Maritime Security: Two Trident Group Contractors Found Dead On The Maersk Alabama

Traces of narcotics and hypodermic needles found with the bodies of two American security officers on the container ship Maersk Alabama suggested the deaths resulted from drug overdoses, a Seychelles government official told CNN on Thursday. -CNN

Sad deal. This is the second death report I have done here on the blog recently, and this is never fun to put out there. My heart goes out to the friends and family of the fallen.

As to the cause, the Seychelles government says there were narcotics and hypodermic needles found with the bodies. If true, perhaps heroin was the cause of death? I say this drug, just because there has been an increase in heroin related deaths in the US and around the world. Most notably the actor Seymour Hoffman just died from a heroin overdose. The only way to confirm that these guys died from an overdose or from tainted drugs is through an autopsy.

Also, where did the drugs come from? Were they locally bought when they came into port or did they transport them from the US? Who knows…

What is significant is the company reaction, which leads me to believe that they know more than what is openly being said. Here is the quote:

The Maersk Alabama’s owner, the Norfolk, Va.-based Maersk Line Ltd. also has said the deaths were not related to security duties or ship operations. The ship has since left the African port. Speers statement says the company has a zero tolerance policy when it comes to drugs and alcohol, and that based on past experience working with The Trident Group, it believes this is an isolated incident.
Still, the company is responding by requiring reviewing its personnel records to confirm that drug tests and background checks are current, among other things. Speer said The Trident Group will also implement a random drug testing program to increase the frequency it screens security personnel.

There is a problem with drug screening and contracting that needs to be emphasized here. If guys know that they will be tested as a requirement of work, then they will simply not take the contract until they are clean. When they accept the contract they know they are ready to take the test the company gives ‘randomly’, because they waited an adequate amount of time for the drugs to clear the body. That is the problem with drug testing and independent contractors. You might get a clean contractor upon hiring, but have no idea about their history.  That, and as soon as they pass the test, they go right back into drug use mode when they get on that contract. That’s if they have access to those drugs and they are not able to control their craving or dependence.

The same goes for alcohol. Companies do not test for alcohol and it is very difficult for companies to maintain a ‘zero tolerance’ for alcohol use out in the field, if their leaders don’t care. Or the leaders are drinking as well, and could care less about the policy. It all goes back to how strong of a leadership program the company has, and are the leaders in the field truly aligned with the company’s policies/strategies/goals?

Back to the dynamics of contracting, if these guys are actual employees that are employed ‘full time’ with the company, then I could see random drug tests as being effective. They could administer the things at any time, and know that they could truly catch those folks. But still, people are all the same, and they will always find a way to bypass these tests. Or the leaders out in the field could care less about what the company wants and will give a heads up to the guys that a test is coming.

You know, I can’t emphasize enough how damaging that kind of environment is. Weak leaders, or leaders that could care less about holding their people accountable, is a recipe for disaster when it comes drugs or alcohol. Fitzsimmons comes to mind as a reminder of why contracting and alcohol doesn’t mix. Or the AGNA episode. Or the Jorge Scientific video.

Another thing to remember is that some tests are not able to pick up all drugs. Or certain drugs are taken by contractors because they do not last in the body, which makes it easy to play the system. For example, there are some types of steroids that last in the body for 4 days. So a contractor could do a cycle, and time it for when they would be accepting a contract, and then they would take the drug test at the right time when they are clean.

Then of course there is the management of contractors and being aware of the signs of drug and alcohol use. Does the company’s leaders pay attention to this stuff, or are they looking the other way?  Who knows what happened in this deal, but if guys are standing post on a ship and high on drugs or drunk, then that just doesn’t sit well with fellow guards or the client. It’s the type of thing that gets people killed or it leads to companies losing contracts and gaining poor reputations.

