06-06-2004, 07:02 AM
<b>Fear Enters the Pipeline of Saudi Oil Industry</b>
Sat Jun 5, 7:55 AM ET Add Top Stories - Los Angeles Times to My Yahoo!
By Megan K. Stack Times Staff Writer
DHAHRAN, Saudi Arabia â In the desert washes where Americans first found this kingdom's black gold, Saudis scrambled this week to harden their defenses. New security checkpoints cropped up at the edge of the vast tangles of steel in the oil fields. Makeshift sniper nests appeared around town. A Saudi magnate logged on to an Israeli settler website for a few tips on home fortification.
Last weekend's carnage by suspected Islamic militants in the nearby petrochemical hub of Khobar drove the price of oil to a new high and laid bare an uncomfortable truth: The world oil market depends heavily on a calm that seems to be vanishing in this volatile desert kingdom.
Many people here believe that after years of threats, a struggle aimed at wrecking Saudi Arabia's storied oil industry has begun. The nature of the violence has morphed; suicide bombings at housing compounds in Riyadh gave way to two major shooting rampages at oil companies last month. Workers are no longer rattled or nervous â they are scared.
Saudi stability once seemed a relatively safe bet; now analysts are questioning the security of the kingdom's oil facilities and the tight grip of its ruling family.
After gunmen killed 22 people last weekend, then vanished into a neighborhood swarming with Saudi commandos, official explanations were tinged with inconsistencies and marked by inexplicable security lapses.
"Every society secretes its evil. We have our share, and you have your share," Abdallah S. Jumah, president of government-owned oil company Saudi Aramco, said in an interview here. "This is our share."
"The other day shouldn't have been allowed to happen, because they knew it was coming," said Tracy Thompson, a 43-year-old substitute teacher married to an Aramco employee. "And even if they catch these [gunmen], so what? There's another 200. It's very frustrating because we know there could be sympathizers living next door."
Tight Security
Saudi officials scornfully dismiss the suggestion that terrorism could block the flow of oil. It's one thing to blow up a housing compound or open fire at a lightly guarded firm, they say, but quite another to obliterate a facility that pumps, transports or loads oil. The latter, they insist, is virtually impossible.
Wrapped in layers of fencing, barbed wire and hydraulic barriers, watched with cameras and night-vision goggles, Aramco's oil facilities are monitored by more than 5,000 guards. Backed by Saudi troops, armed guards patrol on foot, in cars and in the sky.
"You'd need a nuclear power," said Ibrahim Muhanna, advisor to the petroleum and mineral resources minister. "To damage the biggest oil facilities you'd need to come from the sea, like only the U.S. is capable of."
But even if the kingdom's heavily fortified network of pumping stations and ports prove immune to assault, there is a soft spot: The workers. About 6 million foreign engineers, software experts, schoolteachers and cooks live in Saudi Arabia, and they keep the oil business humming.
Now foreigners are barricaded in gated communities, terrified to venture outside. Some are abandoning Saudi Arabia altogether. Workers at Aramco estimate that dozens of employees have resigned since last weekend.
Nervous workers are urging their spouses and children to leave the country for the summer, or longer. Many are quietly looking for new jobs, hoping to line up a financial escape route.
Saudi Arabia has larger proven oil reserves than any other nation and has long served as a sort of relief valve for the global market: In a pinch, Saudis can easily pump extra crude, which tends to drive down prices and calm markets.
Already the top oil exporter, the kingdom could pump still more. It is producing 9.1 million barrels a day but has the capacity for 10.5 million barrels, Muhanna said.
<b>The kingdom has responded to many a global crisis by increasing production â during World War II, the Korean War, the Iranian oil cutoff, the Iranian revolution and the 1991 Persian Gulf War (news - web sites). On Thursday, OPEC (news - web sites) agreed to raise production yet again after prodding by an insistent Saudi Arabia. </b>
But terrorism has its price, and in the case of oil, it's not a small one. Analysts say fear alone fattens the price of a barrel of oil by $4 to $10. Even before last weekend's attacks, the suspicion that Saudi Arabia might not be able to protect its oil from sabotage was driving prices to new heights. This week, the price peaked at a record $42 a barrel.
