Bloomberg News

Pirates Looting Cargo With AK-47s Threaten African Oil

November 21, 2013

Port in Mogadishu

Porters offload goods from a foreign vessel in the sea port in Mogadishu, Somalia. Photographer: Tony Karumba/AFP/Getty Images

Ankur Varma, third officer on the oil tanker M/V Cotton, opened his cabin door at five minutes to midnight on July 14 to find two men pointing AK-47s at him.

“They just pushed me into the cabin with the guns in my chest and they told me to stay silent,” Varma said in a phone interview from India. “They were threatening, they were showing the guns, pointing at us. They took everything -- everything that we had -- including clothes, toiletries, electronics.”

They also took the ship’s cargo. The Maltese-flagged vessel was carrying about 10,000 tons of fuel oil belonging to France’s largest oil company when it was attacked by 15 pirates off the coast of Gabon in West Africa. The hijackers kept control of the tanker for seven days as they siphoned off the fuel.

While Total SA (FP) eventually got its fuel oil back with the help of Ghana’s navy, Varma’s story is becoming increasingly typical as Africa’s west coast replaces Somalia as the world’s most piracy-prone area. The attacks, which are getting more frequent and more violent, threaten shipping in sub-Saharan Africa’s largest oil-producing region.

West Africa’s Gulf of Guinea had 40 piracy attacks in the first nine months of the year, compared with 10 incidents in waters around Somalia, according to data from the International Maritime Bureau’s Piracy Reporting Centre. As well as stealing from ships, kidnappings are on the rise. Last month, two U.S. citizens were seized from a supply ship before being released after more than two weeks.

Taking Hostages

“Initially they were interested in holding the ships, stealing the cargo, taking this ship-crew’s possessions and money and leaving,” said Roy Paul, a director at the Maritime Piracy Humanitarian Response Programme. “This year, we’ve seen an increase in taking hostages” for ransom.

Nigeria, Gabon, Ghana and other countries around the Gulf of Guinea produce more than 3 million barrels of oil a day, or about one-third of Africa’s output, according to data compiled by BP Plc. The region’s crude, often so-called sweet grades that are refined into high-value motor fuels, is shipped to refiners in the U.S., Europe and Asia. Nigeria and Equatorial Guinea are also leading liquefied natural gas exporters.

This year, piracy has spread through the region from Nigeria, where theft from ships has long been common, and ships are being attacked farther offshore, according to the International Maritime Bureau. Boardings or hijacks have been reported off Togo, Ivory Coast, Sierra Leone and Guinea.

Warships Deployed

Piracy’s rise in West Africa has been mirrored by its decline off Somalia, where kidnappings spurred a response from shipowners and western governments. The deployment of warships and the use of armed guards have resulted in the number of incidents plunging this year.

The use of private security may be less effective in the Gulf of Guinea because the pirates are more violent, said Jan Fritz Hansen, who chairs the piracy task force at the European Community Shipowners’ Associations.

“They are becoming more and more organized,” Hansen said in an interview. “You can’t really rely on private armed guards. It should be a more strong force from governments. The criminals down there are a bit better equipped and armed.”

International oil companies exporting from the region are taking steps to protect ships from attack.

“We take additional precautions on all our LNG tankers for security,” Andrew Gould, chairman of U.K.-based producer BG Group Plc (BG/), which exports all of Equatorial Guinea’s natural gas, said in an interview. “We have a procedure in place. We have warned people.”

Protect Vessels

Peter Voser, the chief executive officer of Royal Dutch Shell Plc (RDSA), the biggest operator of oilfields in Nigeria, and Total Chief Financial Officer Patrick de la Chevardiere said they had policies to protect their vessels from attacks.

“We are facing a difficult situation in Nigeria; we are protecting our staff there,” de la Chevardiere said. “We faced several kidnappings in Nigeria for money. We were able to solve all of them.”

West African nations made some progress on fighting piracy after agreeing on a Code of Conduct to help protect trade and shipping, said Simon Bennett, a director at the International Chamber of Shipping, which represents companies controlling more than 80 percent of the world’s merchant tonnage. Last month, politicians agreed to develop coordination mechanisms in 2014, the United Nations Office for West Africa said.

Sovereign Waters

Many Gulf of Guinea incidents occur in national waters and governments need to bolster efforts to guard their coastlines and fight money laundering from the sale of stolen goods such as oil, said Andrew Linington, a spokesman for the Nautilus International trade union. The sovereign status of the waters prevents shipowners from hiring private armed guards or using foreign navies to patrol the area.

Piracy “is clearly a threat, which we take very seriously,” Shell’s Voser said. “There are various measures one can take. You either avoid these areas or when you go through, you go in convoys and you can be protected.”

The M/V Cotton was drifting 2.1 nautical miles (3.7 kilometers) off the Gabonese port of Gentil when it was attacked. The 24 crew members were finally released unharmed by the pirates, who claimed to be from Nigeria, Varma said. He’s considering a new line of work.

Since the incident, the Cotton oil-product tanker has been renamed Sky, according to data on Bloomberg.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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