Iraq’s oil wealth is massive, with significant economic potential for years to come. Unfortunately, development is being hampered by endemic violence and ongoing instability. However, the main reserves are not evenly distributed around the country and neither is the violence. By avoiding the violent hotspots companies can still make significant profits with minimal exposure to the risks posed by militancy and political upheaval. Instead of being deterred by regular headlines of death and destruction, companies should take a closer look at the country to assess exactly where the risk lies, and where the opportunities abound.

Some parts of the country have oil paucity and extensive violence. Anbar province, for example, has comparatively few hydrocarbon reserves, yet it sees attacks on an almost daily basis. On the other hand, some areas such as provinces in the south or those administered by the Kurdish Regional Government in the north, have extensive reserves and see virtually no violence.

Frequency of Attacks by Province - Q2 2011

The South

By comparing the oil wealth of each province with the number of attacks it sees on a regular basis, it would appear that Maysan province in the south of the country could be a particularly attractive investment location. Accounting for over 7% of the country’s oil wealth the province suffered less than 1% of all countrywide attacks recorded in the second quarter of 2011 (April – June). Neighbouring Basrah province saw between 2-3 attacks every week over the period, but with more than half of the country’s oil reserves it is no surprise that energy firms and numerous service companies are still flocking to the province and its significant potential.

The North

Kurdistan in the north of the country is more of an established investment hotspot. As previously documented, conditions are very stable in the autonomous region, which accounts for at least 3% of the country’s oil, and more of its gas reserves. Conversely, the adjacent northern provinces of Ninawa and Ta’mim have over 15% of the country’s oil reserves between them, yet they experienced a quarter of the country’s violence in the second quarter. Ta’mim province currently sees an average of around eight attacks per week, while Ninawa province sees up to 12 and more so upstream oil and gas activity could be seen as more of a gamble in these areas. Companies operating here will have to take extensive measures to protect their assets and personnel – although business is certainly still possible in the two provinces.

Baghdad

Conditions seem even more punishing in the capital, which suffered more than 40% of all attacks recorded between April and June. The wider province accounts for just under 6% of the country’s oil reserves, and the violence must seem a daunting challenge to those looking to do business in the city. Nonetheless, Baghdad still houses the embassies and main political decision making bodies of the government, all of whom are involved in the oil and gas industry. Occasional trips at least will be required by companies looking to work in the country’s most important economic sector.

Baghdad at Sunset

To reassure those that must, it is still perfectly possible to do business in the capital, and indeed all of the parts of the country which still see regular violence. With proper security procedures companies are able to overcome the many security obstacles presented in the country. Indeed industry considerations aside Baghdad remains a favourite destination of this author, who even without a military background, is still able to travel around the city in relative security.

John Drake is a senior risk consultant with AKE, a British private security firm working in Iraq from before 2003. Further details on the company can be found here, and you can obtain a free trial of AKE’s intelligence reports here.

AKE will be exhibiting at Offshore Europe in Aberdeen between the 6^th and 8^th September. Feel free to visit stand 5C110 where you can meet the author. If you would like to register to attend as an AKE guest for free please complete your details here.

Faruk Group Holding, a group of companies with a diversified range of interests including telecommunications, cement manufacturing, hotels, medical services, properties, construction and IT, recently announced the upcoming launch of the first international boutique hotel, Copthorne Hotel, Baranan in Sulaymaniyah, Iraq.

The Copthorne Hotel Baranan is a four-star hotel located in the tourist district of Sulaymaniyah. Built on a site covering 1,320 m2, it has a floor area of 9,198 m2. The seven-storey hotel offers a contemporary setting with 72 guest rooms, 6 suites, 8 service rooms and 7 elevators. Amenities include meeting rooms, an all day dining restaurant, an Italian restaurant, a cigar bar and a Duplex Entertainment Center.

