Feral Jundi

Sunday, August 18, 2013

Lebanon: Turmoil No Clear-cut Gain For Security Firms…Yet

A loser is someone is someone — individual or group — who cannot build snowmobiles when facing uncertainty and unpredictable change;
Whereas,
A winner is someone — individual or group — who can build snowmobiles, and employ them in an appropriate fashion, when facing uncertainty and unpredictable change.-Col. John Boyd

There are a couple of factors going on in Lebanon that are driving the security market there. One is the situation in Syria and the other is a massive gas field off of the coast.

With Syria, you see a lot of spill over across the borders that include refugees or combatants. As Syria continues to fall and morph into a massive jihadist playground, it’s neighbors will suffer. This surge of militant fighters streaming into Syria all have agendas and all are looking to cause chaos amongst their various enemies in the region. Sunni versus Shia, devout islamists versus infidels, etc..  Lebanon, will be impacted, and security in all of it’s forms is what the people will demand and seek if the state cannot provide it. Here is a quote about this reality.

The A to Z Group, a security company offering guard services and cash transfer protection to corporate clients and Lebanese public institutions, hired an additional 100 people about six months ago to meet demand, bringing its total staff to 250 people, General Manager George Ghorayeb told The Daily Star.
“We cover all of Lebanon and I’ve noticed that clients everywhere are afraid of the situation. The biggest demand is for residential and corporate guards,” he said. “There has been a big increase in buildings requesting services because they are scared.”
Elie Georgiou, the executive manager of PRO.SEC, a Lebanese firm that employs 800 people and offers physical security and close protection services, said business remained stable between 2012 and 2013, but there had been an increase in job seekers.

As for energy, the Levant Basin gas fields and rush of Cyprus and Israel to get in there and tap into it, is causing Lebanon to rethink it’s views on those fields. It wants in on that gold rush. (article posted below)

Competing claims by Israel and Lebanon to about 215,000 acres of potentially mineral-rich maritime territory and increasing instability caused by the Syrian civil war could also complicate the effort.
Lebanon began to tap its onshore oil resources in the 1960s, but the long civil war stopped all development. While the government has known about the resources lying off the Mediterranean coast for decades, the focus did not shift there until 2000. Political infighting, a major war with Israel and long stretches without a government have hampered decision-making since then.
Officials swung into action only recently, after Israel and Cyprus began developing their natural gas reserves in earnest. The Petroleum Administration, responsible for negotiating oil and gas contracts, was supposed to be appointed early last year, but squabbling over representation for the country’s different religious sects delayed the process by months. Ultimately, the six seats were given to men from each of Lebanon’s six largest religious groups.

So with that said, if Lebanon wants to do business with those companies that can extract this resource, it will have to get it’s house in order politically, and provide for the security needs of these companies. Enter the PMSC’s.

The first article I posted below delves into the potential for private security and gives a glimpse into the market of force in Lebanon and here is a quote that grabbed my interest.

This might be poised to change since many of the international firms that thrived off Western military contracts in Iraq and Afghanistan are diversifying operations and looking to new markets, Olver of Kroll said.
“The security industry in general is in crisis, so a lot of international companies are looking for the next big thing or to diversify into the next little five or six things,” Olver said. “A lot of the international oil and gas companies have set up one-man offices in Lebanon since the oil and gas tender round is about to start and a lot of security guys are looking to that sector. They see that the oil companies they already service in Libya are looking at Lebanon, so a lot of them have positioned themselves to be able to provide services in Lebanon.”

Interesting stuff and we will see how it goes?  Although the question remains, is turmoil good or bad for the security industry there?

