- The Washington Times - Monday, June 7, 2004

A string of deadly attacks on foreigners in Saudi Arabia has struck a nerve in an economy that relies heavily on foreign labor to do everything from running giant oil projects to sweeping the streets.

A strike by suspected Islamist militants on a critical Saudi oil facility on May 29 killed at least 22 foreigners and was the fifth such incident in the kingdom in a little more than a year. Gunmen struck again in a Riyadh neighborhood on Sunday, killing an Irish cameraman for the British Broadcasting Corp. and seriously wounding a British colleague.

The United States has warned Americans working in Saudi Arabia about the rising danger of violence, and other Western countries have issued severe travel warnings. Oil traders estimate that the current price for a barrel of oil, which soared above $40 last week, includes an $8 to $12 premium to cover the risk of terrorism.

Saudi officials are under no illusions about the motivation behind the attacks targeting foreign workers and expatriate housing and gathering places.

“It’s obvious they are trying to target the oil industry and they’re trying to scare people, particularly foreigners, into leaving the country,” said Adel Al-Jubeir, a foreign-affairs adviser to Saudi Crown Prince Abdullah, the country’s de facto ruler.

“They believe that if this happens, the Saudi economy will collapse and then the Saudi government will be ripe for the plucking,” he said.

But Muhammad Ali-Zainy, an analyst with the London-based Center for Global Energy Studies, said the work force of Aramco, the giant state oil company, is more than 90 percent Saudi.

Saudi Oil Minister Ali al-Naimi said last week that “only eight to 10” foreigners had left the country after the May 29 attack in Khobar, but anecdotal evidence suggests the number is larger.

Diplomats in the region said oil companies are finding it harder to hire replacements for workers who leave despite tempting salaries, and several industrial projects have had to be postponed.

Ali al-Ahmed, director of the Saudi Institute, a Washington-based research group that has often challenged the government’s official line, said there were also numerous reports of foreign executives and their families relocating to Bahrain and Dubai in recent weeks.

“It’s definitely a bigger problem than they’re saying,” said Mr. al-Ahmed.

Anthony Cordesman, a security analyst with the Center for Strategic and International Studies, said an exodus of U.S. oil industry executives could have a bigger impact on Saudi Arabia’s natural-gas development, which is critical to exporting the country’s oil in the long term.

“It would affect Saudi Arabia’s ability to bring in advanced technology, to go into downstream operations, and certainly to attract foreign investment,” he said.

Saudi Arabia, home to a quarter of the world’s known oil reserves, is dependent on foreign laborers, both as technicians and engineers in the country’s oil fields and as servants and unskilled workers doing jobs many native Saudis refuse to do.

Despite an intense government push for “Saudization” of the work force, an estimated 5.7 million of the kingdom’s 23.4 million people — 24 percent — were born outside Saudi Arabia.

No major foreign oil firm has pulled out in the days after the Khobar attack, but many have announced increased security and other precautions.

Royal Dutch Shell said its workers will stay in the country, but has offered to repatriate family members. China’s Sinopec and France’s Total say they also are staying, but Total workers have been moved temporarily to an undisclosed location.

Andrew Borowiec in Nicosia, Cyprus, contributed to this report.

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