A Preliminary Look at 2012 Foreign Commercial Activity

By Jared Levy, Senior Middle East Analyst at Dunia Frontier Consultants.

Dunia Frontier Consultants tracks foreign commercial activity (FCA) in Iraq, defined as investments, service contracts or any other form of commercial activity undertaken by non-Iraqi companies inside Iraq. An analysis of this data is undertaken annually in Dunia Frontier’s end-of-year Foreign Commercial Activity in Iraq report, downloadable for free on the Dunia website.

This blog post provides a preliminary look at FCA over the first seven months of 2012. Total deal numbers are broken down by sector, country of origin, and geographic distribution of commercial activity. It should be noted that the data presented here has not been subjected to the rigorous vetting and valuation process undertaken in the annual Foreign Commercial Activity in Iraq reports. As such, analysis is focused on the number of deals, as opposed to monetary value.

To date, 176 deals have been recorded in 2012, for an average of just over 25 deals/month. Extrapolated over a 12 month period, this would total 302 deals, or a 2% increase from 2011. In terms of number of deals, this represents a marked leveling of the curve, as 2011 saw a 40% increase in number of deals from 2010.

As demonstrated by the above table, MNCs operating in Iraq are heavily focused on oil and gas and electricity. This comes as no surprise. Both the central government, through the Ministry of Oil, and the Kurdistan Regional Government, through its Ministry of Natural Resources, continue to look to IOCs to develop their respective carbon resources.

Additionally, both the central government and the KRG continue to enlist foreign firms to enhance their electrical output, with numerous American, European and Asian companies constructing new power plants, as well as providing technological support to the central government’s and KRG’s Ministries of Electricity and local companies.

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