If ISIS is a 'State', Do Gas Sales Make It an 'NOC'?

♠ Posted by Emmanuel in ,, at 10/16/2015 03:28:00 PM
Like selling relics, ISIS funds itself by selling energy supplies.
Here's another terminology-stretching exercise for you to contemplate: Despite virtually no nation-state recognizing the so-called "Islamic State in Iraq and Syria," ISIS designates itself as such. ISIS knows Westphalia. Unbeknownst to many, that ISIS occupies considerable amounts of "Iraqi" and "Syrian" territory has resulted in an uneasy bargain between the Assad regime and the ISIS forces that occupy gas-producing regions:
Isis and the Assad regime remain battleground enemies, but on Syria’s gasfields the need for electricity has forced them into a Faustian bargain. Gas supplies 90 per cent of Syria’s power grid, on which Isis and the Assad regime depend. Isis controls at least eight power plants in Syria, including three hydroelectric facilities and the country’s largest gas plant. The regime has companies that know how to run them. 

Syrian activists and western officials have long accused the regime of making secret oil deals with Isis, which controls nearly all of Syria’s petroleum-producing east. But an FT investigation shows co-operation is strongest over the gas that generates Syria’s electricity. Interviews with over a dozen Syrian energy employees have revealed agreements that are less about cash than about services — something they may find more valuable than money.

The business deals do not translate into a truce. The two sides continually attack one another’s employees and infrastructure. The regime points to these clashes as proof that such understandings do not exist. In a written statement, Syria’s Ministry of Oil and Natural Resources said: “There is no co-ordination with the terrorist groups regarding this matter.” But it acknowledged some of its employees work under Isis “for the sake of preserving the security and safety of these facilities”.

But others describe the fighting as part of a struggle for better terms, where neither seeks to destroy the other. “Think of it as tactical manoeuvres to improve leverage,” said the owner of one Syrian energy company, who met the FT but asked not to be named. “This is 1920s Chicago mafia-style negotiation. You kill and fight to influence the deal, but the deal doesn’t end.”
So Assad's regime and ISIS are literally out to kill each other, but death doesn't undo the deals made for a continued supply of energy from ISIS-controlled territory. What's more, ISIS is not only a self-styled state, but supposedly has its own HR department [!] recruiting energy sector workers. This is in keeping with the post's titular idea about state-owned enterprises. To be a legitimate state in their part of the world, ISIS must not only be a state but also have a national oil corporation (NOC):
Isis’ strategy has rested on projecting the image of a state in the making, and it is attempting to run its oil industry by mimicking the ways of national oil corporations. According to Syrians who say Isis tried to recruit them, the group headhunts engineers, offering competitive salaries to those with the requisite experience, and encourages prospective employees to apply to its human resources department.

A roving committee of its specialists checks up on fields, monitors production and interviews workers about operations. It also appoints Isis members who have worked at oil companies in Saudi Arabia or elsewhere in the Middle East as “emirs”, or princes, to run its most important facilities, say traders who buy Isis oil and engineers who have worked at Isis-controlled fields.
Occupying energy-rich regions was a deliberate part of ISIS strategy for obtaining a continued flow of funds for its operations. Let's just say though that corporate governance matters pertaining to employee treatment are...somewhat different from what we expect from modern corporations;
The pawns in this deadly game are employees of state-run energy companies and the private groups they contract. Instead of worrying over valves and pipelines, Ahmed spent much of his time at Tuweinan parsing a high-stakes mind game with his militant overseers. They beat workers regularly, and even killed one in front of his colleagues. “The worst part is knowing that once you’re there, you belong to no one,” he said. “To both the regime and to Isis, you become untrustworthy.”
Instead of being fired after offending your employers, you pay with your life with ISIS. If you're still curious, the FT also has a map showing where the oil goes for its most importance source of revenue.