Protecting Energy Companies

The world can be a dangerous place to work these days. Major oil and gas companies have employees living and working in potentially volatile countries such as Nigeria and Saudi Arabia. The dangers range from political instability to religious fanaticism to environmental terrorism, plus kidnappings, extortion and business interruption threats.

In Colombia, for example, emails seized from computers in September 2014 revealed an extensive extortion plan by the Revolutionary Armed Forced of Colombia (FARC) to target the mining and petroleum industries. In the Niger delta region of Nigeria there are persistent security threats to oil companies in the region, with both local and expatriate workers being targeted for kidnaps both by militants and criminal gangs.

The Numbers Tell The Story

Control Risks, a leading international crisis management and response company:

  • Worked on 2,745 kidnappings and extortion cases in 132 different countries as of August 1, 2015.
  • Said for the period between January 2012 to November 2014, 30% of kidnap and extortion cases included the energy sector, including mining, oil and gas, and electrical power.
  • Handled 152 cases in 2014, up from 65 in 2005. 
Kidnaps by industry 2014


*Kidnap and extortion cases by industry sector. January 2012 - November 2014.  


Energy_Kidnappings by region

*Kidnappings by region 2019. 


While kidnappings garner media attention, extortion is also a serious—and growing threat. See figure 3 below:

Energy_Extortions by region


*Extortions by geographical region, first half of 2015.

Mitigating Your Risks

Nearly every type of employee is at some risk, as well as their dependents. See figure 4 below:

Energy_Victim types worldwide



*Kidnaps Worldwide 2014. Most Common Victim Types Known to Control Risks.


There are steps you and your employees can take to mitigate risk, from dressing inconspicuously to carrying a mobile phone or another communications device that is preprogrammed with police, embassy and other emergency numbers. It’s also important to always be alert to your surroundings, and to avoid disputes, demonstrations and political rallies. In many places, it’s not advisable to walk alone on most streets after dark. If you need a cab, try to hail one at a major hotel, or hire a reputable car and driver.

Insurance and Expertise

While prevention is key, it’s impossible to protect everyone all the time. A Kidnap, Ransom & Extortion (KR&E) insurance policy is a valuable tool that can help protect energy companies doing business internationally. A KR&E policy can help reimburse a company for the payment of a ransom following a kidnapping or extortion threat and can help pay for experts to navigate the company through an ordeal.

With a KR&E policy through Victor, you are eligible to receive assistance from Control Risks. This means you get access to experts with considerable experience handling kidnapping and extortion threats. In fact, the policy pays for all of the Control Risks response team’s expenses and fees. KR&E policies can also pay for a range of additional expenses, such as the cost of hiring interpreters, post-kidnapping medical costs (both physical and psychological) and rest and rehabilitation.

Energy companies can also opt to purchase endorsements for loss of business earnings (i.e., if an extortion threat forces you to close temporarily) or for losses associated with a cyber-extortion attack. Equally important, a good KR&E policy provides confidentiality. Everything associated with coverage and support in a crisis will be handled with complete discretion, thus minimizing media attention, from competitors and from other criminal organizations. 

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* Source of information: Control Risks
The statistics shown are based on Control Risks’ records of kidnap-for-ransom cases, defined as the abduction of a person or persons with the intent of their detention in an unknown location until a demand is met. These statistics are based on those cases about which Control Risks has obtained reasonably reliable information and do not purport to represent the full extent of the problem. This information is for illustrative purposes only and is not a contract. It is intended to provide a general overview of the policy described. Nothing contained herein should be construed as an acknowledgement by Victor that a given situation may be covered under a particular policy.

Underwriting Contact

Sarah Katz
(301) 961-9898
sarah.katz@victorinsurance.com 

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