Commenting on the occasion, Mr. Faruk Mustafa Rasool, Chairman of Faruk Group Holding said:

“The development of the hospitality sector is an important factor as Faruk Group Holding has always been in the forefront of our country’s development. Launching Copthorne Hotel is another step in our strategic expansion plans as Iraq’s largest and most respected private company.”

Faruk Group Holding continues to invest in the hospitality sector to attract more visitors to Sulaymaniyah and provide international quality accommodation for guests and tourists from all over the world; as well as corporate clients, exhibition delegates, and other business and leisure visitors.

Faruk Group Holding created Asiacell, the largest Iraqi private company, the first and only mobile company covering all of Iraq’s 18 governorates.

The average weekly number of attacks has risen in Iraq over the last two months. Conditions gradually worsened in the first five months of the year, and while the increase in attacks has not been dramatic, it is nonetheless still a concern, particularly as the US prepares to withdraw its military by the end of the year. However, with careful planning companies can still overcome the obstacle of security in Iraq. For a start, violence is highly concentrated, with some areas barely being affected at all.

The Capital

Militant attacks have been most concentrated in Baghdad over the past eight weeks. The city accounted for over 40 per cent of all incidents and is currently over three times more hostile than the next two dangerous cities (Mosul and Kirkuk). However, while it may see more violence than anywhere else in the country, it nonetheless has a number of advantages. For a start, it has numerous ‘safe havens’ or areas where personnel can seek assistance in the event of an incident. It has more security force checkpoints, better hospital facilities and a number of well-patrolled districts which see virtually no violence at all. Foreign firms looking to do business in the capital have a range of options when considering places to arrange meetings or even set up a permanent presence – and their choices are certainly not limited to the Green Zone. There are several districts in the so-called Red Zone that see far fewer incidents on a yearly basis than the heavily fortified city centre.

Levels of Violence by Province - the last 8 weeks

The North

The next two most violent provinces over the last eight weeks were Ninawa and Ta’mim, situated in the north of the country. Each province accounted for 13 per cent of all countrywide attacks, with most of the incidents concentrated in the cities of Mosul and Kirkuk. Recent months have seen a very gradual improvement in security conditions in Mosul, as well-established terrorist organisations have been tackled in a slow and bitter war of attrition with the Iraqi security forces. Kirkuk on the other hand has seen a slight worsening in conditions, with an increase in inter-communal tensions as different ethnic groups compete for influence in the oil-rich and historically contested city.

In sharp contrast to the rest of the country, the area administered by the Kurdish Regional Government has seen very little violence over recent weeks. Companies intent on doing business here have little need to worry about security. That is not to say that there are not other health and safety concerns of a political risk nature in the region. The province of Sulaymaniyah has seen a number of protests over recent weeks, and while most were peaceful, some involved low-level scuffles, arrests and even some vandalism, which is why the province appears on the AKE violence chart. Nonetheless, with only one per cent of all countrywide violence taking place in the province over the last eight weeks, it should still be seen as a stable and largely secure part of the country.

In general, unrest and protests have quietened over recent weeks, although conditions could still escalate over the coming weeks as temperatures rise and the government faces increased criticism for failing to address major public frustrations. Power shortages, poor services and high unemployment are likely to stoke further unrest in Iraq in the future.

Weekly Attacks in Iraq - the last 8 weeks

The Central Region

Apart from the capital, the province of Anbar has been the most hazardous part of the central region, accounting for nine per cent of all countrywide attacks over the last eight weeks. Most of the incidents have been concentrated in the east of the province, among urbanised areas such as Fallujah and Ramadi. The provinces of Diyala, Salah ad-Din and Babil each accounted for between four and five per cent and remain hazardous, albeit significantly more quiet than the earlier years of Iraq’s post-invasion history.

