DLA Piper, the global law firm, has advised on a major deal in Iraq, to create a specialised oil and gas free zone. The firm acted on behalf of Basra International Oil and Gas Hub (BIOGH) on a joint venture agreement with the Iraqi Free Zone Authority, a unit of the Ministry of Finance.
The project will see the development of 11 million square meters of land at the port of Khor Al-Zubair, near Basra, approximately six times the size of Dubai's Down Town development.
BIOGH, a privately owned company, will work closely with the Free Zone Authority to provide a number of benefits and incentives for the international oil and gas sector including tax exemptions for the term of the agreement as well as customs and employment benefits.
This is the first deal of its kind in Iraq and the second largest oil and gas free zone in the world. It is expected to create around 15,000 jobs, 60 per cent of which will be for local Iraqis. The development aims to create the logistical support for the services needed by the international oil and gas sector.
"The completion of this deal marks the beginning of an exciting stage in Iraq's development and ensures the country is significantly closer to having a sustainable economy based on establishing an in-country supply chain for servicing the requirements of the oil and gas sector," commented Abdul Aziz Al-Yaqout, Regional Managing Partner, DLA Piper Middle East LLP.
"As well as job creation, this deal will bring a stream of inward investment to Iraq. As the third largest oil producer in the world, Iraq is a key market and we hope this deal is the catalyst needed to further jump start the economy."