UAE Firms Weighing Up Iraqi Oil Industry

Energy companies from the UAE are interested in investing as Iraq’s oil and natural-gas industries, a government official said.

“There are indications that the UAE will have a place in the petroleum and energy sector,” Abdullah Ibrahim Al Shehi, the country’s ambassador to Iraq, said on Monday at a gathering of diplomatic officials in Abu Dhabi.

Mubadala Development Co, the Abu Dhabi government-owned investor, is among companies that may be interested in expanding to Iraq, Al Shehi said. There is about $5 billion worth of bilateral trade between the UAE and Iraq, and that value is expected to increase to $7 billion next year, he said.

UAE property companies and airlines are looking to Iraq as a market for expansion. Ethidad Airways of Abu Dhabi started flights to Baghdad in April, and Dubai-based Emirates, the Middle East’s largest airline, plans to start flights to Baghdad this Year. Budget carrier FlyDubai travels to northern Iraq.

Abu Dhabi property developer Bloom signed a $12.5 billion [14.6 trillion Iraqi dinars] contract in March for a housing project west of Baghdad. Dana Gas, based in the UAE emirate of Sharjah, produces fuel in northern Iraq’s semi-autonomous Kurdish region.

Iraq, seeking to boost oil and gas output, held two bidding rounds last year to auction rights to develop hydrocarbon deposits. The country is planning a third round for three gas areas this year.

UAE companies previously wanted to invest in Iraq’s oil industry and lost out as other international firms won development rights, Al Shehi said. No U.A.E. companies qualified to bid in Iraq’s first two auctions last year, according to data from the Iraqi government.

Mubadala, which has exploration and production assets in Kazakhstan and Thailand, has joint ventures in the U.A.E. and Bahrain with U.S. producer Occidental Petroleum Corp., a partner to develop the Zubair oil field in Iraq. The Los Angeles-based company may sell part of its stake in the deposit to the Abu Dhabi investment arm, Chief Executive Officer Ray Irani said in October.

Petromal, an oil and gas explorer funded by members of Abu Dhabi’s ruling family, aimed to bid for Iraqi assets in auctions last year along with partner Premier Oil, the U.A.E. company’s CEO Radhwan Al Saadi said in an interview in Feb. 2009. Neither company qualified to bid in the auctions last year.

(Source: Arabian Business)

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