I would say that security contracts pre-Arab Spring were of one type and quantity, but now that the market has changed, that security companies are probably having to adapt to the ‘new’ security requirements that have materialized as an outcome of the Arab Spring. Those companies that can evolve and innovate to meet those new security requirements will stand to survive the changing market.  Adapt/evolve/innovate–or die. Or how Boyd would put it, winners are those that can ‘build snowmobiles’. –Matt

 

 

Turmoil no clear-cut gain for security firms
August 19, 2013
By Lysandra Ohrstrom
As outbreaks of violence across the country become increasingly routine, one would expect Lebanon’s private security companies to thrive. But the global trends that have reshaped the international private security industry over the past few years and heightened risk aversion on the part of governments and corporations have complicated what would otherwise be a straightforward economic success story. Michael Olver, the director of Kroll’s Middle East business intelligence unit, said Lebanese firms were likely to see sustained or increasing demand for services from their existing stalwart clients like embassies, which typically boost their spending on security when the situation deteriorates in order to maintain operations.
At the same time, they will probably see a reduction in the number of multinational corporate clients, he said.
“Large international private sector firms are already evaluating the risk-return balance for having large offices in Lebanon and are going to be re-evaluating the need for a continued large-scale presence,” he told the Daily Star.
Kroll, which provides personal protection to high-level executive clients visiting Lebanon in addition to its business advisory and fraud investigation services, has already seen GCC nationals scale back travel to the country due the bans many Gulf countries have imposed.

(more…)

Wednesday, March 14, 2012

Colombia: Oil Companies Say Security Is Government’s Job, And The Defense Minister Disagrees

Filed under: Colombia,Industry Talk — Tags: , , , , , , — Matt @ 3:57 PM

“It’s impossible to maintain any longer our current security plan–one that was effective years ago when there were very few oil companies and fields to care for,” the minister said Tuesday. “There are now 130 oil companies out there.”

Very interesting news in Colombia. Lately there has been a spike in energy sector attacks by ELN and FARC. They are successful because they have reduced the size of their attack forces, which then helps them to attack more targets and thin out the government forces assigned to stop them. The ‘few and the many’ from the new rules of war comes to mind. Also, it is very easy for this few and many force to go on the offensive and cause damage. Just look at what MEND was able to accomplish in Nigeria?

“Before there were movements that were more massive,” Gutierrez said. “Now clearly it’s more individuals and cells, which is a different presence from what it used to be.”

Now combine these tactics with a highly dispersed government force trying to cover down on 130 oil companies and all of their infrastructure/people, and you can see why the defense minister would want the oil companies to pay for their own security. To help the government out because there are just too many people and things to protect against such a dispersed force.

Another thing I wanted to mention is that these oil companies need to realize that Colombians are paying for their protection, as they make oodles of money selling that stuff all over the world. That world market for oil will increase if Iran is attacked or nations fall to revolution.

So to me, this is a classic case where the oil industry will fight to keep getting their good deal and ‘free government security’.  I say make them pay for their own security so the government’s police and military can focus on serving the people and not just serving oil companies. Just a thought.

Also, these attacks coincide with another big development. Colombia is auctioning off 109 oil blocks to international oil companies. The value of those blocks depend upon how secure they are. Who wants to buy an oil block that is in a dangerous area, which would then equate to more risk and more cost?  So security of these sites is crucial to Colombia in order to get more action and attention in these auctions. The FARC and the ELN know this, hence why they are increasing attacks.

But back to private security. Colombia should continue to press the issue of getting PSC’s back in the game there. The companies should be investing in their own security. I compare it to these shipping companies that want the government to pay for all of their security in pirate infested waters, or depending on government to save the day. Hopefully Colombia’s defense minister can press the issue. –Matt

 

Oil companies in Colombia say security is government’s job
Wednesday, 10 August 2011
Dan Molinski
The head of an association of multinational oil companies operating in Colombia said Wednesday it’s the government’s job, and not that of the companies themselves, to provide security to oil workers and infrastructure against rebel attacks.
“We as a sector understand very clearly that security will be provided exclusively by the state,” Alejandro Martinez, president of the Colombian Oil Association, told Caracol Radio.
Martinez’s comments come one day after Defense Minister Rodrigo Rivera said the sharp growth in Colombia’s oil sector has made it impossible for military and police to adequately protect all oil installations, many of which are located in remote regions near guerrilla strongholds.
The defense minister said oil companies need their own private security forces to help government troops combat a wave of attacks and kidnappings by Marxist rebels that has threatened to derail the oil industry’s four-year growth spurt.

(more…)

Friday, November 4, 2011

Industry Talk: Erinys Talks About Picking Private Security In Iraq

In relation to the cost of security, there is an old saying: “if you have a five dollar head, then wear a five dollar helmet” – in other words, if you value what you have you are willing to pay to protect it.