Saudi Arabia takes seriously its position as the world's biggest exporter of crude â and even more seriously the petrodollars that helped reinvent this hardscrabble desert country into a gleaming and sophisticated kingdom in just a few decades.
"People come here from Harvard with their funny views, but they don't live here and they don't understand how things work," said Hassan Husseini, a former Aramco planning consultant. "This oil is not just oil. It's our water, it's our farming and it's our hospitals."
Two Scenarios
But it's precisely the oil industry â and the royal family it supports â that Saudi Arabia's radical Islamists yearn to destroy. The insurgents deride the government, which they deem apostate, for cooperating with the United States while growing fat on oil profit.
There are only two recipes for immediate disaster in Saudi oil, and few analysts think either one is likely.
⢠A cataclysmic strike on a key oil facility, particularly the massive refinery in Ras Tanura, could clog production for months.
⢠The spasms of suicide bombings and shootouts could grow strong and fast enough to break the hold of the ruling family, leaving a vacuum or allowing for the creation of a regime hostile to the United States, which would endanger the flow of oil.
The second threat seems particularly improbable. The Saudi regime is under pressure and divided, but it's still strong, diplomats say. The real threat is terrorism â and thanks to the extreme secrecy of the Saudi regime, the depth and strength of the insurgency remains hidden behind a flurry of government statements.
"<b>Ten or 15 years ago I was much more confident saying, 'Look, I've got all kinds of criticisms [of Saudi Arabia], but there's a lot of reasons why I think it's stable,' " said Robert J. Lieber, a foreign service professor at Georgetown University. "Now I'm agnostic. I do think the risk of terrorism is not insignificant." </b>
If anybody should be able to judge the strength of the militants, it's the Americans. U.S. troops are stationed in Saudi Arabia, and the two nations swap intelligence. These days, the message from the U.S. Embassy to expatriates has been blunt: Leave the country; trouble is coming.
Saudi authorities are miffed by the dire tone of the warnings, which they say are exaggerated. The U.S. government tells its citizens to leave Saudi Arabia, but recruits other citizens to go to Iraq (news - web sites), griped one Saudi official. "As if that were safer."
In public, Saudi officials dismiss talk of departing foreign workers. Through the decades, Saudis have risen to dominate the upper echelon of Aramco management, replacing the Americans who founded the company and steered it through its early decades. Aramco's workforce is about 85% Saudi.
Even if the Westerners leave, Saudis will take up the slack, they say, or replenish the ranks with foreign workers who have a stronger stomach for risk. Already, the majority of the kingdom's foreign workers are Arabs from countries such as Egypt and Yemen, or South Asians from Pakistan, India and Sri Lanka.
"Somebody will pick it up, as long as there's money to be made," said Muhanna, the advisor to the petroleum minister. "I'm not minimizing the effect, but let's not exaggerate it. We're capable of carrying on even if some people leave."
Frantic to Leave
Rattled families put together sales in the Aramco housing compounds this week to sell off their belongings. A private school in Bahrain, the archipelago across the causeway from Dhahran, reported a flurry of telephone calls from parents frantic to move their children out of Saudi Arabia.
"Some are retiring, some are going into early retirement, some are leaving because of family commitments," said Aramco President Jumah, who was reluctant to link the resignations to the attacks. "I have not seen a mass exodus."
Saudis and expatriates alike are trying to defend themselves. Improbably, a sorrowful Saudi construction magnate logged on to a website run by Israeli settlers this week. Maan Sanea, who owns the Oasis residential complex, where much of last weekend's violence took place, wanted to find a way to protect it. Sanea followed the settlers' example, sealing off all entrances except one and erecting new brick barriers at his battered housing compound.
