Feral Jundi

Monday, March 12, 2012

Industry Talk: East Africa Hits It Big In Oil, Gas Boom

Filed under: Africa,Industry Talk — Tags: , , , , — Matt @ 3:59 PM

Lately I have been on an energy security kick. There is a lot of money in oil and gas, and the demand is only going higher. Not to mention that things are not very stable in the middle east, so a diversification of sources is in high demand. So how does this impact our industry?

Well for one, security of these wild cat companies that are searching and drilling on land and sea for oil/gas need security partners. These companies are willing to take the risks because the money is there, and capable private security companies are there to help them get there. That last part is important to note, just because thanks to ten plus years of war, we now have companies in this industry who know how to protect people and things in war zones. And especially in war zones that are populated with jihadists….a particularly wicked type of adversary.

These jihadists are also targeting anything to do with the west, to include oil and gas exploration. I wrote about this in my prior post about oil companies being targeted by jihadists in Somalia. Today’s war veterans and contractor veterans know this enemy very well, and they also know how to set up the security of a site to deal with this type of threat.

I also wanted to bring up this quote as a clue to the potential in this industry.

Still, major oil companies are falling over themselves to grab a stake in East Africa, largely by buying out smaller wildcat outfits which made major strikes.
One of these is Cove Energy, a London-listed company. It put itself up for sale in January after reporting one of the world’s largest natural gas strikes in a decade, a field off Mozambique containing an estimated 15 trillion-30 trillion cubic feet of gas, more than Norway’s entire reserves.
On Feb. 22, Royal Dutch Shell offered $1.6 billion for Cove’s 8.5 percent stake in the highly promising Block 4. Four days later Thailand’s state-owned energy company PTT Exploration and Production stepped in with a $1.7 billion bid. On Sunday, India’s state-run Oil and Natural Gas Corp. offered $2 billion.

If you are a private security company that specializes in Africa, then partnering with one of these ‘smaller wild cat’ oil exploration companies could be quite profitable. Any contract with such a company should include a percentage of the profits for the operation, or when the company is sold to a larger oil company. More risk should equal more reward, and hopefully PSC’s are fully realizing the potential in these contracts.(and why not do a profit share with your security contractors doing the work and taking the risk out in the field as well? hint hint)

The other industry angle with this oil and gas boom in East Africa (and West Africa) is that piracy will be increasing as interest in Africa oil increases. There is just too much money floating around on the high seas for pirates or even jihadists to ignore. Hostage taking on land and sea will increase as well, and especially if it is oil executives or engineers crucial to the operation of these sites.

One tangent I would like to quickly expand upon is rare earth minerals. I have to imagine that Africa has sources of minerals not yet discovered, that will be vital for these growing and hungry economies of the west and east. All the stuff that goes into computers or phones, the magnets used in electric/hybrid vehicle motors or in weapons like guided missiles, or gold and silver, are all much needed by all of the industrialized nations of the world. The protection of these mining operations and the protection of the transport of this stuff, are all areas that this industry handles. Especially with mineral finds that pop up in war zones.

Interesting stuff and it is definitely an area of this industry that we should all be paying attention too. Keep your eyes peeled for energy security related work and for new discoveries. –Matt

 

East Africa hits it big in oil, gas boom
Feb. 29, 2012
East Africa is emerging as the new hot zone for oil and natural gas exploration, with major discoveries by Anadarko of the United States and Italy’s Eni in the Indian Ocean off Mozambique and by Norway’s Statoil off neighboring Tanzania.
Even war-wracked Somalia, further north in the Horn of Africa, is part of the drive for energy resources in the region, with a Canadian company, Africa Oil, expecting to start producing within the next couple of months in the northern autonomous enclave of Puntland.
But the big prize there is the offshore oil and gas fields that Somali officials say contain more than 100 billion barrels of oil, more than Kuwait. If that’s the case, Somalia, torn by war since 1991, would become the seventh largest oil nation.

(more…)

Wednesday, February 15, 2012

Industry Talk: Triple Canopy Awarded $159.9 Million For Afghanistan Security Services

Congrats to TC, but I have to say that I am not too interested in promoting their job for this. For the simple reason that the pay is too low and the leave schedule sucks. As it stands now, you have to work 344 days in order to get the bonus. That’s if the contract is still in place after a year. Who knows what will happen in Afghanistan a year out?

The other thing is burn out. Work is nice, but if you are working 12 hour days for 344 days out of the year, then that is a horrible schedule. For that reason, I think TC is going to have a tough time keeping this thing staffed. What I could see happening with this  is that guys use this contract as a ‘stepping stone’ contract in order to get into a better paying/better leave schedule job. Especially for those guys that have families.

