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UPDATE 1-Nigerian offshore attacks surge as pirates advance

Thu, 21st Feb 2013 16:25

* Piracy attacks worst since 2010 - Control Risks

* Gangs venture further afield, become more violent

* Oil gangs with powerful backers are prime suspects

By Joe Brock and Jonathan Saul

ABUJA/LONDON, Feb 21 (Reuters) - A spike in piracy offNigeria's oil-rich coast has shown gangs are willing to venturefurther afield and use more violent tactics, increasing the riskof doing business in Africa's largest energy producer.

Pirates demanded a 200 million naira ($1.3 million) ransomfor the release of six foreigners kidnapped on Sunday, thelatest in at least five attacks in Nigerian waters this month.

Exxon Mobil and Shell officials said thisweek that security was a major factor in Nigeria, and it was oneof the most expensive oil-producing countries to operate in.

"The recent upsurge in maritime kidnaps off the Niger Delta... has not been witnessed since 2010," said Tom Patterson,maritime risk analyst at Control Risks.

"It is easy to underestimate the debilitating effect such asituation can have, even on larger corporations," Pattersonadded.

Oil and shipping companies have to hire crisis managementteams, pay huge insurance premiums and face the prospect ofransom payments, as well as brace themselves for damage to theirreputations.

At the same time, pirates are becoming more ambitious.

Three crew members were kidnapped on Feb. 7 from theBritish-flagged cargo ship Esther C around 80 miles offshore,the furthest pirates have reached in the Gulf of Guinea.

A Filipino crew member was killed when gunmen attacked achemical tanker three days earlier, in the first confirmed casein Nigerian waters of crew killed on a vessel that deployed aprivate armed team, security firm AKE said.

"The main problem with the increase in West African piracyis the consequences to the crews," said Jakob Larsen, maritimesecurity officer with BIMCO, the world's largest private shipowners' association.

"Given the more violent nature of the pirate attacks offWest Africa, there is every reason to exercise caution whendeciding whether to use armed guards or not."

OIL GANGS

The prime suspects for most attacks are Nigerian oil gangs,who already carry out industrial scale crude theft, called'bunkering' in the restive onshore Niger Delta swamplands.

Nigeria's oil minister said this week that oil theft, whichcan amount to 150,000 barrels per day (bpd), was the work of aninternational criminal syndicate. President Goodluck Jonathanhas asked Britain for help.

Security experts also believe Nigerian security officialsand politicians are complicit in oil theft and piracy.

"There are many top people in Nigeria involved incommissioning these attacks and sharing the profits," saidMichael Frodl, head of U.S. consultancy C-Level Maritime Risks.

"It's obvious to us that they've been bringing in people inother nations into the game, and sharing a cut in exchange fortips for tankers and cargoes."

Compounding the problem, there is less fuel available inNigeria since Jonathan reduced subsidies last year, which hasforced prices to rise. This has provided an added incentive forgangs to locally refine stolen oil or siphon fuel off ships theyattack, experts say.

"Piracy off Nigeria and West Africa is really much more anextension of the 'bunkering' that's endemic on shore, and wethink that as oil prices continue to rise, the potential formaking bigger profits by reselling stolen oil will only furtheraccelerate attacks and hijackings," C-Level's Frodl said.

The rise in pirate attacks comes as Nigerian forces havebeen more stretched in the last two years due to an Islamistinsurgency in the Muslim north.

"There is a sense that security resources are being focusedto combat the terrorist threat in the north of the country,"said Rory Lamrock, intelligence analyst with AKE.

"We're likely to see further attacks over the coming monthsas local authorities are unable to effectively police thewaters, especially up to 50 or 60 nautical miles off the coast."

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