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Local development in Iraq

Demand for local labour in Iraq continues to outgrow supply

Miles Walker, chief executive officer of Crest Energy Services.
Miles Walker, chief executive officer of Crest Energy Services.

As more and more companies launch into the Iraqi market, demand for local labour is going to surge. Check out what businesses in Iraq have to say about working locally

Throughout the industry, managers and executives talk about the many opportunities that are available in Iraq.

The rapid return of the country’s oil and gas sector has been, and will continue to be, great for business. What we must not forget, however, is what this growth means for the country and the people who actually live there.

“Iraq is an exciting market, it’s an emerging market and it’s one that I see a great potential in, I am Iraqi by origin, and to go back to Iraq was a fulfilment of personal and professional ambitions,” says Dina Adib, general manager of Siraj Naybur, an Iraqi supplier of electrical products for the country’s oil and gas industry.

As an Iraqi national, opening an Iraqi company has been relatively easy for Adib, not to mention a great source of pride.

“A foreign company can open a branch, but there is certainly an advantage to being an Iraqi, you just need a board of directors, a memorandum of understanding, a declared capital and then you need to register with the ministry of trade,” she says.

The company, which is little over a year old, is entirely staffed by Iraqis, including its seven-man engineering team, a rare feat for most companies in Iraq where skills and training have been on hiatus after years of political unrest.

“Decades of war and isolation from the outside world mean that people need to be trained in the most basic of skills,” she says. But for Adib, the Iraqi people she employs have been keen to learn and improve themselves: “They have a thirst for knowledge so with effort and patience we believe we’ll get there.”

Not only has opening up shop in Iraq contributed to the country, but it’s also proving to be a lucrative decision.

“It is important because international oil companies like to work with a quota, most of them want at least 70% of their business to go with Iraqi companies,” she explains.

Certainly throughout the Middle East region’s thriving oil and gas industry, operators and service companies have done well to monitor their national content.

“If we can, we want to be almost 100% nationalized in every country we are working with. It won’t be 100% because we’ll always need one or two people bouncing in and out, some technicians, managers etc., but our goal is to be relying on the locals,” says Miles Walker, CEO of Crest Energy Services.

“It’s very important for each of the countries we work in. It’s a case of finding the right guys.”

Iraq’s tertiary education system took a severe hit in 2003 when, according to a UNESCO report, approximately 61 university and college buildings were damaged by war.

Re-development of the education system has been slow due to the lack of investment into local infrastructure.

Surprisingly, many service companies have found that the biggest problem they face when operating in Iraq, is not importing equipment or technology, but developing the local Iraqi people in order to do the job.

There is an overriding feeling amongst the major contractors that companies cannot double or triple production by getting people from outside and so the training and development must be done internally.

Companies such as Weatherford, who are making long term commitments to Iraq, have focused heavily on hiring locals.

“We have in excess of 2000 Iraqi employees, and we are going to train them and bring them up to the knowledge and level base that we would require,” says Nial Shepherd, vice president for Weatherford’s Iraq operations.

This is not always easy for the reasons stated above, but one additional challenge that can easily be overlooked, is language training. The linguistic barrier in Iraq can often add another dimension to the problems which operators face in Iraq.

Some companies have chosen to take on interpreters, especially when dealing with the technical skills positions where the English training is typically less adequate than for those individuals with specialized skills training.

The high demand for English speaking labourers has presented an interesting set of challenges for companies in Iraq.

“Everyone is looking for talented local staff. At some point, the bigger companies were interviewing people, if they could speak English and had a higher education, they would take them,“ says Peter Robinson, regional director Middle East, Bertling.

A few operators in the country have admitted that retaining employees may be difficult. One oilfield service company speaking off-the-record says that there is a still a ‘short-term mentality’ in Iraq.

Some workers are still sceptical about the length of Iraq’s contemporary oil growth and are likely to choose jobs that give them a higher pay and short term gains over staying with an employer where longer term career growth is more likely.

Aside from a few stray employees and the typical challenges notwithstanding, the general consensus between the numerous operators in Iraq is that the country’s workforce will continue to develop alongside its economy.

“Our people are loyal with us, they’ve been with us for a long time, we train them with the English language, yes we had had some people leaving to join the IOC’s, but the boom is going to stay regardless,” says Hisham Alami, general manager of Mott MacDonald.

“It’s a big country, big oil production, and it’s going to last a long time. It’s a good future for the Iraqis, it’s an excellent future for the Iraqis, a lot of them are going to benefit, there are capable engineers and I think that Iraq will continue to grow,” says Alami.

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