He had assumed that the enclave of tidy trees and red-tiled roofs was safe behind its thick walls, guard posts and stainless steel doors, but he was wrong. Militants breezed through the front gate May 29 and went on a rampage. They slit throats, took hostages and shot people execution-style.
Then, after a full day and night of mayhem, the gunmen apparently clambered up the rocks of an artificial waterfall in a back courtyard, went over the fence and disappeared in a stolen car. They have not been found.
During a tour of the compound this week, security consultants acknowledged that the story didn't make much sense. It seemed likely that the gunmen had help, they said.
"They were calm, collected and they knew what they were doing," said a security consultant, who was in the compound during the attacks and asked not to be named. "They came in like special forces and they went out like special forces."
Many witnesses doubted that the militants who stormed into the Oasis were the same men who opened fire at two office compounds earlier that morning, then dragged a British petrochemical worker behind a car. Saudi officials have said the same four gunmen carried out all of the assaults.
But witnesses at the compound noted that the four gunmen were unruffled and the military fatigues were clean when they went through the gates.
The attack May 1 in the Red Sea petroleum hub of Yanbu is also troubling. Like the carnage in Khobar, it was an illustration of a security force caught off guard and overwhelmed by a few low-tech killers. Six Westerners and one Saudi were killed.
Islamist gunmen in that attack moved with very little urgency. They had time to gun down workers of Houston-based ABB Lummus Global Inc., and to tie a man to a car and drag him through the streets. They displayed his mauled body to schoolchildren, urging them to wage jihad in the name of the Iraqi city of Fallouja.
It took more than an hour for Saudi commandos to stop them.
"<b>I think everyone understands the limitations of security within the kingdom," said a 49-year-old Aramco worker who has lived in the kingdom since she was 22 and declined to be named.
"I think all of us are pretty tenuous" about staying in Saudi Arabia, she said. "As Americans, it's just not in our nature to get slaughtered. At this point, it's everybody's individual fear factor."</b>
Sat Jun 5, 7:55 AM ET Add Top Stories - Los Angeles Times to My Yahoo!
By Megan K. Stack Times Staff Writer
DHAHRAN, Saudi Arabia â In the desert washes where Americans first found this kingdom's black gold, Saudis scrambled this week to harden their defenses. New security checkpoints cropped up at the edge of the vast tangles of steel in the oil fields. Makeshift sniper nests appeared around town. A Saudi magnate logged on to an Israeli settler website for a few tips on home fortification.
Last weekend's carnage by suspected Islamic militants in the nearby petrochemical hub of Khobar drove the price of oil to a new high and laid bare an uncomfortable truth: The world oil market depends heavily on a calm that seems to be vanishing in this volatile desert kingdom.
Many people here believe that after years of threats, a struggle aimed at wrecking Saudi Arabia's storied oil industry has begun. The nature of the violence has morphed; suicide bombings at housing compounds in Riyadh gave way to two major shooting rampages at oil companies last month. Workers are no longer rattled or nervous â they are scared.
Saudi stability once seemed a relatively safe bet; now analysts are questioning the security of the kingdom's oil facilities and the tight grip of its ruling family.
After gunmen killed 22 people last weekend, then vanished into a neighborhood swarming with Saudi commandos, official explanations were tinged with inconsistencies and marked by inexplicable security lapses.
"Every society secretes its evil. We have our share, and you have your share," Abdallah S. Jumah, president of government-owned oil company Saudi Aramco, said in an interview here. "This is our share."
"The other day shouldn't have been allowed to happen, because they knew it was coming," said Tracy Thompson, a 43-year-old substitute teacher married to an Aramco employee. "And even if they catch these [gunmen], so what? There's another 200. It's very frustrating because we know there could be sympathizers living next door."
