oil firms interested to invest in Iraq

Khaleej Times reported on July 31 that International oil companies have shown “serious willingness” to help develop Iraq’s oil industry, the country’s oil minister said on Sunday after a trip to the United States.

Speaking before parliament to discuss the United Nations plan for an “International Compact” to develop the Iraqi economy, Hussein Shahristani said he met with several international oil companies, though the country’s new investment legislation would not allow them to invest in upstream activities.

“Most of the companies have shown a serious willingess to help and to work with Iraqi oil companies and on their own” to develop the industry, he said.

“We are hoping the International Compact will give a chance to many more companies to come and cooperate with us to develop Iraq’s oil fields.”

Shahristani also described a pair of laws that were now before parliament to boost the sector, including the long-awaited Iraqi investment law.

“This law will allow the domestic and international private sector to invest in all fields of oil production, except for exploration and drilling for crude oil,” he said. “These areas are reserved for the Iraqi state.”

He added that the private sector could be involved in downstream activities such as refineries and distribution of refined products, as well as petrochemicals.

Under the previous regime of Saddam Hussein, Iraq’s massive oil reserves — among the largest in the world — were off limits to foreign investors.

Despite the plentiful oil reserves, a lack of refining capacity and persistent pipeline sabotage and pervasive corruption mean that Iraqis wait in long lines for gasoline.

Shahristani said moves were under way to expand the countries from which Iraq imports finished products, particularly from the ”east” — suggesting Iran — following the disruption of imports from Turkey and the Mediterranean.

A second law before parliament will allow the private sector to import finished products and operate gas stations.

Currently the government produces 10 million liters a day and imports another seven million liters, well short of an estimated daily demand of 22 million liters.