I also want to talk about that last part. Reputation is everything, and the competition out there is fierce. There are numerous companies worldwide, all fighting for contracts in the maritime security industry, and the members of these companies can sometimes act pretty negatively (trash talking) towards other companies that are on the skyline.

Trident Group was the victim of this kind of trash talking after their contractors were involved in a shooting incident awhile back. The video of the incident went viral and numerous companies and contractors out there were trying to depict the men involved as out of control, even though they had no idea about the context of what was seen. That the boat had actually been attacked by the same pirate group twice in 72 hours! But hey, Trident Group still had a peanut gallery out there trying to talk down the company and make them out to be reckless or out of control.

With this current incident, this just gives the competition the ammunition they need to steal Trident Group’s business. That is the reality of it, and the speed of new media and social networking is relentless when it comes to spreading rumor or half truths.

Although with this particular contract, Maersk owes the Navy SEALs big time for the rescue of Capt Phillips, complete with a movie to document the whole thing. Given that quote about the company’s response to this incident, I imagine they are doing all they can to restore Maersk’s trust in the contractors they send out to protect them. I hope the company is taking a good look at it’s leadership out in the field as well.

When the autopsy comes up, I will make the edit. A big hat tip to everyone that contacted me via Facebook and sent me emails about this. I don’t think I have ever had that many people forward a story like that, and this really was some unique news for our industry. Everyone was trying to give me the heads up on this and I really appreciate that. -Matt

 

 

Drugs on Maersk ship where 2 ex-SEALs died
February 20, 2014
Drugs were in the room where two former Navy SEALs were found dead aboard the Maersk Alabama, a ship that was the focus of a 2009 hijacking dramatized in the movie “Captain Phillips,” a company spokesman said Thursday.
Police from the African island nation of Seychelles have given no cause of death for Mark Daniel Kennedy, 43, and Jeffrey Keith Reynolds, 44. The Americans were security contractors who were found dead Tuesday in a cabin on the ship while berthed in Port Victoria in the Indian Ocean.
“We are saddened by the tragedy and our thoughts are with the family and friends of the deceased men,” Maersk Line Ltd. spokesman Kevin Speers said in a statement.
Speers said the Seychelles police report includes observations about the presence of drugs and paraphernalia in the room where the two men were found dead, although the type of drug is unknown.
On Thursday, police spokesman Jean Toussaint, noted that officials were awaiting autopsies and said, “As far as I know there is no evidence of physical trauma” on either man’s body. Speers said the Maersk Alabama was cleared to leave Seychelles following the onboard investigation and that it is already underway.
The Maersk Alabama is a Norfolk, Va.-based container ship that provides feeder service to the east coast of Africa and employs security contractors to provide anti-piracy services. The two men who were found dead worked for a Virginia Beach, Va.-based maritime security firm, The Trident Group.
In a statement posted on its website, The Trident Group President Thomas Rothrauff said there “is no immediate indication as to the cause of death, but the deaths were not caused by operational activity.” Rothrauff wrote that the next of kin have asked that no further information be released and that their privacy be respected.
The Maersk Alabama’s owner, the Norfolk, Va.-based Maersk Line Ltd. also has said the deaths were not related to security duties or ship operations. The ship has since left the African port. Speers statement says the company has a zero tolerance policy when it comes to drugs and alcohol, and that based on past experience working with The Trident Group, it believes this is an isolated incident.
Still, the company is responding by requiring reviewing its personnel records to confirm that drug tests and background checks are current, among other things. Speer said The Trident Group will also implement a random drug testing program to increase the frequency it screens security personnel.
The Trident Group was founded by former Navy SEALs and hires former special warfare operators to perform security. On Thursday, the Navy confirmed that Kennedy and Reynolds belonged to the SEALs, an elite unit of the military’s special operations forces who are sometimes called upon to combat piracy. Read the rest of this entry »

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Industry Talk: Two DynCorp Contractors Killed In VBIED Attack In Afghanistan

Rest in peace to the fallen and my heart goes out to the friends and family of both men. Very tragic that these guys were going home when this happened. Michael was on his way to getting married this Valentines day.

