Confrontation Between Wasit Provincial Council and Oil Ministry At Al-Ahdab Field

On September 27, 2010 members of the Wasit Provincial Council and local police raided the Al-Ahdab oil field that is jointly operated by the Chinese National Petroleum Company (CNPC) and the Iraqi Oil Ministry. The council members charged executives at the field of embezzlement and misconduct, and demanded to see all of their financial records. Members of the Oil Security Force unsuccessfully attempted to stop the local officials at the gates. Afterward the Oil Ministry complained that the council’s actions were illegal as the field was under federal jurisdiction, and no local authority had the right to enter. 

CNPC was the first foreign oil company to do business in Iraq after the 2003 invasion. In August 2008 Baghdad re-worked a 1997 contract the company had signed during the Saddam era. The corporation has run into several problems since then. Farmers claimed their land was being destroyed by CNPC, and retaliated by damaging some of their equipment. Others protested at the provincial council because the Chinese hardly provided any jobs as they expected, and also demanded that CNPC pay $1 for every barrel of oil they produced. This shut down operations at the field for a short period of time in mid-2009, and caused the central government to deploy extra security there. Since then, other petroleum firms have begun work in Iraq, and there have been no reports of similar disputes. Hopefully none will because that could pose serious problems for Baghdad’s hopes of almost quadrupling production in the next few years.

SOURCES

AK News, “”Corruption” at Al-Ahdab, Execs Dismissed,” Iraq Business News, 9/27/10

DPA, “Iraq’s oil ministry denounces police raid on Chinese-run oil field,” 9/28/10