The South

The southern part of the country continues to avoid the majority of violent trends which affect central and more northern provinces. The last eight weeks have seen a scattering of incidents in the region, with Basrah province accounting for only three per cent of all countrywide incidents. Nonetheless, there are still no grounds for complacency and fairly robust security measures are still recommended by personnel operating in the area. An attack on an oil field earlier on 5 June indicates that violence is still a concern, and that the energy sector is still an attractive target for the militant groups operating in the region.

Tactics

Almost two-thirds of all countrywide attacks have involved explosive devices, while a quarter have involved firearms. The vast majority of explosive devices have been relatively small, usually incurring injuries rather than fatalities. Sticky bombs have been regularly used, particularly in Baghdad. Casualties have also usually been indiscriminate, with many of the victims being civilian bystanders caught up in attacks against police patrols or US military vehicles.

While the use of firearms in attacks has been much less frequent, it is perhaps a more sinister tactic, in that the victims are almost always singled out and monitored closely prior to an attack. Many of the victims have been senior members of the security forces or mid-level civic employees.

Iraqis targeted in kidnap and ransom incidents are also likely to have been singled out and monitored. Some are selected because of their rank, some because of their community, but most simply because their abductor believes their family will be able to raise money for a ransom. Counter-surveillance measures are therefore recommended for a wide range of individuals.

Indirect fire (rockets and mortars) only accounted for around seven per cent of all attacks, and most did not incur any casualties. Nonetheless, personnel still need to take the risk into account, particularly those using airports or staying on fortified military facilities such as the Green Zone. Indirect fire is most commonly used to target these types of asset, so they should not be considered entirely secure.

John Drake is a senior risk consultant with AKE, a British private security firm working in Iraq from before 2003. Further details on the company can be found here while AKE’s intelligence and political risk website Global IntAKE can be accessed here.

You can obtain a free trial of AKE’s intelligence reports here.
You can also follow John Drake on twitter here.

Overview

Levels of violence rose in Iraq last week to the highest level seen this year. The graph below indicates that there were over 70 major attacks recorded countrywide, the majority of which took place in Baghdad. There were several incidents also recorded in eastern Anbar province, a slight fall in the number of attacks in Mosul, a slight rise in the number of attacks in Kirkuk and a generally low number of incidents in the south of the country. Kurdistan saw ongoing protests in downtown Sulaymaniyah, but conditions were still relatively stable and quiet.

North

Kidnap in Iraq is an ongoing concern, especially in the north of the country. Four people were abducted in the provinces of Ninawa and Ta’mim over the past week, including two men who were later found dead. One of the other abductees was a child seized near Kirkuk who is likely to be held for a ransom. Children have been regularly targeted by opportunist criminals in Iraq over recent years. They are often easier to hold in captivity, while extended family members and even wider communities are often much more willing to provide the financial assistance to the child’s immediate family in order to pay the ransom. Given the comparative ease involved in kidnapping a child over an adult, the cruel tactic is likely to continue.

However, the Iraqi security forces are gradually improving their capability in the field of tackling the problem. The Iraqi army reportedly released three Turkish nationals in an operation near Kirkuk on 26 April. They had been held since 15 February and were reportedly beaten, threatened and given food only on alternate days during their captivity. At the time of their abduction a foreign national had not been seized in Iraq for over a year. Evidently companies still need to take the risk into consideration. Personnel of Arab, Kurdish or Turkish origin are no less at risk than nationals from more distant countries and there are no grounds for complacency when assessing security needs in Iraq.

Centre

Eastern Anbar province and Baghdad were particularly violent last week whereas the once hazardous provinces of Babil, Diyala and Salah ad-Din were quiet with very few incidents reported. The capital saw a considerable rise in assassination attempts, particularly in the down town area on the eastern bank of the River Tigris. Otherwise, however, incidents were scattered throughout the city, from the predominantly Shi’ah district of Sadr City in the east to the predominantly Sunni district of Amiriyah in the west. Most of the attacks were relatively small, but targeted, leaving several senior security force officers and mid-level civic employees dead and injured. As has been the case for a number of weeks, there was a higher than normal number of sticky bombs (UVIEDs) used in attacks.