A VBIED is what killed the two men, and no word on the condition of everyone else that was wounded. -Matt

 

Michael Hughes.

 

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Paul Goins.

 

Two Killed in Kabul, Afghanistan
February 10, 2014
On February 10, 2014, two DynCorp International personnel working on the Combined Security Transition Command – Afghanistan (CSTC-A) program were tragically killed in an explosion near Kabul, Afghanistan.
Paul Goins, 62, of Crosby, Texas, joined DI in February 2013. A veteran of the U.S. Marine Corps, Mr. Goins had more than 35 years of experience in the correctional and compliance fields, working with the Department of Justice, the Federal Bureau of Prisons, and in the private sector. His professional contributions were made at home in the United States, and abroad in Iraq and Afghanistan, where he worked to share his knowledge with developing countries.
Michael Hughes, 38, of Washington, Montana and Nevada, joined the DI team in Afghanistan in November 2010. Having worked for several years with the Department of Corrections in Washington State, Mr. Hughes’ areas of expertise included training, emergency management, incident command, as well as hostage and crisis negotiations.
DynCorp International chairman and chief executive officer Steve Gaffney commented, “The world lost two heroes in this attack. They volunteered to travel to places they had never been, to help people they had never met. I ask that you please keep them, along with their families, loved ones, and colleagues who continue to support the mission, in your thoughts and prayers.”

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Weapons: Oh, The Weapons Contractors Use…

This is a fun one. On Facebook I posted a TOTD or Thought Of The Day on what types of weapons contractors have used in the past on contracts. What I got was an incredible amount of feedback on this and it was really fun to see what popped up. Here is the TOTD I posted:

TOTD: Contractor Weapons. I think this would be a fun one. I would be interested in all the various weapon types that guys have seen issued as contractors, or had to use as part of their contract. Or stuff that you saw or heard other contractors use. Everyone hears about AK’s, M-4/ARs, and Glocks, but what are the other rifles and pistols seen issued. Or even the heavier weapons used for contracts. This should be a fun one and I will probably make a post out of it on the blog.

I have mentioned in the past that Facebook has been incredibly useful for interacting with the contractor community. The amount of feedback and interaction is amazing and very useful. I am also able to share more ideas in a more efficient manner there, which also helps to get more ideas in return.

So back to contractor weapons. Guys posted pictures and everything, and it was cool to see any trends in what we are using out there. Obviously AK -47′s and M-4/AR-15 variants are the top primary weapons. But the various types of other weapons issued and their histories are very interesting. Some are just recaptured weapons that were given to contractors by outgoing military units in the various AO’s, or some are weapons the companies were able to ship into that country. Others were bought in gun markets in the region, and it is fascinating to see what contractors we able to get a hold of.

What I will do below is list every gun mentioned and I recommend going to the post on FB to see the various stories behind these weapons. I did notice that the G-3 was mentioned quite a bit. I got to play around with one in Iraq, but didn’t use it for work. In the photo below, Patrick brought up a heavily modified G 3 that I thought was cool.

The other thing to point out is how many copies of weapons were mentioned. Stuff that was either reproduced by Iraqi factories or stuff that was made in the weapon making villages of Pakistan. Lots of junky weapons that fell apart or barely worked, but were cheap and helped to stand up a contract. It is a huge problem in the industry, and companies continue to outfit contracts with junky weapons and equipment, all because of money or because they do not have the connections to get the good stuff into that war zone. That is the one thing that I continue to see and hear from contractors out there, and I have experienced the same, and that companies are horrible at providing good weapons or equipment. It’s why guys become good at fixing weapons or why folks prefer to bring their own kit–because the companies are horrible at this stuff.

