OUTLOOK: Piracy On The Upswing And More Localized

In recent months, reports of piracy on the high seas -- particularly near the Horn of Africa -- have become commonplace in international news reports. Based on data in a newreport from the International Chamber of Commerce's International Maritime Bureau (IMB), the increased level of attention is justified.

The IMB, a London-based organization that collects data on piracy and armed robbery against ships, defines piracy and armed robbery as follows: "An act of boarding or attempting to board any ship with the apparent intent to commit theft or any other crime and with the apparent intent or capability to use force in the furtherance of that act." For the purposes of this article, the term "piracy" will correspond to both piracy and armed robbery against ships. All data presented in this article and the corresponding graphs have been extrapolated from the IMB's January 2009 publication Piracy and Armed Robbery Against Ships -- Annual Report 2008.

The number of actual and attempted acts of piracy and armed robbery in the world's major shipping lanes increased by approximately 11 percent, from 263 in 2007 to 293 in 2008. The latest figure is still down from a high of 445 in 2003, but it continues an upward trend that has become apparent since 2006. The shape of the chart below illustrates this trend.

Number of Actual & Attempted Attacks: 2003-2008
SOURCE: International Maritime Bureau, ICC Commercial Crime Services

As the chart also illustrates, the greatest concentration of acts of piracy have migrated westward from Southeast Asia to Africa in the past six years. In 2003, 170 of the 445 locations of actual and attempted attacks (38 percent of all locations) were in Southeast Asia. Over the next five years, however, the percentage of attacks in that region steadily declined. By 2008, 18.4 percent (54/293) of attacks were in Southeast Asia. IMB attributes the progress in the region to increased vigilance and patrolling by countries such as Indonesia and those in the Malacca Straits.

Africa has since overtaken Southeast Asia as the single region where the greatest percentage of piracy attacks occur in a given year. During the six-year period in question,the percentage of attacks in Africa fluctuated somewhat but remained within the 20- to 30-percent range from 2003 through 2006. Beginning in 2007, the percentage ballooned to 45.6 percent (120/263). Last year, it skyrocketed to 64.5 percent (189/293).

Of the attacks offshore Africa, the incidents became more localized in 2008. As the chart below shows, the percentage of incidents in the Gulf of Aden between Somalia and Yemen constituted roughly 10 to 15 percent of all African attacks from 2003 through 2007. In 2008, however, the percentage surged to more than 30 percent (92/189). In contrast, the number of Gulf of Aden attacks in 2007 was 13 out of 120 total for Africa.

Types Of Vessel Attacks
SOURCE: International Maritime Bureau, ICC Commercial Crime Services

According to IMB, pirates in the Gulf of Aden have become better armed in recent years and are now more capable of successfully carrying out attacks at greater distances from land. For instance, in November 2008 a band of Somali pirates armed with automatic weapons boarded a Saudi Aramco tanker hundreds of miles off the Kenyan coast using grappling hooks. The pirates held the tanker Sirius Star, laden with $100 million worth of crude, and her 25-man crew hostage for nearly two months. Governments in the region have proven ill-equipped to curb such attacks, and the release was secured with the help of Saudi foreign ministry negotiators.

Greater Risk for Tankers

Although pirates prey upon a wide variety of vessels ranging from cruise ships to tugboats, a significant number of ships noted in the report comprise tankers serving the oil and gas industry. The tankers in question carry bitumen, chemicals and other petroleum products, crude oil, liquefied natural gas, and liquefied petroleum gas. For the purposes of this article, all of the above tanker types are grouped into a single "tanker" category.

Share of Africa Attacks In The Gulf Of Aden
SOURCE: International Maritime Bureau, ICC Commercial Crime Services

As the chart above shows, the number of piracy attacks on tankers steadily declined from 2003 through 2006; in fact, the number of tanker attacks dropped by more than 50 percent from 105 in 2003 to 48 in 2006. Moreover, attacks on tankers would constitute a lower percentage of all piracy attacks during this period; tanker attacks would decrease from 26 percent of all attacks in 2004 (87/329) to 20 percent (48/239) in 2006.

The decline in the number of attacks on tankers from 2003 through 2006 paralleled an overarching decline in the number of attacks on all types of vessels during this period.The year 2007, however, marked the end of the decline in tanker attacks. Although the overall number of attacks on all vessels continued to decline, the percentage of attacks on tankers surged to 32 percent of all attacks in 2007. The following year, as the total number of attacks edged upward, the percentage of attacks on tankers declined slightly to 31 percent.

Whether the recent upswing in attacks will continue in 2009 remains to be seen. However, the United Nations in December 2008 approved a measure allowing international forces to fight piracy in Somalia. In addition, there are now regular patrols in the gulf by warships from the European Union, the United States, and China. Early indications suggest these outside interventions are helping to mitigate the problem.

Would you like to suggest coverage of a timely downstream-oriented topic that you believe warrants attention? If so, send your suggestion to Matthew Veazey. Please include "Outlook suggestion" in the subject line.

Matthew V. Veazey has written about the oil and gas industry since 2000. Email Matthew at mveazey@rigzone.com

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