BAGHDAD - Since early February international companies, including those charged with performing urgent work in Iraq’s oil sector, have been largely unable to secure visas for essential personnel. The prime minister’s office is responsible for the blackout, according to two high-level officials in the Interior Ministry.
As a result of the visa stoppage, international companies of all stripes — oil companies, embassy contractors, security firms, and prospective investors — are facing an imminent crisis. Key people cannot do their jobs because they cannot enter the country. And officials for oil companies contracted by the Iraqi Oil Ministry have said it's only a matter of time – fast approaching – before their work in the field will slow down.
“These companies, and especially the important oil companies — the last couple of months their applications for their visas don’t just go through the Interior Ministry but should go through the prime minister’s office,” said a senior official at the Interior Ministry, speaking on the condition of anonymity. “This is especially for the important companies, investing companies, like the oil companies."
This account was confirmed by a second senior official at the ministry, who said, “These instructions came directly from the office of the prime minister to the Interior Ministry.”
The prime minister’s office did not give a rationale for the new policy or explain the reason for the delays.
When asked about allegations that prime minister’s office was responsible for the eight-week-long visa delay, Ali al-Mousawi, the prime minister’s media advisor, said: “His Excellency Prime Minister Nouri Al-Maliki is aware of that, and there have been some measures issued to ease the process of getting visas.”
At the time of publication, Maliki’s office had not provided details of such measures.
Foreign investors have long complained about Iraq’s byzantine officialdom, which can take several weeks to process visas. But in the last two months, many foreign organizations say the bureaucratic machinery has ground to an unprecedented halt.
“It’s become a big issue,” said one senior international oil company (IOC) official. “Probably within another two or three weeks it’s going to directly impact our ability to get people in and do work. There are others in worse conditions than us, too.”
The visa blackout has already delayed the rotation of personnel out of and into the country. Contractors say personnel are being held in country longer than originally scheduled to cover the gaps left by replacements who are waylaid in transit hubs like Dubai and Amman.
"The visas are paralyzing us. We've got no new visas" since early February, said a manager at one service company working for IOCs in southern Iraq. "If we go out, when do we go back in?"
In an effort to boost local employment and training, Iraq has an established policy of restricting visas for unskilled laborers. But the recent blackout is affecting a different tier of foreign visitors — prospective investors, top executives, managers, and technicians with specialized skills.
Oil Ministry officials involved with contracting said they don't have visa problems on their radar. But such problems threaten to undermine Iraq’s multi-billion dollar oil investment strategy.
According to the Technical Service Contracts signed by the Oil Ministry and approved by the Iraqi Cabinet, the government is to "provide assistance … to secure and renew all entry visas or work permits for employees of Contractor and Operator or Sub-Contractors." Without such assistance, oil companies – which have already encountered delays in importing basic supplies and equipment – are now largely unable to put their own people on the ground.
The government has projected that Iraq will increase its oil production from its current 2.7 million barrels per day (bpd) to over 13.5 million bpd within seven years. Such figures, which many have criticized for being overly optimistic, assume that the government will do its part to ease the logistical and bureaucratic burden on companies.
“I don't know the reasons (for the visa delays),” said Sami al-Araji, head of Iraq’s National Investment Commission. He said he's been able to process visas for investors and that the months-long lag was just raised to him by a private security company. “This is outside the normal business standards. Anything beyond the normal range is unacceptable.”
One oil industry official estimated each company operating in Iraq’s southern oil hub of Basra is waiting on “hundreds” of visas.
“The backlog is building, the backlog of sending people is growing,” said a senior IOC official.
Iraq has many incentives to woo foreign companies. The country’s reconstruction needs far outweigh even a budget bolstered by oil revenues, so the government’s strategy for economic growth depends heavily on attracting international capital, technology, and expertise. The visa problems, however, are literally keeping investors out of the country.
“If these (oil companies) can't get visas, a small British businessman coming out on spec doesn't have a hope in hell, which is why we all need to work to reverse the current obstacles,” said Alice Walpole, the top British diplomat in Basra. The visa shortage, she said, “will have done irreparable damage, in terms of discouraging some companies."
Now, however, instead of throwing the full weight of their human resources behind Iraq’s oil ambitions, oil companies are being forced to make backup plans.
"People will eventually get reassigned to other projects around the world,” said Mike Townshend, president of BP’s operations in Iraq, when asked what will happen to personnel who aren’t being allowed into the country.
Neither the prime minister’s office nor the Ministry of Interior announced any change of policy. Indeed, almost nobody — from senior diplomats, to company executives, to Iraqi officials responsible for foreign investment — could explain where the bureaucratic pipelines were blocked, let alone why.
“We’re all a little mystified," said an IOC official. "We get different answers depending on who we talk to."
In the absence of clear information from the government, rumors have been flying.
Sources at the Interior Ministry dismissed speculation that the visa delays are the result of a slow government-formation process. Visa applications are still being accepted – and, to be sure, visas are still being issued. Lower-level Interior Ministry officials say they've been given no order to deny or stall visas.
It’s not just oil companies who are affected. Private security companies have not been able to rotate in new personnel. Even companies supporting the U.S. Embassy have been held up.
“We are experiencing visa problems for our contractors,” said a U.S. Embassy official. “We have been assured by the (Government of Iraq) that a solution is in the works, but until the solution is realized, it is an area of concern.”