Tight Security
Saudi officials scornfully dismiss the suggestion that terrorism could block the flow of oil. It's one thing to blow up a housing compound or open fire at a lightly guarded firm, they say, but quite another to obliterate a facility that pumps, transports or loads oil. The latter, they insist, is virtually impossible.
Wrapped in layers of fencing, barbed wire and hydraulic barriers, watched with cameras and night-vision goggles, Aramco's oil facilities are monitored by more than 5,000 guards. Backed by Saudi troops, armed guards patrol on foot, in cars and in the sky.
"You'd need a nuclear power," said Ibrahim Muhanna, advisor to the petroleum and mineral resources minister. "To damage the biggest oil facilities you'd need to come from the sea, like only the U.S. is capable of."
But even if the kingdom's heavily fortified network of pumping stations and ports prove immune to assault, there is a soft spot: The workers. About 6 million foreign engineers, software experts, schoolteachers and cooks live in Saudi Arabia, and they keep the oil business humming.
Now foreigners are barricaded in gated communities, terrified to venture outside. Some are abandoning Saudi Arabia altogether. Workers at Aramco estimate that dozens of employees have resigned since last weekend.
Nervous workers are urging their spouses and children to leave the country for the summer, or longer. Many are quietly looking for new jobs, hoping to line up a financial escape route.
Saudi Arabia has larger proven oil reserves than any other nation and has long served as a sort of relief valve for the global market: In a pinch, Saudis can easily pump extra crude, which tends to drive down prices and calm markets.
Already the top oil exporter, the kingdom could pump still more. It is producing 9.1 million barrels a day but has the capacity for 10.5 million barrels, Muhanna said.
<b>The kingdom has responded to many a global crisis by increasing production â during World War II, the Korean War, the Iranian oil cutoff, the Iranian revolution and the 1991 Persian Gulf War (news - web sites). On Thursday, OPEC (news - web sites) agreed to raise production yet again after prodding by an insistent Saudi Arabia. </b>
But terrorism has its price, and in the case of oil, it's not a small one. Analysts say fear alone fattens the price of a barrel of oil by $4 to $10. Even before last weekend's attacks, the suspicion that Saudi Arabia might not be able to protect its oil from sabotage was driving prices to new heights. This week, the price peaked at a record $42 a barrel.
Saudi Arabia takes seriously its position as the world's biggest exporter of crude â and even more seriously the petrodollars that helped reinvent this hardscrabble desert country into a gleaming and sophisticated kingdom in just a few decades.
"People come here from Harvard with their funny views, but they don't live here and they don't understand how things work," said Hassan Husseini, a former Aramco planning consultant. "This oil is not just oil. It's our water, it's our farming and it's our hospitals."
Two Scenarios
But it's precisely the oil industry â and the royal family it supports â that Saudi Arabia's radical Islamists yearn to destroy. The insurgents deride the government, which they deem apostate, for cooperating with the United States while growing fat on oil profit.
There are only two recipes for immediate disaster in Saudi oil, and few analysts think either one is likely.
⢠A cataclysmic strike on a key oil facility, particularly the massive refinery in Ras Tanura, could clog production for months.
⢠The spasms of suicide bombings and shootouts could grow strong and fast enough to break the hold of the ruling family, leaving a vacuum or allowing for the creation of a regime hostile to the United States, which would endanger the flow of oil.
The second threat seems particularly improbable. The Saudi regime is under pressure and divided, but it's still strong, diplomats say. The real threat is terrorism â and thanks to the extreme secrecy of the Saudi regime, the depth and strength of the insurgency remains hidden behind a flurry of government statements.
"<b>Ten or 15 years ago I was much more confident saying, 'Look, I've got all kinds of criticisms [of Saudi Arabia], but there's a lot of reasons why I think it's stable,' " said Robert J. Lieber, a foreign service professor at Georgetown University. "Now I'm agnostic. I do think the risk of terrorism is not insignificant." </b>
If anybody should be able to judge the strength of the militants, it's the Americans. U.S. troops are stationed in Saudi Arabia, and the two nations swap intelligence. These days, the message from the U.S. Embassy to expatriates has been blunt: Leave the country; trouble is coming.