South

For another week there were very few incidents reported in the south of the country. However, the US military was targeted once again by militants in the area, with two US soldiers reportedly killed in one incident, although details have not yet been fully revealed. The most frequent tactic affecting the US military in the region remains roadside explosive attacks. Personnel travelling high profile are most at risk of this kind of tactic. Otherwise, mortars continue to pose a concern, although they are gradually becoming less frequent.

John Drake is a senior risk consultant with AKE Group, a British private security firm working in Iraq from before 2003. Further details on the company can be found here.

You can obtain a free trial of AKE’s intelligence reports here while AKE’s Global Intake report on Iraq can also be obtained here.

You can also follow John Drake on twitter at www.twitter.com/johnfdrake

Overview

Levels of violence rose in Iraq last week, with a particular increase in the number of attacks targeting civic employees in Baghdad. There were also clusters of violence in the cities of Fallujah, Ramadi, Mosuk and Kirkuk, as well as in the north of Babil province. The south was relatively quiet, as was most of Kurdistan, with the exception of Arbil and Sulaymaniyah city centres, which saw rolling protests against the authorities.

Weekly Attacks in Iraq - the last 6 months

North

The Kurdish security forces arrested several people after clashes in downtown Sulaymaniyah over recent days. Clashes also took place in downtown Arbil, although the extent of the resultant damage and injuries has been contested by protest organisers and the Kurdish authorities. For the vast majority of people working in Kurdistan these protests will have only a limited impact on working conditions. Travel may be difficult in certain areas, such as around Saray Square in Sulaymaniyah but the overall stability of the regional government is not being threatened and any violence associated with the protests remains limited and largely reactive to security force intervention.

Elsewhere in the north, there are ongoing sporadic ethnic clashes taking place in and around Mosul and Kirkuk. Kidnap for ransom also remains a problem, with one Iraqi national released from captivity in southern Ta’mim province last week. He was unharmed but was freed for a reported US$30,000. So long as the ‘industry’ remains practical and profitable it will continue to pose a challenge to the authorities and a concern for Iraqis and foreigners alike.

Centre

There was a rise in levels of violence in the centre of the country last week, particularly in western Baghdad, eastern Anbar province and northern Babil province. Baghdad saw a series of attacks, predominantly in the west of the city, and especially in and around the district of Mansour. A lot of the attacks were targeted, rather than indiscriminate, and ministry employees, senior members of the security forces and other state employees constituted the majority of victims – as has been the case for several months. UVIEDs (sticky bombs) are a particular concern at present. Monday also saw a double suicide attack against a queue outside the western entrance to the International/Green Zone.

South

While there were several clusters of violence around Iraq last week, none of them were located in the south of the country. Roadside bombings targeting US military convoys continue to occur sporadically, but most do not cause casualties. Well defended facilities such as bases and airports also continue to suffer occasional mortar attacks, but the situation is otherwise a lot more calm than the centre and north of Iraq. Personnel still have to exercise caution when moving around in the region, and even when staying in facilities which could otherwise be considered ‘secure’ but at present the security environment is more benign in the south than many other parts of the country.

John Drake is a senior risk consultant with AKE Group, a British private security firm working in Iraq from before 2003. Further details on the company can be found at www.akegroup.com/iraq

You can obtain a free trial of AKE’s intelligence reports here http://www.akegroup.com/intelligence/trial-subscriptions.php

You can also follow John Drake on twitter at www.twitter.com/johnfdrake

www.akegroup.com/iraq

Overview

The past week has seen a slight drop in the number of violent attacks taking place in Iraq. Incidents were concentrated in Baghdad and in the districts west of the capital in Anbar province. Mosul also experienced a significant proportion of attacks, while even Sulaymaniyah in Kurdistan saw incidents of unrest and reported cross-border shelling by the Iranian military.