Back to the list. There is also the mention of heavy weapons used, or the use of explosives. Stuff that you would not associate with contracting, but was certainly used at one time or another by contractors in Iraq or Afghanistan. In the early days of Iraq, you saw everything. Now, not so much because regulations and contracts have become very specific as to what can be carried. I saw that change during the 2006 to 2008 time frame, and especially in Iraq. But there are contracts that are out of sight or out of control of the Big Military, and you continue to see the heavy stuff come up on contracts.  So here is the list, and feel free to add in the comments section stuff that you used on contracts. -Matt

 

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This is a PDW Patrick McAleer made in 2007, out of an Iranian G3, in Iraq. Photo Credit Patrick McAleer.

 

Pistols

Glock 19
Glock 17
HS 2000
Caracal F
M 9
SIG P226
Makarov
Turkish Kanuni
Walther P 38
Iraqi Berretta
Browning Hi Power
Walther P 99
CZ 75
.455 Webley
Smith and Wesson Sigma
Norinco NP 22 (Sig 226 copy)
FN P35
CZ 70
Tariq
Zastava EZ9
Ruger P95
.38 Colt Diamondback
Colt 1911
.455 Colt Eley
Tokarov

Rifles


M 16 A2
AK 47
AR 15
M 4
FN FAL
Colt 722
G 3
G 36
Type 56
K 98
Krag
British SMLE
Sturmgewehr 44
SVD
Saiga M 3
Benelli Argo
Remington R 25
Remington 700
Browning BAR
Mosin Nagant
FPK Dragunov
AR 10
Ruger Scout Rifle in .308
AMD 65
HK MR 308
FN FAL para
VZ 58
AR 18
HK 416
East German MPi KM 72
SIG 550

Shotguns

NOR 982
Remington 870
Italian double barrel

Submachine Guns

Swedish K
MP 5
Scorpion
Uzi
Sterling
Krinkov
PPSH 41
Beretta M 12
Beretta PM 12S
Thompson

Machine Guns

MG 42
FN Minimi Para SAW
FN M-249 SAW
M-240/MAG 58
PKM
M 60
RPK
MG 3
RPD
VZ 59

Grenade Launchers

M 79
UBGL 25
HK 69
M 203
M 320/AG 36

Mortars, Grenades and Mines

M 67
RGD 5
M 18 Claymore
Stun
Tear Gas/CS
Improvised Claymores For Defense
Mortars for flares

Rocket Launchers

AT 4
RPG 7

Heavy Machine Guns

M 2
DsHK

Automatic Grenade Launchers

MK 19
AGS 17

Misc.

Crossbows
Regular Archery Bows
Kitchen Knives
ASP baton
Slingshot

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History: George Washington On Starting His Own PMSC To Combat The British

Mr. President, I am a soldier and believe in being prepared. For that and other reasons, I will give my vote for the resolutions of the gentleman from Hanover. Rather than submit to the present condition of things, I will raise one thousand men, subsist them at my own expense, and march myself at their head to the relief of Boston.- George Washington

This is a cool quote from American history that you don’t hear much about. Obviously Washington did not have to raise an army in this fashion, but it is interesting that he put it out there. That he was willing to finance such an army if no one else was going to act.

What is also interesting is that George Washington was very familiar with concept of privatized warfare from his experience fighting with the Royal American Mercenary Regiment (RAMR) during the French and Indian War. He was also a champion of actually paying soldiers as opposed to asking them to do what they did, purely out of love of country. Washington found out that with a volunteer militia, it’s a little hard to keep guys focused when they can’t be home to make money or grow food to support their family. Paying a salary kept their heads in the game, and helped reduce attrition.

The other area of privatized warfare that Washington was involved with was privateering. He actually owned stock in privateering ventures and was a supporter of issuing the Letter of Marque to privateers to fight wars.

