Iraq Oil Union Protest Averted In Basra

An Iraqi oil union in Basra threatened protests at three of the largest oil fields in the nation in mid-May 2011. They planned to stop work at the fields so that the government would hear their demands about higher pay. The strike was called off at the last minute due to the intervention of Basra’s governor, but their complaints are unlikely to be met.

Oil workers at the Rumaila, Zubair, and Majnoon fields in Basra threatened a one-day strike on May 17, 2011. They said they would stop work, block the entrances to the fields, and prevent foreign workers from entering. The day before the planned action Basra’s Governor Khalaf Abdul Samad stepped in. He offered to meet with the workers, and hear their complaints. Their main grievance was that foreign workers were getting paid more than them.Iraq’s oil workers are some of the lowest paid in the world according to a report by Hays Oil & Gas. Internationally, petroleum workers average $76,000 per year in earnings. Foreign workers in Iraq make on average $94,800 per year. Iraqi workers in comparison only get $22,000 a year. It’s that huge gap in pay that was one of the main motivators behind the call for action.

The three fields account for more than half of all of Iraq’s oil production. Rumaila is the largest field in the country, and one of the largest in the world with 18 billion barrels in proven reserves. British Petroleum and China National Petroleum Corporation are currently developing the field along with the government-owned State Oil Marketing Organization. It produces 1.1 million barrels a day, which is just under half of Iraq’s total output. Majnoon is the third largest field in Iraq with 12.6 billion barrels of reserves, and is operated by Royal Dutch Shell, Malaysia’s Petronas, and the state-run Maysan Oil Company. Finally Zubair is the sixth largest with 4 million barrels of reserves, and is run by Italy’s Eni, America’s Occidental Oil, South Korea’s Korean Gas, and Maysan Oil.

While the one-day work stoppage was averted, the union is unlikely to gain anything from their discussion with the governor. He has no power over their pay or the operation of the petroleum fields, which are under the jurisdiction of the Oil Ministry and central government. An energy analyst from IHS Global Insight was quoted as saying that he doubted that the Ministry would even have the funds necessary for any wage increases because they have to start paying the foreign companies as well as start gigantic development projects in the country’s oil and gas infrastructure. That could mean strikes and demonstrations in the future. The oil unions always objected to the foreign deals, and the government has responded to them with arrests and repression in the past, which could lead to some angry days ahead in Basra.

SOURCES

Abu, Ali, “Rumaila blockade averted,” Iraq Oil Report, 5/18/11

Carlisle, Tamsin, “Iraqi foreign oil payments threatened,” The National, 5/20/11

Gentile, Carmen, “Union leaders taken to court for oil sector dissent,” Iraq Oil Report, 7/2/10

Lando, Ben, “Basra oil workers’ boycott imminent,” Iraq Oil Report, 5/17/11

Mohammed, Aref and Abbas, Mohammed, “Job fears, hopes temper Iraq welcome for oil majors,” Reuters, 12/7/09

Smith, Patrick, “Analysis: Iraq’s oil projections wildly optimistic,” AK News, 5/15/11