North

Last week saw continued violence in Mosul, with a series of roadside bombings, grenade throwing and shootings. Kirkuk also saw a spate of incidents with tensions currently rising between the city’s main ethnic groups.

Cross Border Shelling

In Kurdistan the Iranian military is reported to have shelled isolated mountainous parts of the border in northern Sulaymaniyah province. Cross-border military operations by Turkey and Iran have regularly increased from mid-March (often coinciding with the festival of Nowruz). Incidents are likely to increase in frequency over the coming months but the impact on the majority of people and businesses in Kurdistan will remain limited.

Kurdish Unrest

Demonstrations in Kurdistan turned violent in Sulaymaniyah and the town of Kalar last week. The ongoing unrest is not having a major impact on business activities in the area, except for offices located immediately adjacent to the areas of protestation. Unrest in the wider region continues to harm investor confidence. However, Iraq is increasingly being viewed as one of the more politically stable parts of the Middle East, and companies with proper crisis management procedures will be at much lower risk of business interruption, physical damage and harm.

Weekly Attacks in Iraq - the last 6 months

Central

Security measures were heightened in Salah ad-Din province over the last few days in the aftermath of a horrific assault on a government building in Tikrit. The province was largely quiet as a result of the increased police presence. Violence was instead concentrated in Baghdad and eastern Anbar province.

Baghdad

There was a fall in the number of targeted shootings in the capital, which is a welcome development after a spate of targeted attacks the previous week, but roadside bombings and UVIEDs (Under Vehicle Improvised Explosive Devices or ‘sticky bombs’) were still used in attacks against civic employees and members of the Iraqi security forces. The city also saw a sharp rise in the number of indirect fire attacks (rockets and mortars) which hit a number of buildings around the city centre.  This type of tactic can be fairly inaccurate but it is nonetheless potentially destructive, posing an almost indiscriminate risk to personnel throughout the city centre.

South

Indirect fire also remains a prevalent tactic in the south of the country, with US military bases suffering the brunt of such attacks. Local threat groups remain intent on discrediting the foreign military presence in the country and US military convoys are also at risk of being targeted in roadside bombings. At least one of the roadside explosive attacks against a US military convoy over recent days involved an Explosively Formed Projectile (EFP) weapon. These can be deadly for armoured vehicles, given that they can pierce hardened undersides. Low-profile civilian interests are less at risk of being targeted but the region should certainly not be considered ‘safe’.

www.akegroup.com/iraq

John Drake is a senior risk consultant with AKE Group, a British private security firm working in Iraq from before 2003. Further details on the company can be found at www.akegroup.com/iraq

You can obtain a free trial of AKE’s intelligence reports here http://www.akegroup.com/intelligence/trial-subscriptions.php

You can also follow John Drake on twitter at www.twitter.com/johnfdrake

Overview

Levels of violence crept up once again in Iraq last week. What is of concern is that this violence was attributed almost entirely to terrorists and militants, whereas recent weeks saw an increase in violence related to civil unrest. Protests subsided (to a degree) last week but more hostile elements, capable of inflicting far greater casualties, returned to the fore, conducting attacks in Mosul, Kirkuk, Baghdad and districts surrounding the capital in particular.

Weekly Attacks in Iraq - the last 6 months

North

That is not to say the week was not without violent protest. At least one violent demonstration occurred in Halabjah, in the Kurdish province of Sulaymaniyah. Overall the region remains safe for the vast majority of foreign personnel who travel there to work. However, the ongoing protests should be borne in mind as a concern nonetheless because they will likely continue to turn violent, leading to injuries, deaths, possible vandalism against private property as well as travel restrictions in the event that routes are closed and curfews are imposed by the authorities.

