Iraq’s Economic Tipping Point

The big political news in recent days was the announcement that votes are to be re-counted in the Baghdad district, which accounts for 70 of the parliament’s 325 seats.

With Iyad Allawi’s Iraqiya party having apparently defeated incumbent Prime Minister Nouri al-Maliki’s State of Law coalition by just two seats, any changes to the result could be very significant. The outcome will not be known for up to three weeks, however, as roughly 2.5 million votes must be manually re-counted, and it is still possible that re-counts will also be ordered in other districts.

Meanwhile, the Iraqi Oil Ministry has gone ahead with the tendering process for three gas fields – Akkas, Siba, and Mansuriya – inviting fifteen major oil companies to bid. Considering this, and the upsurge in business activity throughout the country, Upper Quartile’s Adrian Green commented that “Iraq has truly reached an economic tipping point”.

And while the price of natural gas has fallen by a third since the start of the year, and by 70% over the past two years, it is no less politically sensitive. The Gas Exporting Countries Forum held its annual meeting this week in Algeria, and some members are pushing for it to be become the OPEC of the gas industry, with all that that implies for supply and pricing. Iraq is not yet a member of this club, but this round of contracts may move it a step closer.

Upper Quartile and AAIB work closely with businesses in the energy and infrastructure sectors. To see how they can assist your business in Iraq, please contact Gavin Jones or Adrian Shaw.

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