The cost of protecting individual oil & gas staff in Iraq can be as high as $6,000 per day, with a minimum cost of $2,000 per day, according to an anonymous source. At the lower end of the cost ladder, a local security company in Iraq, would charge $2,000 to $3,000 a day for a team to protect one or two people, likely in an non-armoured vehicle.
“At the top end of personnel security, a solution would include B6 Armoured vehicles, including a PSD trauma medic and would cost $5,000 to $6,000 per day,” the source told Oil & Gas Middle East.
To put a cost on the security of pipeline repairs and personnel security varies depending on the nature of the threat and the infrastructure that requires protecting; however, three thousand dollars a day is probably a minimum level of expenditure to secure a well-head. The ability to secure assets is constrained by costs.
“Shell spends around 40% of its security budget, equating to around $130m per annum, on average over three years according to leaked company accounts, on the Niger Delta alone, where it produces over 1mn bpd of oil. This amounts to around 36 cents per barrel or around 0.3% of the price of a barrel of crude. It’s not a lot, even in a region with a high cost of security outlay,” said Daniel Brett, director of Strategy, oil security services, Blacksand Maritime, Blacksand Group.
Decisions regarding the continuity of operations will depend on long-term margins, according to Brett. In the case of Nigeria, producers are retreating from onshore production for deep sea production with floating production, storage and offloading (FPSO) vessels.
