London Olympics, is seeing a rise in work ranging from electronic surveillance to protecting travelers, its regional president for Africa told Reuters.

"Demand has been very high across Africa," Andy Baker said in an interview. "The nature of our business is such that in high-risk environments the need for our services increases."

Trouble in Mali and Algeria has dominated recent media headlines, with France leading an operation to drive Islamist fighters allied to al Qaeda from northern Mali, and an al Qaeda raid on an Algerian desert gas plant, which saw 38 mostly foreign hostages killed.

In Britain, G4S's reputation was damaged last year when it failed to provide the agreed number of security guards for the London Olympics, and analysts are still unsure whether the fiasco will have a lasting impact on its business in the country, particularly with the government.

However the group, which makes about 22 percent of its revenues in Britain and Ireland, is expanding rapidly elsewhere.

Its emerging markets business, which includes its operations in Africa, accounts for over a third of group profit and helped to drive revenues up 5.5 percent for the first nine months of its financial year.

G4S is already one of Africa's largest private sector employers with over 110,000 staff in 29 countries across the continent, and Baker said the rise in demand for its services was not just confined to the countries directly hit by unrest.

"The issues going on in some of the countries across Africa can't really be considered single-country issues, they become regional quite quickly," he said.

"For example, the Algerian hostage tragedy was ostensibly retaliation for the French moving into Mali, so there are regional implications in many of these countries and that brings with it many threats, so demand is high."

He said G4S, which shares intelligence on al Qaeda with governments, had seen a pick up in demand for travel protection from embassies and companies in Mali, Nigeria, Kenya and South Africa in particular.

Multinational companies were also approaching the group about pan-African security deals, he added, with one contract with an unnamed oil and gas firm signed late last year and another with a major global bank on the cards.

G4S, whose clients include oil group Royal Dutch Shell, bank Barclays and miner AngloGold Ashanti, makes around 500 million pounds ($789 million) of turnover in Africa out of a group total of 7.5 billion pounds.

Its services also include running a prison, assisting at crime scenes and transporting cash.

The group is currently opening in Tunisia and Ethiopia and considering moves into Libya and Somaliland. The firm is not in Algeria due to regulatory issues, it said.

G4S is also targeting opportunities in Africa's buoyant natural resources sector.

- Reuters
 

Sapper73

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#2
This could either be really good for CP in general or extremely bad with a lot of opportunist companies popping up and trying to out bid other companies to secure contracts, meaning a lot of people could end upping getting hurt. Either way just going to have to wait and see what happens...
 

Templar

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#3
Oil firms face soaring security bill after attacks

Oil firms face soaring security bill after attacks
2013-01-26

Oil executives are resigned to a rise in security costs which will be steep even for an industry used to working in dangerous places, as they strengthen defenses against militants and cyber attackers alike.

Officials at the energy industry's biggest annual gathering believe investment in some new projects may slow, particularly in North Africa, following last week's siege at an Algerian gas plant and a 2012 cyber attack on Saudi oil computers.

"Our industry is traditionally linked to political risks but last week's events will lead to a major review of security spending," said Andrei Kuzayev, who heads overseas operations at Russia's Lukoil(LKOH.MM).

This would inevitably mean a big rise in costs, Kuzayev said at the gathering held on the sidelines of the World Economic Forum in Davos. The Algerian siege staged by Islamist militants ended with heavy loss of life among foreign hostages when government forces stormed the plant deep in the Sahara desert.

Industry officials are usually reluctant to discuss their security arrangements in detail. Kuzayev, who spends his time between operations in countries including Iraq, Egypt and Ghana, said security usually accounted for one to three percent of a project's overall costs.

Although security was not necessarily decisive in final investment decisions, costs were already rising rapidly.

Kuzayev cited Egypt, where president Hosni Mubarak was overthrown in a 2011 uprising. "We had to evacuate people from Egypt three times during the revolution. Basically, the main take out here is that you cannot relax even for a second," he said.

Oil firms are experienced in operating in turbulent countries but often the threats are greater than ever before.

Two operators of the Algerian gas plant, London-based BP (BP.L) and Norway's Statoil (STL.OL), experienced their worst security incident in the siege staged by jihadists, who said they were retaliating against France's intervention in Mali.

BP has operated in Algeria for more than 60 years and the energy industry there suffered no major attacks even during a civil war in the 1990s between the secular government and Islamists.

But during the siege major oil companies had to evacuate dozens of expatriate workers and review security across North Africa in Libya and Egypt. Those worries are spreading as French forces battle Islamists across the Sahara in Mali.

Nigeria has already faced rebel attacks on its oil industry in the south and Islamist violence in the north. President Goodluck Jonathan said in Davos this week that he feared the attacks in the Sahara could spread through west Africa if the instability in Mali were not contained.

The Sahara region is awash with armed men, particularly since the revolution in Libya which overthrew Muammar Gaddafi.

BP Chairman Carl-Henric Svanberg acknowledged the problem in the region but noted Algeria's tough response when it sent in special forces to end the siege.

"It is clear that with so many weapons around and all sorts of veterans, it will be tough. It is hard to speculate if it can become the new Afghanistan, but certainly not in Algeria, which made its response very clear," he said.

DEFENDING "OUR WORLD"

Attackers on the oil industry don't necessarily carry guns. Saudi Arabia said in December that it had suffered a cyber attack on 30,000 computers last August, aimed at stopping oil and gas output of the world's biggest crude exporter.

"If you don't protect your computer systems you cannot do anything. Same if you don't protect your oil wells. We will have to do our utmost so they don't attack our world," an emotional Total (TOTF.PA) Chief Executive Christophe de Margerie told Reuters.

Daniel Yergin, a Pulitzer prize-winning writer on the energy industry who chaired the energy meeting at the Swiss ski resort, said security has emerged as a paramount issue since the Saudi attacks.

"Cyber security and security of physical energy infrastructure emerges as the key concern," he said, noting developments such as looting of arm depots in Libya during the revolution. "The weapons have become so much more available to non-state actors in the past two years," he said.

Faced with the threats, producing countries are bound to experience unwelcome consequences.

Crescent Petroleum's Chief Executive Majid Jafar, said North Africa should avoid a sudden drop in energy production but would suffer a slowdown in investment and projects. "Majors are especially careful with security risks, given that they are seen these days as national flag carriers," said Jafar, whose firm is active in Egypt and autonomous Kurdistan in northern Iraq.

The International Energy Agency's chief economist Fatih Birol believes governments in the region will have to work harder to attract investment in their energy industries.

"The Algerian attack will make life more challenging for everyone in the region. Producing countries will have to make terms more attractive and guarantee political stability," he said.

- Reuters
 
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