Tanker hijackings in South East Asia

The advanced business model of Indonesian pirates When commenting on the sophisticated, and highly successful, business model of the Indonesian pirates Mr. Hans Tino Hansen, CEO of Risk Intelligence, highlights that the Indonesian pirates are far more effective than its African counterparts if measured in yields per day.  The business model of hijacking tankers and siphoning their oil, have been refined to the point where the pirates can earn a $2 million profit for only a few days’ work. Mr. Hansen further points out that the lack of international media attention is not coincident, but rather resulting from deliberate calculations made by the Indonesian pirates. By mainly attacking regional ships, rather than the international merchant fleet, the pirates have remained below the radar of international attention - hence able to keep with the momentum of their lucrative business model in Southeast Asia. Higher gas prices caused increased threat of tanker hijackings in Southeast Asia A record number of hijackings have been reported in Southeast Asia during 2014 – a sharp increase from previous year where only three hijackings were reported. This increase is likely to be further escalated by the announced price increase of petrol and diesel in Indonesia which, all things being equal, is likely to cause a spike in the number hijackings according to Mr. Hans Tino Hansen, CEO at Risk Intelligence. The Indonesian orchestrated tanker hijackings typically follow a refined business model in which the fuel is stolen from the hijacked tanker through a quick STS operation and then sold for about 60-80 percent of market price. A 30 percent increase in the petrol price will thus present an even stronger incentive for the pirates. That the targeted ships so far have been smaller, locally owned, product tankers at low speed is not a result of lacking abilities, but rather due to a lack of inside information as well as an aversion to attack international vessels that can cause greater media attention. This picture may drastically change if the syndicates were to gain information on other targets in the fairway while also choosing to ignore the accompanying international interest – a development which have been seen in Nigeria after the first tanker hijacking in 2010.