Saudi authorities are miffed by the dire tone of the warnings, which they say are exaggerated. The U.S. government tells its citizens to leave Saudi Arabia, but recruits other citizens to go to Iraq (news - web sites), griped one Saudi official. "As if that were safer."
In public, Saudi officials dismiss talk of departing foreign workers. Through the decades, Saudis have risen to dominate the upper echelon of Aramco management, replacing the Americans who founded the company and steered it through its early decades. Aramco's workforce is about 85% Saudi.
Even if the Westerners leave, Saudis will take up the slack, they say, or replenish the ranks with foreign workers who have a stronger stomach for risk. Already, the majority of the kingdom's foreign workers are Arabs from countries such as Egypt and Yemen, or South Asians from Pakistan, India and Sri Lanka.
"Somebody will pick it up, as long as there's money to be made," said Muhanna, the advisor to the petroleum minister. "I'm not minimizing the effect, but let's not exaggerate it. We're capable of carrying on even if some people leave."
Frantic to Leave
Rattled families put together sales in the Aramco housing compounds this week to sell off their belongings. A private school in Bahrain, the archipelago across the causeway from Dhahran, reported a flurry of telephone calls from parents frantic to move their children out of Saudi Arabia.
"Some are retiring, some are going into early retirement, some are leaving because of family commitments," said Aramco President Jumah, who was reluctant to link the resignations to the attacks. "I have not seen a mass exodus."
Saudis and expatriates alike are trying to defend themselves. Improbably, a sorrowful Saudi construction magnate logged on to a website run by Israeli settlers this week. Maan Sanea, who owns the Oasis residential complex, where much of last weekend's violence took place, wanted to find a way to protect it. Sanea followed the settlers' example, sealing off all entrances except one and erecting new brick barriers at his battered housing compound.
He had assumed that the enclave of tidy trees and red-tiled roofs was safe behind its thick walls, guard posts and stainless steel doors, but he was wrong. Militants breezed through the front gate May 29 and went on a rampage. They slit throats, took hostages and shot people execution-style.
Then, after a full day and night of mayhem, the gunmen apparently clambered up the rocks of an artificial waterfall in a back courtyard, went over the fence and disappeared in a stolen car. They have not been found.
During a tour of the compound this week, security consultants acknowledged that the story didn't make much sense. It seemed likely that the gunmen had help, they said.
"They were calm, collected and they knew what they were doing," said a security consultant, who was in the compound during the attacks and asked not to be named. "They came in like special forces and they went out like special forces."
Many witnesses doubted that the militants who stormed into the Oasis were the same men who opened fire at two office compounds earlier that morning, then dragged a British petrochemical worker behind a car. Saudi officials have said the same four gunmen carried out all of the assaults.
But witnesses at the compound noted that the four gunmen were unruffled and the military fatigues were clean when they went through the gates.
The attack May 1 in the Red Sea petroleum hub of Yanbu is also troubling. Like the carnage in Khobar, it was an illustration of a security force caught off guard and overwhelmed by a few low-tech killers. Six Westerners and one Saudi were killed.
Islamist gunmen in that attack moved with very little urgency. They had time to gun down workers of Houston-based ABB Lummus Global Inc., and to tie a man to a car and drag him through the streets. They displayed his mauled body to schoolchildren, urging them to wage jihad in the name of the Iraqi city of Fallouja.
It took more than an hour for Saudi commandos to stop them.
"<b>I think everyone understands the limitations of security within the kingdom," said a 49-year-old Aramco worker who has lived in the kingdom since she was 22 and declined to be named.
"I think all of us are pretty tenuous" about staying in Saudi Arabia, she said. "As Americans, it's just not in our nature to get slaughtered. At this point, it's everybody's individual fear factor."</b>