North Sea Oil Drone Threat Prophesied in the Middle East

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Until now, the waters of the North Sea have been considered one of the world’s safest offshore basins for crude oil production. Equinor, Total Energies and ConocoPhillips have all raised the level of security around their facilities in the region after drones were seen near the rigs, reports Platts.

The recent history of drone attacks on oil installations in the Middle East offers a disturbing precedent for the effectiveness of these military devices in targeting energy infrastructure, and international oil majors in Norway and the UK would be foolish to ignore the threat.

Drones in the North sea

According to a study published in the Energy Security Sentinel by S&P Global Commodity Insights, 75% of the 23 recorded drone attacks over the past five years against Middle Eastern oil and gas facilities in the Gulf using aerial drones hit their target. The data, which analyzes 88 major incidents in total over the period, suggests that drones were more difficult for air defense systems to intercept than conventional missiles.

Compared to drone attacks, the missiles were less effective, according to the data. Of the 18 confirmed missile attacks targeting energy infrastructure in Saudi Arabia since 2017, 92% were successfully intercepted by the kingdom’s security forces, according to Energy Security Sentinel.

On the other hand, drones are more difficult to defend. Most notably, they were primarily used in 2019 to attack the giant Abqaiq and Khurais oil installations in the kingdom, briefly cutting off 5.7m bpd of supply. The attacks successfully pierced sophisticated US-made Patriot surface-to-air missile defense systems at the world’s most strategically important oil installations.

A similar drone attack in the North Sea could be just as disconcerting for the oil market. Not least because the region still produces around 3 million b/d of oil between the UK, Norway and Denmark. The North Sea also provides vital flows of light sweet crude preferred by European refiners and used by traders to help price two-thirds of the $1.4 trillion global oil futures market.

Global buffers of spare capacity are also slim, with only around 2m bpd of supply readily available to offset any supply shocks, while the US has just completed a historic release of its strategic reserve of oil to help drive prices below $100/bbl.

New era

The fear of drone attacks on oil and gas installations in the North Sea comes after an unprecedented increase in concerns about the safety of key European energy infrastructure following Russia’s invasion of Ukraine.

These concerns were heightened in the last week of September by major leaks on Nord Stream gas pipelines, which were blamed on state-sponsored actors.

European and American officials went further, pointing the finger directly at Russia for the underwater explosions, which caused large amounts of methane to leak into the Baltic.

The Nord Stream incidents, which Moscow blames on the United States and its allies, were quickly followed by Norway, which tightened security around its oil and gas fields in the North Sea after warning that drones not identified had been seen near installations far from the sea.

Oslo’s warning was quickly followed by a similar tone from the UK, which advised operators in its North Sea territorial waters to “ensure that operational resilience and response plans are up-to-date and ready to be deployed if necessary” following the Nord Stream incident.

The 2019 attack on Abqaiq ushered in a new era of energy security, demonstrating the ability of new technologies to overcome traditional military defenses and disrupt large volumes of oil supplies,” said Paul Sheldon, adviser Chief Geopolitics Officer at S&P Global Commodity Insights.

Similarly, new threats to energy infrastructure could arise from the war in Ukraine, a dynamic that could already materialize in the apparent sabotage of the Nord Stream pipeline and still opaque risks to North Sea facilities. Combined with increasingly frequent export sanctions against majors and gas producers, these realities could expose energy infrastructure in relatively safe locations to unprecedented risk of disruption.”

Before relations between the Western powers and Russia deteriorated, any idea of ​​drones attacking North Sea oil rigs would have been dismissed as absurd. However, the targeting of Nord Stream could signal a new paradigm in European energy security when the previously unimaginable becomes possible.

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Source: Platts

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