IOCs and Iraq’s Peculiarities

By Tariq Abdell, Founder & Chairman, Mesopotamia Insight.

The opinions expressed here are those of the author, and do not necessarily reflect the views of Iraq Business News.

Recent oil conferences in Baghdad and Basrah, hosted respectively by the oil ministry and the USG, underscored the International oil companies (IOCs) poor situational awareness, strategic foresight, versatility, and, most importantly, obliviousness to the country’s ages-old nuances. Furthermore, given the country continues ethno-sectarian contentions and a convoluted political impasse, such frailties coupled with unforeseen externalities associated with the country post-conflict environment are inherent sources of capital exposure and, consequently, business extinction.

Thus, although IOCs are known of operating in high-risk environments e.g., Venezuela, Nigeria, etc… Iraq’s peculiarities , left unchecked, could be a source of the workforce distress and capital depletion. Simply put, as result of decades of wars, sanctions, languished infrastructure, and brain drain, it will take sometimes for an eastern country such as Iraq – both people and institutions – to adjust to a newly adapted democratic values and western business practices. Consequently, IOCs must devise an acculturated and comprehensive investment strategy which does factor in Iraq’s peculiarities. Moreover, to ensure the success of such strategy, IOCs must build in-house leaders, who acquire transcultural competence, strategic insight, and situational awareness; to overcome the aforementioned societal and institutional hurdles, and safeguard their company business interests. The suggested approach will entail the following:

Corporate social responsibility

IOC must adopt a genuine and acculturated corporate social responsibility for a broad and immediate societal impact and self-image promotion. To this end, IOC must work with renowned and genuine NGOs with a solid track record in their respective fields of operations. Moreover, it’s advisable for an IOC to reach out to key individuals and institutions nearby their respective field of operations e.g., IOC operating in Basrah province (Zubeir, Rumeila, west-Qurna fields, etc…) may sponsor an academic exchange or cooperation program with certain departments within Basrah University.

Trans-cultural competence

IOC must build in-house leaders with an acute global mindset and transcultural competence enabling their leaders to operate flawlessly in a multiethnic and/or multicultural environments. Moreover, such attributes are a prerequisite for a successful business endeavor in a politically volatile environment such as Iraq’s.

Case-in-point:

Tony Hayward’s, the departing chief executive of BP, fiasco with the U.S. media and public as result of a poor leadership and calamitous public relations (” I want my life back”). In fact, Mr. Hayward’s miscalculations did cost him his job and, in the process, BP’s public image – Villain oil company.

Strategic insight

IOCs must initiate constructive engagements with key individuals and institutions, namely members of the provincial government, military leadership, tribal and religious leaders, businessmen, media representatives, and NGOs. Such engagements are viable expedient to dissipated some of the deep-seeded apprehensions vis-a-vis oil companies, cultivate fruitful relationships and, consequently, foster a sustainable strategic partnerships a prerequisite for business survival and success in a hostile environment.

In summary, by understanding the country’s centuries-old nuances and espousing a genuine corporate responsibility, transcultural competence, and strategic insights, IOCs are most likely to avoid undergoing BP’s ordeal in Iraq’s investment hostile climate. In fact, BP’s misfortune, as result of oil spill in the Gulf of Mexico, poor judgment, and, most importantly, misunderstanding of the America’s peculiarities; is a wakeup call for the rest of the industry to adopt a acculturated strategies in their areas of operation- Taking into account host-nation cultural, geographic, and socio-economic fabric. According to the Chinese strategist Sun Tzu “Ignorant both of your enemy and yourself, you are certain to be in peril.”

The opinions expressed here are those of the author, and do not necessarily reflect the views of Iraq Business News.

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The author, Tariq Abdell, is an Iraq analyst, and Founder & Chairman of Mesopotamia Insight

He can be contacted at: [email protected]

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Followed on twitter: http://www.twitter.com/atariqx

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