BP has lifted its first cargo of Iraqi crude as payment in kind for boosting output at the country's biggest oilfield.
But by reaching that milestone, it may have triggered a popular backlash against foreign oil companies in Iraq.
Last Saturday, as the tanker Oceanis sailed from the Basra oil terminal carrying 2 million barrels of crude for BP worth more than US$200 million (Dh734.6m), Iraqi state oil workers threatened rotating wildcat strikes in a country-wide dispute over pay. The labour action spread on Tuesday to the Rumaila oilfield, where BP and China National Petroleum Corporation (CNPC) have been working to raise crude production under a long-term technical services contract.
Late last year the partners reached their initial target of a 10 per cent rise in crude production, becoming eligible to receive payments from Baghdad for the rise in output and recover their development costs.
But the state employees, aggrieved about receiving less pay than colleagues working for international oil companies, called a "boycott day" just as BP was to receive its first payment, and tried to stop foreign workers from entering the Rumaila site.
An internal union memo also directed members to block access to the Zubair and Majnoon oilfields, being developed by groups led respectively by Italy's Eni and Royal Dutch Shell.
The strike was averted through negotiations but a showdown may have been only postponed.
Unless they are offered higher wages, Iraqi state workers are likely to grow more resentful of the better-paid foreigners.
But Baghdad would be hard pressed to provide those pay rises.
"As vast and virtually simultaneous work programmes get under way at Iraq's main oilfields, the payments [to foreign oil companies] will now significantly start eating into Iraq's budgeted oil export revenue," said Samuel Ciszuk, the senior Middle East energy analyst at IHS Global Insight.
"Whether the oil ministry will be able to fund imminent pay increases is doubtful.
"So far, the Iraqi government response to the oil unions has been to call any action illegal and threaten severe security crackdowns and prison terms for those involved."
The "suddenly rather dense-looking oil cargo payment schedule" has materialised as Baghdad continues to struggle to meet huge reconstruction needs from an overstretched budget, Mr Ciszuk said.
Oil export income to the state would flow in at a much slower rate, "a factor that might create a political backlash if not managed carefully", he said.
Making the situation more inflammatory, Iraqi oil contracts lack the maximum limits to annual cost recovery that are found in contracts in other countries.
The easiest way for the government to handle the situation would be to cut Iraq's aggressive 2017 oil production target from 12 million barrels per day to something more realistic, Mr Ciszuk suggested.
"The country can ill afford the luxury of maintaining a swing production capacity akin to Saudi Arabia's before being properly rebuilt," he said.
The alternative - a political backlash against government payments to international oil companies - would create "unpredictable consequences", Mr Ciszuk warned.
BP and CNPC are owed about US$1 billion each for the oil they have pumped this year.
A second tanker shipment on behalf of CNPC is expected shortly.
tcarlisle@thenational.ae
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
Asia Cup 2018 final
Who: India v Bangladesh
When: Friday, 3.30pm, Dubai International Stadium
Watch: Live on OSN Cricket HD
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
Race card for Super Saturday
4pm: Al Bastakiya Listed US$250,000 (Dh918,125) (Dirt) 1,900m.
4.35pm: Mahab Al Shimaal Group 3 $200,000 (D) 1,200m.
5.10pm: Nad Al Sheba Conditions $200,000 (Turf) 1,200m.
5.45pm: Burj Nahaar Group 3 $200,000 (D) 1,600m.
6.20pm: Jebel Hatta Group 1 $300,000 (T) 1,800m.
6.55pm: Al Maktoum Challenge Round 3 Group 1 $400,000 (D) 2,000m.
7.30pm: Dubai City of Gold Group 2 $250,000 (T) 2,410m.
More on Quran memorisation:
The five pillars of Islam
More on Quran memorisation:
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
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Read more from Kareem Shaheen
More coverage from the Future Forum
About Karol Nawrocki
• Supports military aid for Ukraine, unlike other eurosceptic leaders, but he will oppose its membership in western alliances.
• A nationalist, his campaign slogan was Poland First. "Let's help others, but let's take care of our own citizens first," he said on social media in April.
• Cultivates tough-guy image, posting videos of himself at shooting ranges and in boxing rings.
• Met Donald Trump at the White House and received his backing.
The specs: 2018 Nissan 370Z Nismo
The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
Engine: 3.7-litre V6
Power: 350hp @ 7,400rpm
Torque: 374Nm @ 5,200rpm
Transmission: Seven-speed automatic
Fuel consumption, combined: 10.5L / 100km
UAE currency: the story behind the money in your pockets
Profile of Tamatem
Date started: March 2013
Founder: Hussam Hammo
Based: Amman, Jordan
Employees: 55
Funding: $6m
Funders: Wamda Capital, Modern Electronics (part of Al Falaisah Group) and North Base Media
TECH%20SPECS%3A%20APPLE%20WATCH%20SERIES%208
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Honeymoonish
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