The artwork posted below is also interesting. That would be the uniform he wore during the French and Indian War. I noted in the past that this war was significant because this is where Washington learned how to fight and lead men in combat. He learned from the various mercenaries that came to fight in the RAMR, and he used that knowledge and experience and applied it later on. -Matt

 

Charles Willson Peale is the Artist. This is the earliest authenticated portrait of George Washington and shows him wearing his colonel’s uniform of the Virginia Regiment from the French and Indian War. The portrait was painted about 12 years after Washington’s service in that war, and several years before he would reenter military service in the American Revolution. 1772

 

Patrick Henry: “Liberty”

“I have but one lamp by which my feet are guided; and that is the lamp of experience.”

As the British army tightened the noose around Boston, the Virginia Assembly met in an extralegal session to discuss what steps to take in the wake of what was happening up North. The British hoped that by isolating Boston, they could stamp out the revolution. As the speech below demonstrates, the effect was the opposite of what the British desired, for Virginians—and other colonists—realized that “If they can do it to Boston, they can do it to us.”

The words of the debate were later written from memory by William Wirt, and though they may not be the exact words spoken by Patrick Henry and others, the general consensus among historians is that they certainly contain the spirit of Henry’s remarks and are consistent with what we know of his eloquence. He was, in many ways, the voice of the American Revolution. Likewise, the authenticity of the remarks by George Washington has been called into question, but again, they probably accurately reflect his feelings. Loyal almost to the last, he was now thoroughly fed up with the British.

The members address the president of the meeting to gain the floor. The President acknowledges each by the jurisdiction which he represents.

Mr. Pendleton: Mr. President.

The President: The gentleman from Caroline.

Mr. Pendleton: I hope this Convention will proceed slowly before rushing the country into war. Is this a moment to disgust our friends in England who are laboring for the repeal of the unjust taxes which afflict us, to extinguish all the conspiring sympathies which are working in our favor, to turn their friendship into hatred, their pity into revenge? Are we ready for war? Where are our stores—where our arms—where our soldiers—where our money, the sinews of war? They are nowhere to be found in sufficient force or abundance to give us reasonable hope of successful resistance. In truth, we are poor and defenseless, and should strike when it becomes absolutely necessary—not before. And yet the gentlemen in favor of this resolution talk of assuming the front of war, of assuming it, too, against a nation one of the most formidable in the world. A nation ready and armed at all points; her navy riding in triumph in every sea; her armies never marching but to certain victory. For God’s sake, Mr. President, let us be patient—let us allow all reasonable delay, and then if the worse comes to the worst, we will have no feelings of blame. There is no man in this Convention more attached to the liberties of this country than is the man who addresses you. But think before we sacrifice perhaps everything to the spirit of indignation and revenge. Think of the strength and lustre which we derive from our connection with Great Britain—the domestic comforts which we have drawn from the same source—the ties of trade and business—the friends and relatives we have in England. The tyrannies from which we suffer are, after all, the tyrannies of a party in temporary possession of power. Give a little time, take no hostile action, and these tyrants will be overthrown in England and men in sympathy with America will assume authority. Our ills will pass away and the sunshine of the halcyon days of old will come back again. We must arm, you say; but gentlemen must remember that blows are apt to follow the arming, and blood will follow blows, and, sir, when this occurs the dogs of war will be loosed, friends will be converted into enemies, and this flourishing country will be swept with a tornado of death and destruction.

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Libya: Parsons Corporation Destroys All Of Libya’s WMD

Using $45 million from the Nunn-Lugar Cooperative Threat Reduction program, which has helped rid the former Soviet Union of thousands of nuclear weapons since the end of the Cold War, the Pentagon and its Defense Threat Reduction Agency tapped the Parsons Corporation, a construction firm based in Pasadena, Calif., to work with Libya to oversee the rebuilding and safeguarding of the Libyan disposal site, which had been ransacked during the civil war.
Remarkably, the mustard agents stored in bulk containers at the site were untouched and their inspection seals unbroken, American and international officials said. These have all been destroyed, too.
Canada donated $6 million to help restore water, sewage service and electricity to the site, and to build living quarters for Western and Libyan contractors. Germany agreed to fly international inspectors to the site.

