By TIMOTHY WILLIAMS

WASIT PROVINCE, Iraq - When China’s biggest oil company signed the first post-invasion oil field development contract in Iraq last year, the deal was seen as a test of Iraq’s willingness to open an industry that had previously prohibited foreign investment.

One year later, the China National Petroleum Corporation has struck oil at the Ahdab field in Wasit Province, southeast of Baghdad. And while the relationship between the company and the Iraqi government has gone smoothly, the presence of a foreign company with vast resources drilling for oil in this poor, rural corner of Iraq has provoked a wave of discontent here.

“We get nothing directly from the Chinese company, and we are suffering,” said Mahmoud Abdul Ridha, head of the Wasit provincial council. “There is an unemployment crisis. We need roads, schools, water treatment plants. We need everything.”

The result has been a local rights movement - extraordinary in a country where political dissent has historically carried the risk of death - that in the past few months has begun demanding that at least $1 of each barrel of oil produced at the Ahdab field be used to improve access to clean water, health services, schools, paved roads and other needs in the province, which is among Iraq’s poorest.

Frustrations have spilled over into sabotage and intimidation of Chinese workers, turning the Ahdab project into a cautionary tale for international companies seeking to join the rush to profit from Iraq’s vast untapped oil reserves.

Because Iraq is so heavily dependent on oil revenue, any hesitation by international oil companies to invest could mean years of continued economic and political instability in the country.

The Iraqi government has so far rejected the locals’ demands, but people here are clearly beginning to feel that something new is possible.

“No one would have dared to ask for such a thing during Saddam’s regime; if he did, he would definitely be executed,” said Ghassan Ali, a 43-year-old farmer who lives near the oil field. “But now we are a democratic country, so we have the right to ask for our rights like any other province in Iraq.”

The basis of the complaints here is that, aside from the hiring of a few hundred residents as laborers and security guards at salaries of less than $600 a month, the Ahdab field - a roughly $3 billion development project - has provided no local benefit.

China National Petroleum says it needs relatively few workers because it is still in the exploration phase of its 23-year project at the Ahdab field. Oil production is not scheduled to begin for two and a half years.

Some farmers have responded by destroying the company’s generators and severing electrical lines.

The oil field’s 100 or so Chinese workers rarely leave their spartan compound for fear of being kidnapped, the company said.

The Iraqis’ anger has been increasingly channeled into a movement, expressing concerns about workers’ rights, pollution, transparent hiring practices and public accountability, among other issues.

Ghassan Atiyyah, executive director of the nonprofit Iraq Foundation for Development and Democracy, said the nascent activism in Wasit was part of a broader shift in a society that until recently had resisted such demands because of years of dictatorship, economic sanctions, war and a culture that retains a strong tribal influence.

“There is a social transformation going on in Iraq that will take years to sort out,” he said, “but what we are seeing is a new social order emerging as rural people challenge the urban people who have always looked down on them.”

The Iraqi government and the Chinese oil company have played down the tensions in Wasit Province, saying that aside from a few minor disruptions, things are going according to plan. Still, the unrest comes at a critical time for Iraq’s oil industry, which has struggled to reach prewar production levels and is preparing to auction off 10 oil fields to international companies this fall.

The Ahdab field is surrounded by tenant farmers living in cramped, mud houses without electricity or running water. They had hoped the arrival of the oil company would end their poverty. Instead, China National Petroleum has hired only about 450 workers, many of whom lived outside the province, according to residents and local officials.

“The problem is that people were expecting thousands of jobs right away, and then they realized that the company depended more on machines than on people,” said Ali Hussein, head of the local district council.

Farmers complained earlier this year that the oil company’s electrical and seismic equipment was damaging their homes and crops. About the same time, electrical lines, many of which were laid across farmland, were severed or stolen, as were expensive generators and other equipment.

Ghazi Hwaidi, 39, whose wheat field shares space with towering seismic prospecting equipment, said he had sought compensation for his damaged crops, and had also applied for a job with the oil company. He has not received a response to either effort.

“My farm is now more like an oil field,” he said, “and I have gotten nothing for it.”


Iraqis in rural Wasit Province say they have seen little benefit from an oil development deal with China National Petroleum. A Chinese guard on duty at the Ahdab oil field, which is under exploration.