A construction conglomerate owned by the family of former al-Qaida leader Osama bin Laden had equipment and buses set on fire by laid off employees.
The massive fire came shortly after Saudi Binladin Group (SBG), a massive construction company in Saudi Arabia, laid off more than 50,000 foreign workers in a last ditch effort to turn around a company recently slammed by historically low oil prices.
Fire fighters extinguished the flames without any injuries being reported, according to Makkah officials.
Scores of company employees have staged protests and mini riots in Makkah and Jeddah, where the company holds its offices. Some of the employees claim they have not been paid for several months.
“The people laid off are not thrown in the street without pay,” a person close to the matter told The Wall Street Journal Monday. “The Saudi Binladin group is extremely careful in honoring its commitments.”
The employees were fired and issued exit visas, reports Arab News.
SBG saw massive profits and gains in oil-dependent Saudi Arabia when oil prices were pegged at levels as high as $100 per barrel in 2014. The company was tasked with building multi-billion-dollar projects.
But the group is feeling the pain now as oil-rich countries throughout the Persian Gulf, as well as Saudi Arabia, have cut spending on construction projects to help bridge massive budget deficits caused by plummeting oil prices.
Officials from the Organization of the Petroleum Exporting Countries (OPEC) failed to come up with an agreement to freeze oil production in an April meeting in Doha, which will likely lead to prolonged and consistently low oil prices.
As a result of the impasse, crude production levels by OPEC rose in April to 32.64 million barrels per day.
SBG was started 85 years ago by the grandfather of infamous terrorist bin Laden.
Part of the problem, the person close to the situation told reporters, is the Saudi government has refused to honor contractual agreements to pay for work done on hospitals and other infrastructure.
“There are many projects where payments haven’t happened or where there has been a delay in paying the laborers,” a person familiar with the situation told reporters. “Some of these projects are coming to an end or running slow, so as a company you adjust and reduce the fixed costs among other things.”
The low oil prices have taken their toll on oil companies as well.
Major U.S. oil producer Ultra Petroleum Corp. was forced to file Chapter 11 bankruptcy Friday. The company cited low natural gas prices and billions of dollars of debt a reasons for the move.
Ultra claimed in court documents filed in Texas it has only $1.3 billion in assets, compared to $3.9 billion in debt. According to the documents, Ultra produces gas in Wyoming and Pennsylvania and crude oil in Utah.
The company requested the court continue a surety-bonding program that had $12.6 million outstanding as of the bankruptcy date. The program would secure the company’s obligations regulations on environmental, road damage and plugging of wells.
The oil slump and bloated oil inventories are having their effect on oil producers inside and outside of the U.S.
The Energy Information Administration reported in March oil stocks jumped by 3.9 million barrels to a total of 521.9 million barrels. The oil glut contributed to the 70 percent reduction in oil prices since the 2014 high of $100 per barrel.
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