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Kidnap risk increases for Nigeria oil workers

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Kidnap risk increases for Nigeria oil workers

LAGOS, Nigeria—Violence in the oil-rich Niger Delta has prompted a warning from the U.K. government that has seen some expatriate energy workers pack their bags to leave for less hostile working conditions.

But even as some of their workers decide the region is too dangerous, oil companies are toughing it out in Nigeria, battling the constant threat of kidnappings and violence with security that often is no match for militants demanding a larger share of oil revenues for the region.

Britain's Foreign & Commonwealth Office issued an advisory warning against all travel to Nigeria's Delta, Bayelsa and Rivers States and urged British nationals to leave those areas. "This is because of the very high risk of kidnapping, armed robbery and other armed attacks in these areas," the warning stated. "In 15 separate incidents since January 2006, 31 British nationals and over 180 foreign nationals have been kidnapped in the Niger Delta area. One Briton has been killed."

"Nigeria is a real area of concern, particularly for oil companies," said Doug Milne, London-based chief executive officer of Specialty Contingency Risks Ltd., a Lloyd's of London broker. "Any organization sending people to Nigeria should be concerned."

The warning has spurred some oil workers to leave. The Hague, the Netherlands-based Royal Dutch Shell P.L.C. confirmed that some of its expatriate employees have left the region because of the warning. The energy company would not say how many have left or reveal their nationalities.

Attacks

"We said we would support any expat staff in the region if they wanted to leave," a London-based spokeswoman for Shell confirmed. "Some have expressed that desire."

Shell has been a hard-hit target of violent activists. Last year, nine Shell workers in the area lost their lives in the violence and the company's production has at times been interrupted in militant attacks.

The British agency's warning, its first advising Britons to leave Nigeria, has insurers and brokers looking closely at the risks they cover in the troubled area. "It has been one of the triggers of an increased level of interest in this part of the world," said Clive Stoddard, London-based executive director of Aon Ltd.'s crisis management team, of the advisory.

Sensitive issue

Oil companies, meanwhile, are mostly silent on how they guard against violence.

"We try as much as possible not to discuss security," said a Nigeria-based spokesman for Shell. He would not comment on recent press reports that Shell is reducing its output because of security concerns and as a result is considering $100 million in spending cuts and the elimination of at least 200 jobs in the strife-torn region.

Total S.A. was tight-lipped about its security in Nigeria. "The less we talk about it, the more secure we feel," said a spokesman for the Paris-based company. "It's a dangerous country," he added, pointing out that Total employees have been kidnapped and one of the company's onshore oil fields was attacked several months ago.

Total employees are staying put for now in Nigeria, according to the spokesman. "We only have necessary people there," he said of expatriate personnel, which make up a small percentage of the oil company's Nigerian workforce of 3,500 employees.

Chevron Ltd. would not discuss its security operations because of the increasing civil unrest in the region, a London-based spokesman said. "For obvious reasons, security is extremely sensitive," he said in an e-mail.

Experts say the safest, and most obvious, way oil companies can reduce the risk of kidnappings and violence is to eliminate the risk. In the same way Total has sent only essential personnel to Nigeria, other companies should consider posting only those whose presence is absolutely necessary, sources note.

"That's the main one, eliminate the extreme risk," Mr. Milne said of security measures to protect oil workers. Most are advised to remain in Lagos and only venture into more violence-prone areas when they have to go there, he said. "Quite a few (oil companies) will subcontract some of the tasks so they don't bear the risks themselves."

Energy companies and other businesses operating in dangerous areas such as Nigeria have a duty-of-care towards workers that is more important than it was a few years ago, said Mr. Milne. "Don't send employees without them knowing what the risks are," he said.

Employers should be able to show that they properly advised workers of the dangers and gave them adequate training before sending them to an area where they could be caught up in violence, said Mr. Milne.

Combination of resources

The protection of property goes hand-in-hand with taking care of employees in Nigeria, Mr. Stoddard said. "People tend to be located on company property. They've been taken off secure compounds or taken off oil rigs offshore," he said.

"Typically it's a combination of private and public resources" being used to protect oil company property and workers, according to Mr. Stoddard.

Kidnap and ransom insurance is a high priority for oil firms in the region, although none will acknowledge buying it. Underwriters void K&R insurance coverage if its existence is disclosed.