Wednesday, May 5, 2010

Iraq's skill shortage: Challenge vs. Opportunity

Awarded: To be developed by IOC-led consortia. Unawarded: Likely to be developed by NOCs solely.

by Daniel Canty

Kathleen Bury says understanding training gaps in Iraq is critical to realising its potential

In a quest to achieve their oil production target of 12mb/d by 2016, the Iraq Oil Ministry, over the past few months, has signed 11 long term contracts with international oil company (IOC) led consortia to develop some of their producing and non-producing oilfields.

In addition, seven oil and gas fields remain the sole responsibility of the state oil companies such as South Oil Company, North Oil Company and Missan Oil Company. With a number of engineering, procurement and construction management contracts due for award in the next few months, it is evident that the associated IOC lead field operators are not wasting any time in getting down to business.

However, with the emergence of Iraq as ‘the new hydrocarbon market’, there are a number of challenges and risks associated with the development of these fields and subsequently the execution of project work in Iraq; security, bureaucracy, corruption, lack of legal and regulatory frameworks and numerous skill gaps to name but a few.

The latter, however, is one that many companies, either currently operating already in Iraq or wish to in the future, see as being one of the most pressing challenges today.

Understanding the true capability that exists on the ground in Iraq today is purely subjective. What is clear, however, is that the key skills gaps lie within the project management/managerial/supervisory, HSE and engineering, predominantly detailed engineering functions.

With the identification of these gaps, the requirement for training and training funding is critical. Given Iraq’s limited cash availability, the Iraq Oil Ministry has ensured that a set amount to be spent on training the Iraqi population, whether on site or working within the offices of the State Oil Companies, has been written into each of the contracts that the IOCs have been awarded. This is in addition to the training programs that have been organised for Iraqi nationals over the past few years by many international oil companies; ExxonMobil, Shell, StatoilHydro, Lukoil and ConocoPhillips to name a few.

Training risks

Keen IOCs and contractors that want to mitigate against the training-related risks such as logistics, security and the availability of trainers are already starting to develop in and out of country training plans.

However, lessons learnt from the past should be incorporated in the development of these training programs to ensure that the future return on investment from the training effort is in fact reaped i.e. ensure that what is learnt on the program is taken back to the project site/office, implemented, regularly measured from a performance management perspective thereafter and refreshed when required.


The award of these fields to IOCs presents a number of opportunities for companies looking to enter Iraq, but also a number of advantages for Iraq with respect to the exposure and development of the Iraqi population. To ensure that the intent of the development is realised, lessons learnt from previous initiatives in Iraq and other countries that were or are faced with similar challenges, such as Nigeria, could be taken into account and optimized. As George Santayana states, ‘those who cannot learn from history are doomed to repeat it’.

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