Aberdeen City Council has announced a new initiative to encourage North-east companies to explore business opportunities in Iraq.
Upper Quartile, an Edinburgh-based economic development consultancy, will manage the programme, which will target the oil and gas sector, academic institutions and other contractors.
Seminars will be held over the coming months to inform firms of the economic, political and security issues they need to consider before developing a presence in Iraq. Companies will be invited to attend meetings with Upper Quartile’s experts and get the chance to meet key officials from Scotland and Iraq.
Iraq produces two million barrels of oil per day and aims to increase to 12 million within seven years to propel them to second place among the world’s oil-producing nations. Capital spending in oil-field services in 2011 is estimated to be five times that of Saudi Arabia, Bahrain, the United Arab Emirates, Oman, Qatar and Kuwait combined.
In 2010, foreign firms and investors reported over $42 billion in investments, service contracts and commercial activities across Iraq – up almost 50% on 2009. The top sector was new housing, which accounted for 33% of all foreign commercial activity in 2010, followed by transportation infrastructure, electricity and industry, and oil and gas production. Contracts on offer are expected to push the oil services market to $8 billion by 2014.
Aberdeen City Council Enterprise, Planning and Infrastructure director Gordon McIntosh said: “Aberdeen-based companies have a long history of innovation in the oil and gas business and of developing oil and gas production abroad. Their unrivalled experience, therefore, coupled with committed investment can play an important part in rebuilding an economy, whilst also offering profitable business opportunities in the medium and long term.”
Gavin Jones, co-founder and managing director of Upper Quartile, said: “Iraq possesses vast hydrocarbon reserves, but it lacks the infrastructure and expertise to support large-scale commercial extraction and export. It is therefore an ideal time for established Scottish companies to use their skills to help unlock the country’s enormous potential.”
Iraq’s business marketplace remains in post-conflict phase, characterised by few entrants and risk aversion, but companies which can build relationships with senior Iraqis can expect significant rewards.
Iraq has 16 oil sector companies. Oil exports account for 96% of the country’s economy and in the first seven months of this year Iraq earned more than $48bn in revenue.
Production is set to increase substantially over the next few years. In the short term, however, infrastructure is unable to support this growth and Iraq needs to invest in its export terminals, ports, ageing pipelines, storage capacity, and water and power supplies.
For further information on Aberdeen City Council’s new initiative visit http://www.aberdeencity.gov.uk/iti