By Tavish Scott, Member of the Scottish Parliament.
This article was originally published by The Scotsman, and is re-published here with the author’s permission. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.
A familiar face walked across the hotel lobby. Former BP boss Tony Hayward was deep in conversation as Erbil’s Rotana Hotel hosted Kurdistan’s first international oil and gas conference.
The capital of the northern semi-autonomous region of Iraq was buzzing with activity. Kurdistan is the new Saudi Arabia with the fourth-largest oil reserves on the planet and Erbil could be like Aberdeen in the 1970s, albeit without the sea and the harbour and with sand storms replacing easterly wind and sea harr.
The Erbil conference was party to a massive exploration deal signed between the American giant Exxon Mobil and the Kurdistan regional government. But the Baghdad federal government is not happy as they would rather control all the oil and gas developments across Iraq. The Kurds are safe, attractive to do business with and do not want to be held back by the stultifying bureaucracy and delay of Baghdad’s green zone.
Erbil and wider Kurdistan have been mercifully free of kidnappings, road-side bombs and killings since 2007. It feels safe to walk and drive around despite the obvious security, bag checks and police who are present at all major buildings. Drilling for oil in Kurdistan is therefore easier than across the regional border so Exxon Mobil will be followed by other multi-national oil and gas exploration companies. UK interest is considerable, with £3 billion of investment in the past six months alone. Aberdeen headquartered Wood Group have a presence and other export-orientated Scottish service companies will assuredly follow.
I visited the Kurdistan parliament, met the Speaker and discussed where the industry would take politics. The devolved government’s budget has grown from $100 million to $11bn in nine years. Oil and gas revenues operate under a precise formula laid down in the federal constitution and will add a further $2bn to the Kurdistan budget in the next year.