MEED: Which markets is United Oil focusing on?

Miassar Nerabeh: Our main focus is on Iraq and Egypt. Initially, we operated just in Iraq because it offered a better return on investment than our home market, and because we were focused on overcoming the challenges in that market.

We’re open to opportunities … but we’re mainly focused on Iraq, Egypt and Syria, followed by Libya and Sudan

Up to now we’ve not had any activity in Syria, but we intend to enter the market for tenders there this year. We’re also in negotiations with Libya and Sudan, but nothing has been finalised.

We are mainly looking at exploration and production concessions, probably as a member of a consortium. Meetings are going on in several places in the region, and we’re open to opportunities in any market, but we’re mainly focused on Iraq, Egypt and Syria, followed by Libya and Sudan.

What have been the challenges of working in Iraq?

During the conflict it wasn’t easy. If we needed any maintenance work to be done we couldn’t find any experts to come to Iraq. But we delivered the first project on time and we expect to deliver the second on time.

The current uncertainty of the government situation in Iraq has also caused some difficulties in finalising contracts. I think we’ll have to wait until there is a new government to finalise the details of any further work.

Do you intend to keep all your rigs working in Iraq?

The cost of mobilisation is high and we expect to get more work in Iraq, so we plan to keep the rigs there.

We are currently in negotiations with South Oil Company (SOC) about extending our work there, so that is a possibility. We are participating in many tenders in Iraq at the moment and are waiting for the results.

There are a number of tenders for the UK’s BP,  and also SOC, and we are waiting for a final decision from them. We would expect to get work by early next year. If we don’t secure any agreements, then we will maybe move the rigs to Syria or Egypt. We are planning to use a local rig for our exploration work in Egypt, at least for the first well, but if we find oil we could use our own rigs.

How have you been affected by the increase in materials costs in recent months?

Our profits have been considerably reduced. Materials for the second contract in Iraq were purchased at the beginning of the project, so that was okay, and the rigs are our own.

But the cost of spare parts, maintenance and especially personnel went up, so our profits have been lower than expected.

What other challenges do you face?

Competition for labour is high. At the moment lots of companies are looking for work in Iraq, so there is a lot of demand for Iraqi workers.

We’ve faced some problems there, and have had to raise salaries.

For our first project in Iraq, we employed mainly Iraqi workers and we started the second project with mainly local personnel, but we faced problems, maybe because of competition.

Now we’ve had a change in policy and are employing Syrians, Pakistanis and other nationalities for our expert labour, but the majority of the workforce is still Iraqi.

At the moment the use of local labour isn’t stipulated in the contracts, but there may be more discussions on this in the future.

If we don’t get any more drilling work in Iraq we will have to lay people off, especially local workers, but we will keep people on for maintenance work, and in case, new projects come along.