In Iraq’s fields of black gold, thousands lose livelihoods

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Mohammed Haider is among thousands of workers in Iraq’s oil sector laid off this year. (Reuters)
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Iraqi workers have been forced to take unpaid leave or been laid off completely as energy firms cut costs because of plunging oil prices. (AFP)
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Updated 06 June 2020

In Iraq’s fields of black gold, thousands lose livelihoods

  • Iraq has pledged to cut nearly a million barrels of oil production per day (bpd) in line with OPEC cuts

BAGHDAD: Mohammed Haider, a security worker in Iraq’s southern oilfields, thought he was safe after signing a new one-year contract to guard oil facilities. Three days later, he was out of a job.

“I got laid off. They threw us out on the pavement,” the 38-year-old said, speaking as he protested outside the Basra Oil Company headquarters, the national partner for foreign companies.

Haider had been hired to drive vehicles for a British security firm around the giant West Qurna 1 oilfield that produces hundreds of thousands of barrels of crude each day — part of OPEC member Iraq’s principal source of wealth.

He now spends his days at home or searching for jobs that are hard to come by in a crisis-hit economy.

“I can’t even fall back on taxi-driving work. The curfew because of coronavirus means I’d get arrested for driving around illegally,” he said later at his home.

Haider is one of thousands of workers in Iraq’s oil sector who were laid off this year after a fall in oil prices caused by the COVID-19 pandemic, and who struggle to find any other source of income.

Iraq in March asked oil companies to cut their budgets by 30 percent because of plummeting oil prices. Energy companies in the south responded by cutting costs. Subcontractors, including security, construction and transport firms, let thousands of workers go, according to local authorities.

“Of about 80,000 Iraqis working in the oilfields, some 10,000 to 15,000 are now out of work,” said Mohammed Ibadi, a local government official in Basra province, where most of the southern fields are located.

Iraqi workers had been forced to take unpaid leave or had been laid off completely, mostly by subcontractors, he said.

The British security firm that employed Haider declined to comment. 

Ibadi’s office received dozens of complaints from workers who asked Iraqi authorities to sanction companies that do not comply with contractual termination terms. The local authorities negotiated 50 percent and 25 percent salaries for four months for some 2,000 workers who had been laid off, he said.

Khalid Hamza, associate director of the Basra Oil Company, said the government body would not accept the arbitrary termination of local staff.

“We particularly need to protect the jobs of the local population,” he said.

Iraq has pledged to cut nearly a million barrels of oil production per day (bpd) in line with OPEC cuts. Its exports stood at 3.2 million bpd in May. The cuts have slashed state revenue, of which it makes up more than 90 percent.

The government faces making cuts to public sector pay — a move that would further anger impatient Iraqis who staged protests last year against alleged government corruption and lack of jobs.

Ibadi fears the economic and social crisis will worsen as the pandemic hits Iraq harder.

With most jobs in Basra linked to the energy industry, it is near impossible for workers like Haider to find an alternative source of income.

The father of three, who worked for five years as a driver for the British company, subcontracted by an American oil corporation, is ready to take on any job to provide for his family.

Haider fears that he might no longer be able to cover school or medical costs.

“I wish the company would take me back, even for half my wages,” he said. 


S&P 500 inches closer to record high

Updated 12 August 2020

S&P 500 inches closer to record high

  • US stock market index returns to levels last seen before the onset of coronavirus crisis

NEW YORK: The S&P 500 on Tuesday closed in on its February record high, returning to levels last seen before the onset of the coronavirus crisis that caused one of Wall Street’s most dramatic crashes in history.

The benchmark index was about half a percent below its peak hit on Feb. 19, when investors started dumping shares in anticipation of what proved to be the biggest slump in the US economy since the Great Depression.

Ultra-low interest rates, trillions of dollars in stimulus and, more recently, a better-than-feared second quarter earnings season have allowed all three of Wall Street’s main indexes to recover.

The tech-heavy Nasdaq has led the charge, boosted by “stay-at-home winners” Amazon.com Inc., Netflix Inc. and Apple Inc. The index was down about 0.4 percent.

The blue chip Dow surged 1.2 percent, coming within 5 percent of its February peak.

“You’ve got to admit that this is a market that wants to go up, despite tensions between US-China, despite news of the coronavirus not being particularly encouraging,” said Andrea Cicione, a strategist at TS Lombard.

“We’re facing an emergency from the health, economy and employment point of view — the outlook is a lot less rosy. There’s a disconnect between valuation and the actual outlook even though lower rates to some degree justify high valuation.”

Aiding sentiment, President Vladimir Putin claimed Russia had become the first country in the world to grant regulatory approval to a COVID-19 vaccine. But the approval’s speed has concerned some experts as the vaccine still must complete final trials.

Investors are now hoping Republicans and Democrats will resolve their differences and agree on another relief program to support about 30 million unemployed Americans, as the battle with the virus outbreak was far from over with US cases surpassing 5 million last week.

Also in focus are Sino-US tensions ahead of high-stakes trade talks in the coming weekend.

“Certainly the rhetoric from Washington has been negative with regards to China ... there’s plenty of things to worry about, but markets are really focused more on the very easy fiscal and monetary policies at this point,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

Financials, energy and industrial sectors, that have lagged the benchmark index this year, provided the biggest boost to the S&P 500 on Tuesday.

The S&P 500 was set to rise for the eighth straight session, its longest streak of gains since April 2019.

The S&P 500 was up 15.39 points, or 0.46 percent, at 3,375.86, about 18 points shy of its high of 3,393.52. The Dow Jones Industrial Average was up 341.41 points, or 1.23 percent, at 28,132.85, and the Nasdaq Composite was down 48.37 points, or 0.44 percent, at 10,919.99.

Royal Caribbean Group jumped 4.6 percent after it hinted at new safety measures aimed at getting sailing going again after months of cancellations. Peers Norwegian Cruise Line Holdings Ltd. and Carnival Corp. also rose.

US mall owner Simon Property Group Inc. gained 4.1 percent despite posting a disappointing second quarter profit, as its CEO expressed some hope over a recovery in retail as lockdown measures in some regions eased.

Advancing issues outnumbered decliners 3.44-to-1 on the NYSE and 1.44-to-1 on the Nasdaq.

The S&P index recorded 35 new 52-week highs and no new low, while the Nasdaq recorded 50 new highs and four new lows.