This is quite the story and it got very little attention. Libya apparently had some nasty stuff and thanks to some serious wheeling and dealing here, the west and their Libyan allies were able to collect it all and destroy it at this site. All this in a country that is still unstable with lots of folks that would love to get their hands on those weapons.

No word on who the guard force was and perhaps Parsons Corporation contracted that out to a local militia? Although I have to imagine that there was some adult supervision when it comes to the security for this site.  Having worked on similar sites in Iraq that were tasked with destroying munitions, security is paramount. You always have the outer ring of security, and then you have the trusted security covering down on the client and living areas, and their movements around the site. Who knows how this was set up and if anyone was a part of this contract, I would love to add to the record on this.

Either way, good deal and I wouldn’t be surprised if Parsons Corporation applies this same model to Syria. I could also see the furnace that Dynasafe made will also be used in Syria. -Matt

 

 

Libya’s Cache of Toxic Arms All Destroyed
By ERIC SCHMITTFEB. 2, 2014
Even as the international effort to destroy Syria’s vast chemical weapons stockpile lags behind schedule, a similar American-backed campaign carried out under a cloak of secrecy ended successfully last week in another strife-torn country, Libya.
The United States and Libya in the past three months have discreetly destroyed what both sides say were the last remnants of Col. Muammar al-Qaddafi’s lethal arsenal of chemical arms. They used a transportable oven technology to destroy hundreds of bombs and artillery rounds filled with deadly mustard agent, which American officials had feared could fall into the hands of terrorists. The effort also helped inspire the use of the technology in the much bigger disposal plan in Syria.
Related Coverage
Since November, Libyan contractors trained in Germany and Sweden have worked in bulky hazmat suits at a tightly guarded site in a remote corner of the Libyan desert, 400 miles southeast of Tripoli, racing to destroy the weapons in a region where extremists linked to Al Qaeda are gaining greater influence. The last artillery shell was destroyed on Jan. 26, officials said.

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Industry Talk: Prince Targets Aviation And Logistics In Africa

So is this Blackwater part 2?
“It’s similar,” Prince replied. “But we’re not here to serve government or defence projects, we’re not there to build their police force, nothing like that. We’re there to move an NGO, an advanced seismic crew or a drilling crew from a mining company, or if an oil operation needs their camp supported and built.”

The story of Erik Prince starting Frontier Resource Group and focusing on Africa is not new and I have blogged about that when it first came out. But what was missing were the details, or at least more than what was available at the time I posted that stuff. Thanks to the Civilian Warriors book and all the interviews, Prince has been able to talk a little more about this new venture.

So in the articles below, there are some great little details to pluck out and talk about. The first one that I thought was interesting, was the ‘a ha’ moment for Prince as to what area of business he wanted to get into in Africa.

Prince, who has flown since he was 16, said he realised the potential of operating a safe and reliable air service a year ago when the aircraft which was flying him back from a mine site in Burkina Faso nearly crashed.
“A scary moment but also one of clarity,” he said.

I mentioned in my review of his book that he is an entrepreneur and businessman, and he constantly looks at the world through this lens. His ‘a ha’ moment for the creation of Blackwater came from the realization that he needed to be home with his family, and the SEALs and other groups needed a consolidated, all in one training facility. So he identified a market weakness that he could exploit, and also saw the advantage for his personal well being.

He is also a pilot and has had a love for aircraft since he was younger. In his book, he was very proud of all the aviation ventures that BW got into, so this move towards aviation and logistics in Africa makes sense.

The other tidbit is the quote up top and what was directly asked in regards to security work. He was asked by the WSJ on whether this new venture would include armed security work or not? Here is the quote.

