In an effort to avoid a repeat of the bloody siege at an Algerian natural gas production facility last month, Anadarko CEO Al Walker told Reuters today that it will increase security measures at it's Sahara oil projects. Armed militants took control of an Algerian gas plant on January 16 in response to anti-terror efforts in neighboring Mali.

"As I'm sure you can expect, we have taken appropriate actions with Sonatrach (Algeria's state-owned oil company) and with the Algerian government to enhance security for people and our facility," Anadarko CEO Al Walker told analysts on a conference call.

Militants are expected to continue to target infrastructure elements like oil and natural gas production facilities in the region. Output is on the rise at Anadarko's North African outposts, increasing over the fourth quarter by eight percent.

A recent New York Times article outlines the militants' intent to create a "Giant Fireball" at the Algeria natural gas facility. The Times article quotes Lotfi Benadouda, the Algerian plant executive whom the militants singled out as the man in charge. “Their objective was to move the hostages to the plant. They wanted to get to the factory with the hostages, and explode it.”

This is the 'fear premium' in action -- all part of doing business in that volatile region. But with output on the rise and global demand for crude and natural gas inflating, producers have no choice but to keep pumping. That means added security. But if profits continue to outpace analyst expectations for Anadarko, the company can't afford not to hire a brute squad to watch over the operation.

Photo credit: The U.S. Army / Foter.com / CC BY

See Comments