- The Washington Times - Tuesday, June 22, 2004

Saudi Arabia relies on a multilayered security system to protect its oil fields, including an estimated 30,000 guards, high-tech surveillance and antiaircraft weapons, as well as air and naval support, according to security analysts and advisers.

Increasingly tight security has helped the nation with the world’s largest proven oil reserves crack down on terrorist threats to its infrastructure, though foreign workers remain especially vulnerable to attacks.

The big-budget security apparatus provides a glimpse of what will be needed to secure the oil sector in Iraq — the nation with the world’s second-largest proven reserves — though the overall environment in the occupied nation means that portions of the system will remain likely targets, at least in the near term.

“The nature of the challenge is very different in Iraq. Even people who are reasonably well-trained and committed would have trouble in a security environment so chaotic,” said Kevin Rosser, an analyst at Control Risks Group, a London security and risk-analysis firm working in Iraq and Saudi Arabia.

“If there is any glimmer, it is that they haven’t succeeded in any attacks on the most vital infrastructure,” he said, referring to oil refineries and terminals.

Insurgents last week killed the chief of security for one of Iraq’s state-owned oil companies, and bombs damaged pipelines that feed Persian Gulf terminals, disrupting oil exports for days.

Earlier this month, gunmen attacked oil workers in a housing complex in Saudi Arabia. An American contractor was kidnapped and on Friday was killed.

The U.S. State Department Thursday warned Americans of the “continuing serious threat” to safety and urged citizens to leave Saudi Arabia.

“The U.S. government continues to receive credible information indicating that extremists are planning further attacks against U.S. and Western interests,” the travel warning said.

The attacks and oil-delivery interruptions have roiled oil markets and helped drive crude oil prices. Coupled with rising global demand, security issues have pressed crude oil prices above $40 per barrel this year.

Iraqi crude oil sales have climbed to $10.8 billion since the war, the Coalition Provisional Authority said yesterday.

Analysts say all countries in the Middle East are concerned about violence, but Saudi Arabia and Iraq are now the most closely watched.

Since May 2003, when terrorists executed four suicide bombings on a housing complex in Riyadh — killing 34 persons, including seven Americans, and wounding hundreds — the Arab kingdom has stepped up security efforts but still faced continuing violence.

“While a successful attack on the kingdom’s oil infrastructure would have an immediate impact on energy markets, the risk of serious damage to oil production is very low,” said Nawaf Obaid, a security consultant to the Saudi government, in an article this month in Jane’s Intelligence Review.

Mr. Obaid, in an interview, said the Saudi government is making progress in cracking down on terrorist cells that target foreign workers. Meanwhile, the country’s energy infrastructure is well-protected by a special unit drawing from security, intelligence and military forces, as well as security forces for Aramco, the state oil company, he said.

A separate report by Mr. Obaid and Anthony Cordesman, an analyst at the Center for Strategic and International Studies, a Washington think tank, estimated Saudi Arabia’s total internal-security budget topping $7 billion for 2003, “with a virtually open-ended capability to spend on any internal-security purpose.”

Iraq’s internal resources are more limited, its oil incomemust go to a variety of projects, and the situation much more violent. With the pending transition from U.S.-led occupation to an Iraqi-led government, the security environment may deteriorate.

“The problem is we don’t know how much security is needed. And Iraq is unique. The number of potential saboteurs is very large relative to any other country,” said John Pike, director of Globalsecurity.org, a private defense and security firm.

“They are not going to solve this problem this year. I think they will have a better handle on it this year,” Mr. Pike said.

Florida-based AirScan Inc. reportedly is involved in aerial surveillance of oil pipelines, though the firm would not comment on its operations.

The Iraqi Ministry of Oil contracted Erinys Iraq, subsidiary of British firm Erinys International, to recruit, train, equip and manage more than 14,000 Iraqi personnel to protect the country’s oil infrastructure. There are more than 260 oil facilities and 7,000 miles of pipeline to guard.

The company would not comment on its operations. Its initial, one-year contract, awarded in August, was valued at almost $40 million.

The company has said that its efforts are reducing the number of successful attacks, though it has not eliminated them.

“They have to manage as best they can. I think people have … accepted this kind of thing is likely to happen in Iraq. It is a concern at a time when spare [oil] capacity in [the Organization of Petroleum Exporting Countries] is already being tested,” said Mr. Rosser.

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