The Kurdistan Region of Iraq’s international trade conference is proclaimed a success as potential investors welcome the strongest news yet on impending oil flows from the Region – and look to seize the wider investment opportunities available in other sectors.
The event on June 15th and 16th was hosted in the City of London by the Kurdistan Regional Government UK Representation with Prime Minister Barham Salih the keynote speaker, and attended by over 500 delegates including potential investors representing international businesses from 26 countries, and diplomats from 12 countries.
Prime Minister Salih declared that the fine detail on international oil contracts would soon be ironed out between the Kurdistan Regional Government and Baghdad, and oil revenues would start flowing into the country again on an increasingly large scale.
Minister for Natural Resources, Ashti Hawrami stated that the Region will have pipeline capacity to carry 100million barrels per day within 15months, will be a net exporter of oil within two years, and will actually be pumping 100million barrels per day out of the ground within four years.
British government ministers joined delegates in heralding the conference a success and welcoming the opportunities it has created.
Speaking at the conference, Alistair Burt, UK Foreign Office Minister for the Middle East, welcomed the “great opportunity for British businesses to build strong commercial links between the UK and the Kurdistan Region”.
Also speaking at the conference, UK Trade and Investment Minister Baroness Wilcox said: “The Iraqi Kurdistan region is a gateway for British companies looking to establish a foothold in Iraq. The Iraqi Kurdistan region offers huge potential across a range of sectors for British companies that want to secure a share of this emerging market.”
Paul Brunet, Atlantic Oil Field Services, said: “We are already active in the Kurdistan Region, so we appreciate the stable and secure business environment it offers. News of progress in agreement between Baghdad and Erbil regarding oil revenue-sharing is to be warmly welcomed. This will surely be instrumental in stimulating the Region’s ongoing development.”
Chris Frost, Partner at PriceWaterhouseCoopers, said: “This event has presented great opportunities to renew existing relationships and build new ones. PriceWaterhouseCoopers are delighted to let people know about our office in Erbil, and we’re keen to help facilitate further investment in this exciting and dynamic Region.”
Stephan John, People 1st, said: “This conference has been tremendously successful in demonstrating the breadth of investment opportunities the Kurdistan Region has on offer – not just in the oil and natural gas sectors, but in areas as diverse as education, telecoms, agriculture and finance. We are working to develop higher and vocational education in the Region – something we see a fundamental to its long-term development. We have been extremely impressed by both the ambition of the Region, and the strides it has made so far.”
Pasquale Cataldo, Business Manager at New Holland Agriculture – part of the Fiat Group – said: “This conference has been a huge success, and made clear that the economic regeneration of the Kurdistan Region is no distant dream – rather, an exciting reality. The opportunities are expansive and the territory favourable. The Kurdistan Region has a promising economic future ahead.”
International companies represented a range of critical sectors at the event, including:
- Banking & finance: HSBC, Credit Suisse, the Trade Bank of Iraq, Standard Chartered Bank, Forbes & Manhattan
- Consumer: Pepsico
- Construction: Lafarge, Caterpillar
- Defence & aerospace: Aegis, BAE Systems, Lufthansa
- Oil & gas: Shell, GE International, Heritage Oil, Genel Enerji, Korea National Oil Corporation
- Professional services: PriceWaterhouseCoopers, Norton Rose, DLA Piper, YouGov
- Telecoms: Asiacell, Motorola, Korek Telecom
- Czech Republic
- Islamic Republic of Iran
- Republic of Slovenia
- Republic of Turkey
Representatives from the following Embassies attended:
The Kurdistan Region is an autonomous region in federal Iraq. It borders Syria to the west, Iran to the East and Turkey to the north. Iraq’s Constitution recognises the democratically elected Kurdistan Regional Government, the Kurdistan Parliament and the Peshmerga guard as the legitimate regional forces.
Iraq’s GDP was $112 billion in 2009 (this is the figure at purchasing power parity. GDP at the official exchange rate was $71 billion). Iraq’s economy is expected to grow by an estimated 7.3% in 2010, 7.9% in 2011 and at similar rates for the next few years. This is above the average projected growth for the Middle East.
A liberal foreign investment law was ratified in 2006, with incentives for foreign investors such as the possibility of owning land, up to 10-year tax breaks and repatriation of profits.
Kurdistan has attracted more than 12 billion US dollars (8.3 billion pounds) from local and foreign investors in non-oil sectors over the last three-and-a-half years, mainly in housing, agriculture and banking.
Foreign companies have invested around $3.1 billion from August 2006 to April this year. The largest foreign investors in terms of money were from Kuwait and Lebanon.
Investment from Iraqi national companies was about $8.7 billion during the same period. Joint ventures accounted for around $664 million.
Top areas of investment since 2006 are: public and high-income housing (nearly $4.8 billion); banking ($2.29 billion); industry ($1.6 billion) and tourism ($1.3 billion).
Oil and Gas Investment
The investment figures above do not include the oil sector, where 35 oil and gas firms from 17 countries have struck production-sharing agreements. These include Austria’s OMV, the Korean National Oil Corporation, India’s Reliance, Channel Islands-based Heritage Oil, Canada’s Talisman and the US’s Hunt. Norway’s DNO and Turkey’s Genel Enerji are already producing oil from their discoveries.
The Kurdistan Region is also developing gas following the UAE consortium Dana Gas and Crescent Petroleum reappraisal of the Khor Mor gas field in 2008. The field, which is expected to produce 8.5 million cubic metres per day in later phases, now feeds two power plants that together produce 1,250 megawatts of electricity to meet Kurdistan’s growing power needs. The nearby field of Chemchemal may hold gas reserves of 6.2 billion cubic metres.
There are 1,200 foreign companies working in Kurdistan including: Byblos bank of Lebanon; National Real Estate of Kuwait; Forbes & Manhattan of the United States – a privately funded investment company; Coca Cola; Pepsi Cola; ArcelorMittal; Lafarge; and Rotana.