Such high costs also reflect the dangers of piracy and civil conflict, but Mr. Prince plays down his firm’s plans in the security realm. “We are not there to provide military training. We are not there to provide security per se. Most of that security”—say, if an oil pipeline or mining camp needs protection—”would be done by whatever local services are there,” including police and private firms. “We don’t envision setting up a whole bunch of local guard services around the continent.”
So the former Blackwater chief won’t employ guys with guns? Well, he says, “that would be the exception, certainly not the rule.”

I should remind the reader that Prince could easily contract the services of other security firms to help in security.  That would mean using Academi or any of the offshoots of his older company. But like he mentioned in the quote, using local police or security firms is more than likely the path, which is already what most Chinese investors and companies are doing.

Although the problem with this arrangement is if those local forces are dependable? Can they deliver services on time and under budget, or is it even a good service? Can they provide high level PSD services for the engineers and workers for those companies? That is where PMSC’s like Blackwater would come in. Also, someone needs to manage those local forces, or look out for the best interest of the client.

I am quickly reminded of the In Amenas gas plant attack in Algeria and how depending upon incompetent local security forces (provided by the government) was a contributing reason why the attack was so successful. You must have a competent security company watching over the local security force that companies are either forced to use, or use because of cost and choice. I look at it from a concentric rings of security view point, and your outer layer should be your least dependable force and your final ring of security should be your most dependable. Ideally all rings are dependable in a perfect world, but that just does not happen in the real world. Another way to put it, is you need security you can ‘trust’.

But back to the articles below, I think this quote speaks pretty loudly as to why dependable and highly capable services are in such high demand in Africa.

“If you’re drilling in some remote area and your rig goes down and you need a new part for your rig; that’s 10s if not 100s of thousands of dollars a day. How do you get that thing quickly and with no excuses?”

Time is money as they say, and guys like Prince can absolutely organize an effort to get that part or human out there.

This also reminds me of another potential problem for companies. What if their equipment gets caught up in a mess like what the Arab Spring has created in the Middle East? For that, a guy like Prince could organize the effort to secure equipment and people until it can be either flown out or convoyed out of that mess.  Those types of contracts remind me of what helped put Executive Outcomes on the map.

I am talking about the Ranger Oil contract that Executive Outcomes had in Angola. Basically things became unstable there and Heritage Oil and Gas turned to EO to save some equipment caught up in the mess. At the time, they were leasing some drilling equipment that was costing over $20,000 a day, and UNITA would not allow the company to get the equipment out of there. EO was contracted to secure that equipment, which they did.

It is also important to note that the Chinese account for the largest group of people kidnapped in Africa. I have talked about this demand for protective services by the Chinese in the past, and how the South African PMSC market has been filling that niche. Lot’s of money being spent on some risky projects–hence the need for security and folks who know what they are doing.

As long as we are talking about money, it is also interesting to pluck some of the quotes that discuss why Africa is so interesting to Prince. China is investing billions into development and resource extraction there.

Mr. Prince won’t share any revenue projections, but his prospectus notes that “China is Africa’s largest trading partner,” with annual flows of $125 billion. Most estimates put that figure closer to $200 billion, a meteoric increase from $10 billion in 2000 and $1 billion in 1980. The U.S., which was Africa’s top trade partner until 2009, registered $100 billion in annual African exchange at last count. China-Africa trade could reach $385 billion by 2015, according to Standard Chartered Bank.

Not only that, but the US is also delving more and more into Africa with it’s military ventures. So Prince is basically gunning to be the logistics and transportation ‘go to guy’ for Africa. If US strategy includes getting more involved with Africa, it will need companies in place that can provide a need wherever it presents itself.

Although he does have some competition, because there are numerous larger companies  that have already been working that angle in Africa. PMSC’s in Somalia and their support of AMISOM are one example. There is still room though, and investors are looking for folks that they trust can do the job. That is a key point here, because Prince has shown capability in the past by making things happen, and putting his money where his mouth is. He spent over 100 million on new products and services when he owned BW, and much of it never reached fruition. But some did, and really paid off for him. I imagine he will do the same with this company. This quote shows why investors would be drawn to him and what has provoked Prince to get into this market in the first place.