This is cool. Erinys did a lot of great work in Iraq back in the day, and they will no doubt continue to be involved with oil security in Iraq now and into the future. So it is great to hear them talk about what they think is important for picking a PSC for operations in Iraq.

What I really liked though was the quote up top. I will have to use that one in the future, and it is just another way of emphasizing what happens when you go cheap. Especially in Iraq, and especially as the troops leave and oil security forces continue to face an active insurgency. –Matt

 

Picking private security in Iraq
November 3rd, 2011
Oil companies in Iraq still need to factor in a security cost overhead as part of doing business in the country in order to protect their people and assets. John McCaffery, Managing Director of British private security firm Erinys, gives his guide to choosing the right provider.
The securing of personnel and assets is a complex amalgam of procedural, technical and physical methods that establishes layered security “architecture” with multiple zones.
If one considers the client and a project as the core of an onion then layers of skin that surround the core would represent the security “zones” that protect the client.
In relation to the cost of security, there is an old saying: “if you have a five dollar head, then wear a five dollar helmet” – in other words, if you value what you have you are willing to pay to protect it.
As such it is important to note that the provision of a professional security architecture is expensive anywhere in the world. ?In Iraq though it is more so, given the cost of shipping in equipment and the labour rates of professional security personnel. This is compounded by the need to train and equip local personnel and the extremely challenging regulatory environment in which international PSC’s are required to operate.

(more…)

Friday, June 17, 2011

Iraq: In Rebuilding Iraq’s Oil Industry, US Subcontractors Hold Sway

“The strategic interest of the United States is in new oil supplies arriving on the world market, to lower prices,” Mr. Kuzyaev said.
“It is not important that we did not take part in the coalition,” he said, referring to the military operations in Iraq. “For America, the important thing is open access to reserves. And that is what is happening in Iraq.”

This is an area of Iraq reconstruction that everyone is watching. Because every drop of oil that can be extracted out of the ground in Iraq, will only help to feed a very hungry global oil market.

The article below also made a key point which is worth mentioning again. US companies will definitely play a crucial part in building and maintaining oil infrastructure and drilling in Iraq. Although it would have been nice for the US and it’s coalition partners to have even more of a share of oil contracts there, but politically speaking, it just wasn’t in the cards.

Probably the biggest point to mention here is how much money American companies stand to make with their oil services contracts:

“Iraq is a huge opportunity for contractors,” Alex Munton, a Middle East analyst for Wood Mackenzie, a research and consulting firm based in Edinburgh, said by telephone.
Mr. Munton estimated that about half of the $150 billion the international majors are expected to invest at Iraqi oil fields over the next decade would go to drilling subcontractors — most of it to the big four operators, which all have ties to the Texas oil industry.

And with that kind of money and company presence in Iraq, security will be very important in these post war years. Companies like Edinburgh International are already in the mix for energy security work in Iraq, and I expect to see more of that. –Matt


In Rebuilding Iraq’s Oil Industry, U.S. Subcontractors Hold Sway
By ANDREW E. KRAMER
June 16, 2011
When Iraq auctioned rights to rebuild and expand its oil industry two years ago, the Russian company Lukoil won a hefty portion — a field holding about 10 percent of Iraq’s known oil reserves.
It seemed a geopolitical victory for Lukoil. And because only one of the 11 fields that the Iraqis auctioned off  went to an American oil company — Exxon Mobil — it also seemed as if few petroleum benefits would flow to the country that took the lead role in the war, the United States.
The auction’s outcome helped defuse criticism in the Arab world that the United States had invaded Iraq for its oil. “No one, even the United States, can steal the oil,” the Iraqi government spokesman, Ali al-Dabbagh, said at the time.
But American companies can, apparently, drill for the oil.
In fact, American drilling companies stand to make tens of billions of dollars from the new petroleum activity in Iraq long before any of the oil producers start seeing any returns on their investments.
Lukoil and many of the other international oil companies that won fields in the auction are now subcontracting mostly with the four largely American oil services companies that are global leaders in their field: Halliburton, Baker Hughes, Weatherford International and Schlumberger. Those four have won the largest portion of the subcontracts to drill for oil, build wells and refurbish old equipment.

(more…)

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