In my opinion, I think this is a poorly constructed contract if these are the terms. The industry standard (in my opinion) for pay in a war zone like Afghanistan or Iraq should be more in the neighborhood $400 to $600 a day for static, to reflect the various management positions and seniority of contractors within the company. I should also note that such contracts like WPS is an excellent model for an ‘industry standard’ for pay. That is what this contract should have been modeled after, and DoS’s WPS program get’s it right in that department.

The industry standard for leave should be more around 2 to 3 months on, and about 1 month off. That is a great leave schedule, and the contract should allow some flexibility within that leave schedule to allow for emergencies and contractor personal choice. Requiring a contractor to work 344 days in a war zone is a recipe for disaster. Guys will burn out and their families will hate them for being away that long. I doubt that you will even see guys complete the contract to get the bonus, just because they will jump on the first gig that comes up with better pay and a better leave schedule. I know that is what I would do.

Even the hours worked is dumb. In my personal opinion, an 8 hour shift, working 6 days a week with one day ‘off’, is far better than a 12 hour shift 6 days a week. (especially if you are wearing kit all day long and working 344 days a year) I will also say that if this contract does lose guys because they burn out, that those left on the contract will be working a lot of hours without any days off. Just ask the AGNA guys what that is like when contractors bail ship because the company sucks or there are better gigs elsewhere. The guys that are left are the ones having to make up for a lack of manpower.

It is also a threat to the security readiness of a base, and could lead to a default on contract if there is a high attrition rate. Staffing a contract is serious business, and if folks are jumping ship because it sucks, then that has all sorts of consequence. Now imagine low staffing and low morale throughout a guard force because of being over worked, mixed with a high enemy threat or even enemy attacks?  We are not talking about security at some mall in Sandusky Ohio, we are talking about the protection of FOB’s filled with military and civilians in an active war zone, all depending upon that contracted guard force and it’s abilities.

In other words, this contract will have issues. That’s too bad, because I thought the Marines would have been smarter about this, and especially when they had more choice in the formation of this ‘best value’ contract. They should have asked this community what an appropriate contract would look like, and it just seems to me like they created another TWISS-like contract. Too bad…

The other thing I was curious about is if Triple Canopy gets paid for every guy they train?  Meaning when they train a contractor for this gig, they bill the government all the relevant costs. Why this matters is if the contract sucks and is set up to be a revolving door contract for guys, then TC will have to train up more contractors to keep it staffed. So what is TC’s incentive for training these guys and keeping them on the contract in Afghanistan? If anything, they benefit from a contract where contractors ‘don’t’ stick around so they can keep charging the government for training.

Which brings up another crucial point. When you set up a revolving door contract like this, then you lose something that is absolutely vital to organizations and security in war zones. Unit cohesion. Imagine being on a contract where no one sticks around? Where a new contractor shows up every week, or the management jumps ship every other week? Talk about instability. lol So basically you will have a contract where folks are constantly adjusting to new people, and all along you will have the security of a FOB to focus on. How can you trust the guy to the left and right of you, if A. you don’t know who they are and B.you don’t know if they will be there from week to week.

Unit cohesion is so hard to create in a company anyways, but if the contract itself does not lend itself towards making contractors happy and keeping them on the gig, then you can kiss any kind of unit cohesion good bye. And actually, that will be a cause of internal problems. I dare any military unit to try the same thing in a war zone, and see what the end result becomes. And this is what you want protecting these bases?

I sometimes wonder if the military should be setting up these contracts in the first place. How is it that the federal government understands how to set up these things (like WPS), but the military does not?  Could it be that the military purposely constructs poor contracts because contractors are the competition? What incentive do the Marines have in constructing a contract where a company that comes in to replace their Marine force, does a better job than that Marine force– because the contract lends itself to success?  Why would they want that company to be successful, and ‘show them up’?  Food for thought when it comes to the public versus private discussion about this industry, and when it comes to the principal-agent problem.

Finally, it is very simple to understand the game here. You find the industry standard within that war zone, and you stick to that standard. If you want to lose people and could care less about the quality of the contract/services, then by all means set up your contract below that industry standard. Go cheap, pay peanuts, and get your monkey’s.