Elsewhere in the north violence remains concentrated in Mosul, although Kirkuk has seen a rise in violence over recent weeks as well. The Turkish military has also resumed its bombing of Kurdish terrorist outposts in the Qandil Mountains. This tends not to affect the majority of personnel in built up parts of the region, but it could lead to civilian casualties and damage to agricultural property over the course of the coming months.

Centre

Last week saw a rise in violence in Baghdad. Targeted killings appear to be on the increase once again, with senior members of the security forces and mid-level civic employees most likely to be singled out. Militants have been using roadside bombs, sticky bombs, and guns with silencers to carry out their work. Otherwise violent activity in the region has been concentrated in Fallujah district in Anbar province, as well as in western Diyala province.

South

Conditions in the south of the country remain comparatively quiet, although the US military continues to suffer roadside bombings against its high profile convoys, and rocket and mortar attacks against its fortified facilities. Personnel travelling low profile will be less at risk, while those staying in otherwise well-defended bases should bear in mind that they may have to take cover at short notice in the event of any further indirect fire.

John Drake is a senior risk consultant with AKE Group, a British private security firm working in Iraq from before 2003. Further details on the company can be found at www.akegroup.com/iraq

You can obtain a free trial of AKE’s intelligence reports here http://www.akegroup.com/intelligence/trial-subscriptions.php

You can also follow John Drake on twitter at www.twitter.com/johnfdrake

AKE ltd

Overview

Levels of violence fell in Iraq over the past week. This is the first time this has occurred so far this year. Protests were less violent than the preceding week while there was a drop in the number of terrorist attacks in all parts of the country except the capital. The contested city of Kirkuk also saw a decline in violence, although tensions are being raised in and around the city. Unless there is a concerted effort to mediate the situation, the city could see a significant escalation in violence this year.

Weekly Attacks in Iraq - the last 6 months

North

Tensions continue to rise around Kirkuk with rising Arab and Turkmen concerns that the Kurdish government is intent on annexing the city. Kurdish residents are advised to be wary of possible ethno-national attacks over the coming weeks, while similar reprisal attacks will also pose a concern for the non-Kurdish communities inhabiting the city. Regardless of who has rightful claim the situation will descend into violence if it is not addressed with mediation, community inclusion and the promise of development and economic investment in the oil-rich province. In Kurdistan protests are continuing, particularly in central Sulaymaniyah. Related violence declined last week, although thugs attacked a camp of demonstrators and a radio station office over the weekend. Most private businesses are not being targeted in the unrest and while security is a concern around large demonstrations, the majority of economic activities are continuing unaffected in the area.

Centre

The central provinces saw an overall decline in violence over the past week. There was a fall in the number of suicide attacks taking place which had a positive effect on casualty figures. The capital saw a slight rise in violence, with a particular increase in bomb attacks, but the majority of devices used were small, causing numerous injuries, but few fatalities. One issue of concern has been the repeated targeting of oil tankers in the city, with four such attacks over the past two weeks. Companies responsible for the transport of oil products should review their security procedures, particularly in Baghdad. The energy sector in general is advised to monitor the trend as the country may be witnessing a rise in the number of attacks on the oil and gas sector, as outlined here.

South

While the south remains quieter than the centre and north of the country it continues to suffer attacks. The majority of incidents target the US military, although bystanders are also implicated in the risk as well. Basrah was hit with its most substantial terrorist attack in four months when a roadside bomb killed six people and injured 12 on 6 March. It is believed that the bomb was targeting a US military vehicle as it passed through Maaqal district in the north of the city, but a delay in the detonation meant that a civilian vehicle bore the brunt of the impact. While local Shi’ah militia groups were likely responsible public criticism may nonetheless be directed at the US military and increase demands for a withdrawal of foreign troops sooner rather than later.

John Drake is a senior risk consultant with AKE Group, a British private security firm working in Iraq from before 2003. Further details on the company can be found here

You can obtain a free trial of AKE’s intelligence reports here

You can also follow John Drake on twitter at www.twitter.com/johnfdrake

AKE ltd