By Aref Mohammed and Ahmed Rasheed
BASRA/BAGHDAD, Iraq (Reuters) - Worsening clashes among tribes and a political void is threatening security at oil installations in Iraq's main southern oil producing region, officials and security sources said.
Iraq has concentrated security forces in the north and west of the OPEC oil producer in the biggest campaign since the U.S.-led invasion in 2003 to retake territory lost to the Sunni extremist group Islamic State in 2014.
That has created a void in the south, home to Iraq's biggest oilfields, where fighting between rival Shi'ite Muslim tribes over farmland, state construction contracts and land ownership has worsened in the past few weeks.
The surge in violence risks undermining government plans to lure new investment to the oil and gas sector it needs to revive an economy hit by a surge in security spending and destruction by Islamic State.
Stability in Basra, the main southern city at the edge of the Gulf, is of vital importance as a hub for oil exports accounting for over 95 percent of government revenues.
Officials said tribal clashes had not affected oil output yet. But this could change as recent fighting with mortars and machine guns had come close to the key West Qurna oil phase 1, West Qurna phase 2 and Majnoon oilfields north of Basra city.
"Tribal feuds have been exacerbating recently and such a negative development could threaten the operations of the foreign energy companies," said Ali Shaddad, head of the oil and gas committee in Basra's provincial council.
State-run South Oil Co. (SOC) said the violence had started scaring oil workers and foreign contractors who in some cases had refused to move drilling rigs over security concerns.
"Tribal fighting near oilfields sites is definitely affecting the energy operations and sending a negative message to foreign oil firms," Abdullah al-Faris, a media manager at SOC, said.
Iraq's government has dispatched thousands of soldiers and policemen into Basra which had been like the rest of the mainly Shi'ite south relatively peaceful since 2003.
Security force have tried to disarm tribesmen, which had seized large caches of light and heavy weapons from Saddam Hussein's army in the chaos following the 2003 invasion.
But security officials said forces were stretched as troops were preparing another offensive against Islamic State, or Daesh, in the north to retake Hawija town.
Strategically located east of the road from Baghdad to Mosul and near the Kurdish-held oil region of Kirkuk, Hawija fell to Islamic State in 2014.
"We need larger forces to control rural areas and restrain lawless tribes in the south," said Army Lieutenant Colonel Salah Kareem who serves in a brigade that was based in Basra before being moved to Mosul.
"This is a difficult job for now as most troops are busy with fighting Daesh," he said.
TOP OFFICIALS QUIT
The security challenges have been worsened by a political void after top local officials quit over graft charges.
Basra's governor Majid al-Nasrawi stepped down last month and left for Iran after Iraq's anti-corruption body began investigating graft allegations against him.
In July the head of the provincial council, Sabah al-Bazoni, was arrested and sacked after the watchdog accused him of taking bribes and misuse of power.
Graft has been a major concern in Iraq but analysts say both men had also been caught in a political battle as parties from the country's Shi'ite majority were gearing up for national elections in April 2018. Basra is seen as the ultimate prize given its oil wealth and investment potential.
Bazoni, who belongs to former prime minister Nuri al-Maliki's State of Law coalition, had been at odds with Nasrawi from the Shi'ite Islamic Supreme Council of Iraq over managing the province and distributing contracts for basic services and rebuilding infrastructure in Basra.
Disagreements over how to award state contracts had escalated with each party publishing files alleging corruption against the other rivals, two Basra politicians said on condition of anonymity.
"For some political parties having the upper hand in Basra is a key objective to expand their power," said Baghdad-based analyst Jasim al-Bahadli, an expert on Shi'ite armed groups.
"Basra is forming the triangle of money, power and influence," he said.
Two officials working with foreign oil companies operating in the south said the departure of top officials raised worries that the tribal clashes could get worse.
"We need to see security challenges addressed to avoid working in a difficult operating environment," said one official working at a foreign oil firm in Basra, asking not to be named.
(Editing by Ulf Laessing and Susan Thomas)