Thursday, 1 November 2012

Iraq: Tribes muscle in

Some of the difficulties that confront companies operating in Iraq's energy sector came to light this month when the head of UAE drilling company Piling Tech revealed to the Al-Alam newspaper some of the challenges his company faces in going about its work. The head of the company, which is contracted by Russian firm Lukoil, explained how he was under sustained pressure from tribal elements in the south that regularly demand payments and other favours.

According to the Piling Tech head, his company had been forced to pay ID50 million to the heads of tribes in the area where the company operates before it had even started work. Such demands are reportedly commonplace. However, this was not the end of it. These tribes began coming back demanding more money while other tribes started allying themselves with the local tribes, enabling them to insist that the land the company is drilling belongs to them and they should also be paid. The Piling Tech head described these tribes as acting like “organised mercenaries”.

In addition, the tribes are forcing these international companies to take on their members and to provide them with jobs. As the head of the drilling company explained, “We were forced to take on unskilled workers from the tribes and to give them jobs that they don't understand.”

One of the main problems is that these tribes appear to be working in conjunction with, or at least with the blessing of, the security protection teams set up to provide security at the oil sites. According to the Piling Tech boss, “The police in charge of the protection gave the green light to the tribes to take money from the companies. When they [the tribes] come to us they feel strong and have no fear of the security protection teams.”

He also revealed that some of his engineers and other employees had felt so threatened by the behaviour of some tribes that they had quit their posts and left the country.

For more news and expert analysis about Iraq, please see Iraq Focus.

© 2012 Menas Associates

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