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Iraq: Oil companies tighten security following attack

Following the Nov. 1 attack on the Ahdab oil field in southern Iraq, foreign oil companies operating in the country have tightened security measures while the government tries to ease concerns.
An aerial view of excess gas burning off at the al-Ahdab oil field in Wasit province September 23, 2011. Chinese company, the China National Petroleum Corporation has begun operations at the Al-Ahdab oil field in Iraq, according to news reports. Picture taken September 23, 2011. REUTERS/Mohammed Ameen (IRAQ - Tags :POLITICS BUSINESS - Tags: POLITICS ENERGY BUSINESS) - RTR2RRJ2

BAGHDAD — Foreign oil companies operating in Iraq have tightened security procedures at the sites they manage as a precaution following a Nov. 1 attack on the Ahdab oil field, 180 kilometers [50 miles] southeast of Baghdad in Wasit province. Unidentified gunman stormed the site, west of Kut, and made off with money, weapons and equipment.The Oil Ministry has reassured the companies that the incident involved theft and nothing more.

The Ahdab field was developed and operated by the China National Petroleum Corporation (CNPC) under a technical services contract with the Iraqi government. Operations began there in 2011.

Simon Daman Willems, managing director of Shell Iraq Petroleum, told Al-Monitor, "Iraq is still experiencing security tensions. We believe that the Iraqi government is serious about fighting armed groups that are trying to affect the Iraqi economy through its oil exports." He also acknowledged, "Oil companies are certainly reassessing their calculations with respect to the targeting of work sites in Iraq, which is still witnessing security breaches in all sectors."

Willems said his company is continuing to develop and administer the Majnoon field, one of four huge fields in Basra province, to reach the highest production possible. Iraq is counting on the big fields in the south to double its oil production, which currently stands at around 3 million barrels per day

The Majnoon field is one of the five largest in the world. According to Willems, the Iraqi Oil Ministry believes it contains some 38 billion barrels of oil. The ministry contracted the field to Shell in 2010 under the second licensing round. 

Sahib Awid al-Jalibawi, head of the Security Committee for the Wasit province local council, confirmed that the Ahdab attack was not an act of sabotage. He blamed the success of the operation on deficiencies on the part of the field's guards, noting that the intruders had stolen communications equipment and laptop computers, along with cash, thus removing any doubt that the attack constituted a general threat to the field.  

Speaking to Al-Monitor, Jalibawi asserted, "The attack on the Ahdab oil field by an armed group is nothing more than a case of armed robbery carried out by some weak individuals." He added that the local government had formed a committee to investigate the incident and had met with Chinese and Iraqi workers during a visit to the field. They said that they had not experienced similar incidents in the past, making the robbery a unique event to date.

Meanwhile, the Oil Ministry continued to downplay the importance of the attack. Ministry spokesman Assem Jihad told Al-Monitor, "The incident will not affect the work of foreign oil companies operating in Iraq." He stressed, "Foreign companies will not back down when it comes to developing the oil fields that they won [contracts for] in licensing rounds. Likewise, [they] will continue competing for investment [opportunities] in other oil fields, if presented by the Iraqi government in the future. These companies were aware of the security situation in Iraq before beginning work here.”

The parliamentary Oil and Energy Committee meanwhile has considered that a repeat attack might negatively affect the work of these companies and the development of the country's oil fields. One of the committee's members, Uday al-Awadi, told Al-Monitor, "The provincial administrations and the Iraqi government must deal with such incidents seriously, by cooperating with foreign oil companies and providing security for their work via coordination with the security services in the province." He further noted, "Iraq still suffers from attacks by al-Qaeda, [and] some [other] armed groups, on oil sites and pipelines."

Iraqi militants have repeatedly targeted the main northern pipeline. It was constructed in the 1970s to transport 1.6 million barrels per day to Ceyhan, the Turkish port on the Mediterranean. These attacks have hindered plans to increase exports.

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