On the other hand, if you want to attract the best of the best within an industry, then you need to offer incentives that are ‘better’ than the industry standard. And if you want a best value contract that has some degree of stability, then match what the industry standard is, choose a good reputable company, and manage it well. That is my thoughts on the matter. –Matt

 

Triple Canopy Awarded $159.9m for Afghanistan Security Services
By DOD
Tuesday, February 14, 2012
Triple Canopy, Reston, Va., was awarded a $159,972,048 firm-fixed-price contract. The award will provide for the security services in Afghanistan. Work will be performed in Afghanistan, with an estimated completion date of Jan. 26, 2017. The bid was solicited through the Internet, with eight bids received.  The U.S. Army Contracting Command, Rock Island, Ill., is the contracting activity (W560MY-12-C-0002).
Link to news here.
—————————————————————
From thread at SOCNET Forum
@camp leatherneck
$200 daily
6-12 hr days a week with the possibility for more hours
(1) 21 day leave period
12k bonus for contract completion
2 week train up on TC site followed by deployment @camp lejune
—————————————————————
From Triple Canopy’s Career section–Afghan Guard, Afghanistan
Position Responsibilities
-Act as armed security officer
-Responsible for internal security shift
-Perform unarmed screener duties by searching visitors, their vehicles and their belongings. Screeners will be proficient utilizing hand-held metal detectors, walk-through metal detectors and High throughput personnel inspection systems.
-Possess the capacity to acquire a good working knowledge of all aspects of contract security
-Must satisfactorily complete all Government required (and supplied) training and certifications prior to employment
Essential Skills and Experience
-US Citizen
-Must have a valid US Driver’s License and US Tourist Passport
-Honorable discharge from the military (if applicable)
-Able and willing to DEPLOY for one (1) year with one (1) 21-day R&R rotation
-Posses or be able to obtain a DOD Secret Level Clearance.
-Be at least 25 years of age
-Posses one (1) year of Military/ Police experience to include the use of personnel and vehicle security screening devices.
-Preferred security experience in the Middle East region.
-Possess a certificate of successful completion of a basic or advanced security guard training and certification program administered or recognized by the Government or professional organizations
-Must have no felony or domestic violence conviction. Record of recent recurring misdemeanors may adversely impact candidate’s suitability rating
-Employment with Triple Canopy is contingent upon a favorable background check to Include no serious financial problems in the past seven (7) years
Physical Demands and Work Environment
Able to perform internal security guard services, at any potential internal security posting, for 12 hours, while donning all required personal protective gear.

Friday, February 10, 2012

Afghanistan: Private Security Transition To The APPF Looking Messy…. And Dangerous

Filed under: Afghanistan,Industry Talk — Tags: , , , , , , — Matt @ 6:22 AM

Companies have long hired private guards precisely because they don’t trust the Afghan police to protect them in a crisis. The United Nations used Afghan police to guard its staff housing until an 2009 attack on a residential hotel in which Taliban assailants quickly made it past police guards and killed five U.N. staffers. The U.N. has since increased its security to include foreign guards.
Afghans working with APPF have gone so far as to urge the business licensing agency to “stop stalling the process,” according to a letter sent to U.S. government officials by a development company and obtained by the AP.

I posted two relevant stories below about Afghanistan and contractors. The first is this joke of a plan about replacing all PSC’s with the government force called the APPF.  Although according to the article below, it doesn’t look like it will happen on time, that the forces are not being properly trained and prepared, that the various clients they serve will have very little to say about the quality or conduct, and the best part, it will be more expensive. So some deal this APPF will be for those clients in Afghanistan that have to use them. lol

And as budgets for aid projects are decreasing, the APPF program is likely to increase security costs substantially.
An APPF guard will cost at least $770 a month, according to an AP analysis of official government figures, while private security providers contacted for this story say they usually charge $510-$630 a month per guard.
To avoid pay cuts for guards, individual companies will have to supplement salaries. And any costs for RMC managers will be on top of this. Once these expenses are figured in, security costs could easily double under the APPF.

The second article below is about all of the incidents over the years of Afghan troops, police or PSC’s that were either mentally insane or the enemy, and killed their western partners. The quote up top is from the first article, and the proof of how many incidents is in the second article.

Supposedly friendly Afghan security forces have attacked U.S. and coalition troops 45 times since May 2007, U.S. officials say, for the first time laying out details and analysis of attacks that have killed 70 and wounded 110.

Oh yeah, that is an assuring statistic. And this second article really didn’t get into all the attacks against contractors, but hey, I guess we don’t count?

All I know is that the APPF is going to be one hell of a money making machine for Karzai, and one hell of a headache for those clients being forced to use them. –Matt

 

Afghan private security handover looking messy
By HEIDI VOGT
February 10, 2012
The push by Afghanistan’s president to nationalize legions of private security guards before the end of March is encouraging corruption and jeopardizing multibillion-dollar aid projects, according to companies trying to make the switch.
President Hamid Karzai has railed for years against the large number of guns-for-hire in Afghanistan, saying private security companies skirt the law and risk becoming militias. He ordered them abolished in 2009 and eventually set March 20 of this year as the deadline for everyone except NATO and diplomatic missions to switch to government-provided security.
Afghan officials are rushing to meet the cutoff with the help of NATO advisers. But with fewer than six weeks to go, it’s likely that many components will still be missing on March 20. And even once everything falls into place, higher costs and issues of authority over the government guards will remain.
The change imperils billions of dollars of aid flowing into Afghanistan, particularly from the United States. In a country beset by insurgent attacks and suicide bombings, the private development companies that implement most of the U.S. aid agency’s programs employ private guards to protect compounds, serve as armed escorts and guard construction sites.
On March 21, approximately 11,000 guards now working for private security firms will become government employees as members of the Afghan Public Protection Force, or APPF. They will still be working in the same place with the same job. Except now they’ll answer to the Interior Ministry.
“We don’t want to have security gaps. This is really important to our customers and to us,” said the head of the APPF, Deputy Minister Jamal Abdul Naser Sidiqi. It will happen, he says, because the presidential order says it has to.

