Iraq Trade Union Threatens BP Deal

After its offer was accepted last month to develop Iraq’s vast Rumaila oil field, BP may have thought it had won the biggest prize in the country’s oil race. But it may not be over yet and BP now faces industrial action.

The trade union representing workers of Iraq’s state-owned Southern Oil Company (SOC) yesterday threatened to prevent exploitation of the field, as it says it contravenes Iraqi law.

Last month the government in Baghdad accepted an offer from BP and its Chinese partners CNPC to exploit the giant Rumaila oil field in southern Iraq that has known reserves of 17.7 billion barrels.

However BP now faces union opposition. “If those companies try to exploit the field, our first reaction will be to stage a sit-in and to strike,” union president Ali Abbas has been quoted as saying. “We are capable of mobilising people to confront these companies and prevent their work because it is against the law.”

The union fears that BP – CMPC consortium take-over will lead to a wave of redundancies and an influx of foreign workers. The spat looks like escalating as the Oil Ministry is saying it will punish any employees who block the exploitation of the Rumaila field, saying that most of the jobs will be Iraqis.

“The contracts that the ministry (of oil) wants are service contracts which allow only 10 to 15 percent of employees (on the fields) to be foreigners,” said a Ministry spokesman. The remainder will be Iraqis.”

Yes, but who will actually be controlling the oil development, BP or Iraq?