More Promises Of Jobs From Iraq’s New Oil Deals

Iraq’s ministries and foreign petroleum companies are all promising large numbers of jobs as a result of the deals that have recently been signed to develop Iraq’s oil fields. Iraq’s Oil Minister Hussein al-Shahristani said his ministry has plans to build a new eastern pipeline to export oil to the Mediterranean. He also said that there is a need for new large storage tanks in southern Iraq, and that contracts have already been signed to build four new refineries in Tamim, Karbala, Maysan, and Dhi Qar provinces, and to upgrade three refineries in Baghdad, Salahaddin, and Basra. The Iraqi Drilling Company announced in 2009 that it would drill 180 new wells by 2010, and 250 new wells per year afterward. The Ministry of Labor and Social Affairs promised up to 1.3 million jobs as a result of all these new infrastructure projects. Companies are required to hire Iraqis for 85% of these jobs, and also to train them in technical skills. The Vice Chairman of Middle East Shell and the manager of Italy’s Eni Oil Company that both signed oil deals in 2009 also claimed that there would be a huge increase in jobs as a result. When the Eni official mentioned specifics however, he said that one oil field would only need around 10,000 new workers.

Many economists question whether the oil deals will address Iraq’s large number of unemployed. One expert from the Economic Reform Institute in Iraq said that petroleum couldn’t meet Iraq’s job needs because they are too great. Right now 250,000 Iraqis join the workforce each year, and the country’s population is increasingly getting younger with 38.8% 14 years old or below. Instead, he suggested that the government needed to reinvest its future oil revenues into diversifying Iraq’s economy. Another economist said that is unlikely to happen because the government would probably import the products it needs rather than build up its own industries with its extra money. Either way, what Baghdad does with the expected windfall in profits from these new oil deals will probably determine the future of the country just as much as the political and security situation.

SOURCES

Cordesman, Anthony, “Recent Trends in the Iraq War,” Center for Strategic and International Studies

Daood, Mayada, “12 million barrels of oil promise to solve unemployment problem,” Niqash, 2/12/10

Fordham, Alice, “Will oil wealth trickle down?” The National, 1/15/10

Gunter, Frank, “Liberate Iraq’s Economy,” New York Times, 11/16/09

Radio Free Europe/Radio Liberty, “Iraqi Officials Lament Failure To Refine More Oil,” 2/3/10

Special Inspector General for Iraq Reconstruction, “Quarterly Report and Semiannual Report to the United States Congress,” 1/30/10