Shell evacuation reveals cracks in Basra Gas Company consortium

Protests that prompted an emergency evacuation in May were caused by a breakdown in payments and cooperation between Shell and its government partners.
Shell evacuation reveals cracks in Basra Gas Company consortium
Basra Gas Company (BGC) workers break through a security gate topped with barbed wire to enter the residential compound of Royal Dutch Shell on May 18, 2020. (ALI AL-AQILY/Iraq Oil Report)

BASRA - When angry workers stormed through the gates of the Basra Gas Company (BGC) last month, prompting the emergency evacuation of Royal Dutch Shell's foreign staff, the protest was a dramatic result of a simple problem: nobody was getting paid.

The Iraqi government was not paying the BGC consortium; the consortium was not paying its constituent companies; and the state-run South Gas Company (SGC), running short of cash, was not paying thousands of its workers who had been seconded to the project. As the consortium partners haggled over a stopgap plan for providing salaries, workers lost their patience.

"BGC asked SGC to pay the salaries of the seconded workers, but SGC claimed there are not enough funds to pay them," said a BGC official. "That's how the trouble started."

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