A New Age of Security for the Oil and Gas Industry – Addressing Production Risks through Community Engagement

Larry BradshawFAF Developments News Release

Recently our colleagues at GbHawk in conjunction with FAF’s director of operations for Africa,
Central Asia and the Middle East contributed an article for OilandGasIvestor.com. Know Your Neighbors, published in the January 2014 issue, discusses the benefits of moving away from traditional security to a holistic approach infusing Corporate Social Responsibility (CSR) and Public Relations (PR) with Security.

The Oil and Gas industry has faced many factors and factions opposing the global extraction of natural resources over the years. Whether through litigation, protests or violence if social capital for a project has not been established in the community, companies increase production risk.

“the profitability of any given project rests upon much more than just the investment required to erect and operate a facility; it also involves the opportunity cost of lost production and future damage awards when the community revokes a company’s social license to operate. In other words, investing in communities over the life cycle of a project is not only the right thing to do; it can increase profitability over time.”

Shifting the view of security from reactive to preventative is vital to establish positive relationships within a community, and begins with working in collaboration with CSR and PR divisions.

“…it’s possible to determine the degree to which industry is a welcomed, valued member of society, plot the results on a map, and record the attitudes over time. Since attitudes change based on interactions, industry can become more welcome and less subject to violence with the right mix of public relations, development, and security activities. Knowing where a project is starting out, or in which position it is currently operating, will help determine the right mix.”

Early warning systems are the most important benefit to come out of a strong community partnership.

“The modern threat environment requires incorporating the population into a comprehensive community-based, production-risk strategy to avoid the pitfalls of a traditional security approach. With genuine engagement and proper analysis of the population, the public can be a terrific source of information about everything happening in the area, including criminal and violent activity. Moreover, industry can build allies within and among the populations that could become active opposition against violence or terrorism.”

FAF has successfully utilized this approach in our global projects, especially during our time in Afghanistan. Here’s why it works.

“Industry has the ability and technology to respond effectively. By proactively cultivating and maintaining low-risk, politically stable operating environments through community-based production risk, it is possible to significantly reduce risk and increase profitability. In other words, investing in communities at the point of production over the life cycle of the project could, in many cases, be more profitable over time, due to persistent operation, than a simple transactional investment with the community at the time of project establishment.

Quotes above are from Know Your Neighbors | January 2014 ▪ OilandGasInvestor.com
Click here to read the article in its entirety. Please note: Oil and Gas Investor is a paid subscription periodical.