Increasing piracy attacks in Nigeria, others expected to push insurance costs

Insurance costs are expected to be escalated following the spike in pirate attacks in West Africa’s Gulf of Guinea, especially off Nigerian coast.

Pirate attacks in the Gulf of Guinea, which cost the global economy between $740 million and $950 million in 2012, are expected to go up in 2013, a study released Tuesday by the International Maritime Bureau (IMB) and other partners has shown.

The Gulf of Guinea, which includes Nigeria, Ghana and Ivory Coast, is a major source of oil and cocoa and increasingly metals for world markets, but has become notorious for piratical attacks.

No fewer than 13 incidents of piracy attacks have been recorded off Nigerian coast this year, a growing trend pushing up maritime insurance costs in the region.

Nigeria accounted for 27 incidents in 2012, with four vessels hijacked, 13 vessels boarded, eight fired upon and two attempted attacks, the IMB global piracy report said.

In what is the latest attack off the coast of the country, pirates in speedboats attacked an oil supply vessel and kidnapped four Indian and Polish crew members in increasingly dangerous waters off Nigeria’s coast last week, two security sources said on Wednesday, according to Reuters.

The gunmen launched their assault on the Singapore-flagged tugboat MDPL Continental One around 30 nautical miles from land on June 13, the security sources said.

The vessel was ransacked and four crew were taken hostage off the coast of the oil-producing Niger Delta, one of the sources told Reuters.

The research showed that the total cost of insurance for the region stood at between $423 million and $437 million in 2012.

Pirate attacks off West Africa’s mineral-rich Gulf of Guinea have almost doubled from last year and threaten to jeopardise the shipping of commodities from the region. They have already jacked up insurance costs, says Reuters.

Kaija Hurlburt of advocacy group Oceans Beyond Piracy (OBP), which co-authored the report, was quoted by Reuters as saying that the type of vessels attacked had become more diverse. “The impact on the commercial trade sector is a problem,” she said.

A separate study by OBP earlier this year estimated the cost of Somali piracy fell 12.5 percent in 2012 to $5.7 billion-$6.1 billion, helped by vigorous navy action, the deployment of private armed security guards and defensive measures on ships.

Data from IMB, another of the latest study’s authors, showed attacks in the Gulf of Guinea for the year to date reached 67 incidents, versus 34 in the same period last year. These included five attacks off Togo, versus five in the same period last year.