“As I was moving around Asia trying to raise money for this private equity fund, a lot of the big investors said, ‘It’s great that you want to be a fund manager, but what we really need you to do is to build a business like you had before. Not a defence services business, but one that can help us operate in the challenging areas and take away a lot of the uncertainty’.”

Pretty cool and I imagine he will apply the same mindset to this business as he did with BW. Research the region, find services that are lacking or non-existent but are needed, or see a coming need for a product or service, and create that service or product to meed those needs. That is how he built BW, and that is probably how he will build this company.

As to what kinds of aircraft he will purchase and bring to the market, who knows?  If you look at the aircraft that AAR has (former Presidential Airways and BW business unit), you can get an idea as to the kind of aircraft Prince might introduce into the game. Here is a quick run down from wikipedia as to what they have used.

Presidential operates CASA C-212 and CASA CN-235 turboprops. Recent contracts have added de Havilland Canada DHC-8 Dash 8 turboprop aircraft to the fleet. The company also operates turbine powered helicopters including Bell 214ST, Bell 412, MD Helicopters MD-530, Eurocopter/Aerospatiale SA 330J “Puma”, and Sikorsky S-61 rotorcraft.

The key for Prince is to invest in aircraft that can carry a lot, has robust fuel capacity, is durable, and can land on the really crappy air strips throughout Africa. The parts need to be cheap as well. I am sure he will find something that fits the bill. Either way, we will keep on eye on this. -Matt

Edit 04/02/2014: It looks like DVN has acquired another percentage of an airline that operates out of Wilson Airport. Here is a clip from the news story about it.

News broke yesterday in Nairobi that DVN had apparently acquired a 49 percent stake in Phoenix Aviation which is based at Wilson Airport in Nairobi and engages in aircraft charters and aircraft maintenance, among other aviation services. First it was Kijipwa Aviation, based in Kilifi, a relatively small aviation company, in which DVN acquired a 49 percent stake in late February, then announcing that they were to bring on line as many as two dozen additional aircraft to boost the operational capacity of the firm. However, the acquisition of a similar share in Phoenix may change those plans as suggestions have been floated already among the aviation fraternity at Wilson Airport that the operations of the two local airlines may be consolidated or aligned under one umbrella or at least they will be working under one central command. While DVN reportedly dished out some 1.2 billion Kenya shillings to acquire the 49 percent stake in Phoenix, no confirmed value could be obtained for the acquisition of the Kijipwa shares. Both investments have been linked to the discovery of significant oil deposits in Kenya and the apparent need of international oil exploration companies to contract a range of services from local Kenyan companies, including aviation.

Frontier Resource Group website here.

 

 

Beyond Blackwater: Prince looks to resources in Africa
Photo
Sun, Feb 2 2014
By Stephen Eisenhammer
After running one of the world’s biggest and most controversial private military groups, Blackwater founder Erik Prince is starting a new venture providing logistics for oil and mining companies in remote and dangerous parts of Africa.
China is increasingly looking to Africa to meet its ever growing demand for natural resources. Trade between the two reached an estimated $200 billion (121 billion pounds) this year. With 85 percent of Chinese imports from the continent being oil or minerals, Prince sees an opportunity.
He wants to use his experience of getting people and equipment in and out of remote places, where there is little or no infrastructure, to help companies looking to exploit abundant natural resources in places like Sudan or Somalia.
The 44-year-old former U.S. Navy Seal became chairman of Frontier Services Group (FSG) this month, a Hong Kong-listed company of which China’s state-backed investment fund Citic owns 15 percent. Prince himself has share options in the firm that would convert to a 9 percent stake.

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