Why Iraq? | Iraq Business News Marketing

“According to the IMF, Iraq is projected to grow faster than China in the next two years. Now, let me repeat that, because when I read it I said, okay, are you sure because we always think of China as being the juggernaut? But no, indeed, Iraq is projected to grow faster than China … Iraq has one of the largest customer bases in the entire Arab world. It has one of the world’s largest supplies of oil, and it has one of the best educated workforces in the region.“

US Secretary of State, Hillary Rodham Clinton in 2011.
IMF Financial Predictions

The Iraq Development Plan

‘Our Five Year National Development Plan for 2010-2014 targets economic growth of 9.4% per year. The plan includes more than 2,700 projects worth up to US$186 billion. In the industrial sector alone, US$10.7 billion of projects are planned to support the reconstruction effort and a third of the country’s 2010 budget expenditure of US$72.1 billion is earmarked for capital projects.

Indeed, the country’s infrastructure needs are enormous and as part of the Government’s commitment to diversifying the economy away from oil; housing, infrastructure renewal, industry, manufacturing, agriculture, food processing, transportation, financial services and tourism are among the many areas in Iraq steadily opening up. The sky is the limit for investors.’

Dr. Sami Al-Araji, Chairman of the National Investment Commission writing in ‘The New Iraq 2011’

Iraq: the coming oil boom

The problems facing companies wanting to do business in Iraq are myriad, but the country's promise – as one of the world's leading oil and gas producers – makes such short-term hurdles a price worth paying.

It is just as well that international oil companies are among the most risk-tolerant in the business world, because Iraq carries no shortage of hazards. But oil majors will not be easily scared off reserves the size of those in Iraq: last year the country's government announced it was sitting on an estimated 143 billion barrels, some of the largest reserves in the world. Iraq says it intends to be pumping out an audacious 13 million barrels per day (bpd) within the next seven years, which would surpass Saudi Arabian production levels and more than quadruple current levels.

There are, of course, significant internal hurdles to be crossed before Iraq is able to bring oil to the international market in substantial quantities: the country's now infamous Hydrocarbon Law, drafted in 2007, has still to be passed; disagreement between the Kurdish regional government and the central Iraqi government over oil rights remains potent; and any Iraqi efforts to thrive on its oil production are hostage to its ability to export. Security issues and corruption concerns cast a long shadow.

The stakes are high – Iraq’s future hinges most of all on how it handles its natural wealth, with oil accounting for more than 40% of Iraq’s GDP and 90% of government revenues. There is no guarantee of success, but with a fourth round of licenses set to offered and gas exploration gearing up, an Iraq that would not only be self-sufficient in gas but also be among the world’s top oil exporters is a prospect, however yet distant, worth preparing for.

Courtney Fingar
Editor, fDi Magazine