(more…)

Thursday, January 26, 2012

Libya: The Swiss Contracted Aegis To Protect Their Embassy In Libya

The government had justified its choice to employ a private firm with local knowledge to guard the Tripoli embassy because it needed time to draw up an operational plan and reach a decision on whether to proceed.

This story has it all–from irony to hilarity. Here are the Swiss, whom for hundreds of years were known for having some of the best mercenary armies in the world, and they contract with a foreign firm called Aegis to protect their embassy in Libya? I guess the Swiss Guard is good enough for the Pope, but not good enough for the Swiss Embassy? lol It is also ironic because the Swiss wanted to ban the use of PMSC’s, but here they are contracting the services of one to protect their embassy. hmmm…..

All kidding aside, the way I look at this story is that it was an honor that Aegis was chosen and given such a contract. And the Swiss government has within it’s right to contract the services of such a company, if it makes sense for that particular situation. I would also be curious about this quote, because the article does not give enough information as to the real numbers here. Like what was the length of time for the Aegis contract? Was this just a three month contract, or what? Because if they are going to throw around a cost effectiveness statement like this, then we need to see the numbers.

The foreign ministry said on Thursday that the Aegis contract will have cost SFr960,000 altogether. The cost to deploy members of the Army Reconnaissance Detachment 10 should be around SFr600,000 for six months.

If anyone from the company has anything to say about the contract itself, please feel free to do so in the comments section. Because this particular article makes it sound like Swiss Commandos are having to storm in and save the day.

I suspect otherwise, and if anything, Aegis did exactly what they were asked to do. Provide security on the ground for the start up of this thing, and meanwhile the Swiss can figure out a plan for what they want to do. –Matt

 

Commandos ready to secure Tripoli embassy
Jan 26, 2012
Swiss special forces will officially take over security tasks at Switzerland’s embassy in Libya on Monday, replacing private firm Aegis.
The government’s decision to hire Aegis for over three months was widely criticised in Swiss political circles. Although the company is headquartered in Basel since 2010, it also employs 20,000 mercenaries who are deployed mainly in Iraq and Afghanistan, making it one of the world’s biggest private armies.
The government had justified its choice to employ a private firm with local knowledge to guard the Tripoli embassy because it needed time to draw up an operational plan and reach a decision on whether to proceed.
The cabinet has since drawn up legislation banning private security firms operating in conflict zones or holding companies in this sector from being based in Switzerland.
The foreign ministry said on Thursday that the Aegis contract will have cost SFr960,000 altogether. The cost to deploy members of the Army Reconnaissance Detachment 10 should be around SFr600,000 for six months.
The embassy in Tripoli is the only Swiss representation abroad where Swiss soldiers will be responsible for security.
Story here.

Tuesday, January 24, 2012

Industry Talk: Mexico Drug War Boosts Security Business

During the five years since President Felipe Calderon took power and declared war on drug cartels, Mexico has been shaken by 47,000 drug-related murders as well as rocketing levels of kidnapping and extortion.
In the same period, Mexico’s biggest security firm, Multisistemas de Seguridad Industrial, says it has grown by 70 percent.
It now has an army of more than 10,000 private security guards — including many former soldiers — who are licensed to carry guns to protect the company’s 2,500 Mexican clients.

Multisistemas is like the G4S of Mexico? I had no idea it was that big, and I have never even heard of this company before. So that is why I wanted to put this one up in the archives for reference. Also, Multisistemas might be a good company to throw a resume at if you would like to offer your services there. Especially for the high risk PSD type operations.

If anyone has anything else to add about Multisistemas, feel free to do so in the comments. –Matt

 

Mexico drug war boosts security business
Amid the violence, Mexico’s rich get ID chips, armored cars and gunmen on call.
Ioan Grillo
January 21, 2012
Mexico’s wealthy embed GPS chips under their skin, fatten their SUV’s with bullet proof armor, and hire trucks of gun-toting bodyguards to follow them to the shopping mall.
While Mexico’s merciless drug war has scared off tourists and investment dollars, it has fed one niche industry: private-security services.

(more…)

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