The current global geopolitical landscape and its implications for regional security.
Since the end of the Second World War, EU nations have arguably taken their security for granted. The onset of the conflict in Ukraine significantly disrupted global economies and heightened security concerns, leading them to rely heavily on economic sanctions and the traditional protection of the United States. However, recent political shifts in the USA, including new conflicts in Iran and questions regarding the future of NATO, have introduced further instability.
Consequently, we are seeing an unprecedented increase in defense spending across Europe and the United States. In light of this, it is contradictory that these same nations are requesting that Rwanda dismantle its defensive measures. Furthermore, there is pressure to remove insufficient compensation for security operations in Mozambique (20M usd/year) at a time when the global energy crisis makes such security more critical than ever.
It is essential that Rwanda security contributions worldwide are recognized and valued appropriately given the current international climate.
We know that security is a major cost driver for oil operations in conflict zones like Iraq and Libya. In some cases, it is one of the top non-technical costs of production.
Let’s break it down clearly: who provided security in Iraq (2003–2011)?
A mix of private military contractors (PMCs), local militias / security forces and coalition military protection: Blackwater, DynCorp, Aegis Defence Services etc…
How much were they paid?
The cost per contractor was approximately $500 to $1,500 per day per armed contractor and 2.000 usd/day per highly specialized or ex-special forces. Aegis Defence Services was awarded a contract worth USD 293 million (2004–2007) just for coordination of security in Iraq. Oil majors like BP, ExxonMobil and Shell spent tens to hundreds of millions annually on security per project.
The security costs impact per barrel vary widely depending on location: relatively stable oil regions: $1–$3 per barrel and up to 5 – 15 usd in high-risk zones and sometimes even higher temporarily.
What drives these high costs is the pipeline sabotage (Iraq), kidnapping of staff (Nigeria), attacks on camps, insider threats (ISIS) in Mozambique and of course weak local institutions.
In normal environments: Security costs are minor operating expenses: 1–3%.
In conflict zones, security can reach 10–25% of operating costs. In extreme cases such as Cabo Delgado, security costs can determine whether a project is profitable, delayed (force majeure) or completely abandoned.
Oil companies factor security into their investment decisions, then require a risk-adjusted return, meaning higher expected profits to justify security exposure.
Now that contracts are being renegotiated, their amendments must include higher margins to cover RDF backed protection. The security in Cabo Delgado zones and elsewhere is not just a cost, it’s a core economic variable. It should add $5–15 per barrel because it will consume hundreds of millions per year. RDF withdrawal may directly impact the entire project’s viability.
Security is no longer merely an operational cost; it has become a core economic variable, which currently benefits western Insurance companies by increasing their premium for risks.
We believe that RDF should be fairly paid and request a significant say when Mozambique LNG exports begin in 2029. Specifically, by imposing sanctions against countries that dissociate from her during this critical period. No one should die for others to keep enjoying life.
Who will pay RDF?
Mozambique? Definitely not. Their gas revenue per year will barely reach 350M USD till 2029 when it expects to reach 1B USD. The oil and gas majors? Definitely yes because there is a precedent. In Iraq and Libya.
RADIOTV10
