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This is an archive article published on March 18, 2004

New anti-terrorism law may deliver a whammy to OPEC’s exports

OPEC oil producers have done little to prepare for a new maritime anti-terror law coming into force on July 1 and face serious disruption to...

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OPEC oil producers have done little to prepare for a new maritime anti-terror law coming into force on July 1 and face serious disruption to exports if they miss the deadline, maritime security sources said on Wednesday.

Tough new UN security requirements for merchant ships and ports that engage in international trade, known as the International Ship and Port Facility Security code (ISPS) will take effect in barely 100 days time.

The rules are mandatory for all shipping firms, ports and oil terminals, but many OPEC producers, including Saudi Arabia, Nigeria, Kuwait and Indonesia, are nowhere near ready, the sources said.

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The US Coast Guard has told the industry that merchantships, including oil tankers and gas carriers, that are not security-certified could be turned away.

‘‘As far as we know none of the governments that we are advising are compliant with the security code though some have had their ship security officers trained and plans accepted,’’ one source, who advises governments in the Middle East and Africa on the comprehensive set of measures told Reuters. The US pushed the new rules through the International Maritime Organisation in the wake of the September 11 attacks, fearful that Al Qaeda could deliver a ‘‘dirty bomb’’ or other weapon of mass destruction through one of its ports.

The ISPS code requires the training of on-board ship and company security officers, emergency procedures aimed at dealing with a terror attack, and a raft of other measures in ports and at coastal terminals that tightens security.

Last week’s Madrid train bombings that killed 201 people will only add extra impetus to enforcing the new maritime measures, which were approved by the United Nations in December 2002, experts said.

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US crude prices are already sizzling at post-Iraq war highs over $37 a barrel, and OPEC is set to implement a fresh round of supply cuts in April that could propel prices even higher this summer if supply is stifled to the United States, the world’s largest oil consumer.

Saudi Arabia, the world’s largest crude oil exporter, has trained security officers for its state-owned oil tanker fleet but has not addressed aspects of Port security compliance, the security source said.

Kuwait had discussed port plans with security advisers but done little else, while the United Arab Emirates was in the process of drawing up port security plans, he said.

Nigeria, whose high-quality crude supplies are vital for US refineries to make gasoline for peak summer holiday demand, is especially far behind, the source said.

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‘‘The Nigerians are very worried. They’ve started on the road and are well aware of the deadline but there is still an awful long way to go,’’ he said, adding that nothing had been done at Nigeria’s ports and oil terminals. ‘‘Indonesia has done nothing,’’ said another security source, responsible for advising Southeast Asian nations on the requirements.

Little was known about readiness of other OPEC nations like Iran, Algeria, Iraq and Venezuela and major non-OPEC producers like Mexico though industry experts and observers said they were unlikely to be on schedule. (Reuters)

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