Kurdistan region - global energy playerThanks to joe33 on the WZR board for this post!
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Successful trade and investment conference confirms Kurdistan Region as global energy player
TheKurdistan Region of Iraq’s international trade conference is proclaimeda success as potential investors welcome the strongest news yet onimpending oil flows from the Region – and look to seize the widerinvestment opportunities available in other sectors.
The eventon June 15th and 16th was hosted in the City of London by the KurdistanRegional Government UK Representation with Prime Minister Barham Salihthe keynote speaker, and attended by over 500 delegates includingpotential investors representing international businesses from 26countries, and diplomats from 12 countries.
Prime MinisterSalih declared that the fine detail on international oil contractswould soon be ironed out between the Kurdistan Regional Government andBaghdad, and oil revenues would start flowing into the country again onan increasingly large scale.
Minister for Natural Resources,Ashti Hawrami stated that the Region will have pipeline capacity tocarry 100million barrels per day within 15months, will be a netexporter of oil within two years, and will actually be pumping100million barrels per day out of the ground within four years.
Britishgovernment ministers joined delegates in heralding the conference asuccess and welcoming the opportunities it has created.
Speakingat the conference, Alistair Burt, UK Foreign Office Minister for theMiddle East, welcomed the “great opportunity for British businesses tobuild strong commercial links between the UK and the Kurdistan Region”.
Also speaking at the conference, UK Trade and InvestmentMinister Baroness Wilcox said: "The Iraqi Kurdistan region is a gatewayfor British companies looking to establish a foothold in Iraq. TheIraqi Kurdistan region offers huge potential across a range of sectorsfor British companies that want to secure a share of this emergingmarket."
Paul Brunet, Atlantic Oil Field Services, said: “Weare already active in the Kurdistan Region, so we appreciate the stableand secure business environment it offers. News of progress inagreement between Baghdad and Erbil regarding oil revenue-sharing is tobe warmly welcomed. This will surely be instrumental in stimulating theRegion’s ongoing development.”
Chris Frost, Partner atPriceWaterhouseCoopers, said: “This event has presented greatopportunities to renew existing relationships and build new ones.PriceWaterhouseCoopers are delighted to let people know about ouroffice in Erbil, and we’re keen to help facilitate further investmentin this exciting and dynamic Region.”
Stephan John, People1st, said: “This conference has been tremendously successful indemonstrating the breadth of investment opportunities the KurdistanRegion has on offer – not just in the oil and natural gas sectors, butin areas as diverse as education, telecoms, agriculture and finance.We are working to develop higher and vocational education in the Region– something we see a fundamental to its long-term development. We havebeen extremely impressed by both the ambition of the Region, and thestrides it has made so far.”
Pasquale Cataldo, BusinessManager at New Holland Agriculture – part of the Fiat Group – said:“This conference has been a huge success, and made clear that theeconomic regeneration of the Kurdistan Region is no distant dream –rather, an exciting reality. The opportunities are expansive and theterritory favourable. The Kurdistan Region has a promising economicfuture ahead.”
International companies represented a range of critical sectors at the event, including:
· Banking & finance: HSBC, Credit Suisse, the Trade Bank of Iraq, Standard Chartered Bank, Forbes & Manhattan
· Consumer: Pepsico
· Construction: Lafarge, Caterpillar
· Defence & aerospace: Aegis, BAE Systems, Lufthansa
· Oil & gas: Shell, GE International, Heritage Oil, Genel Enerji, Korea National Oil Corporation
· Professional services: PriceWaterhouseCoopers, Norton Rose, DLA Piper, YouGov
· Telecoms: Asiacell, Motorola, Korek Telecom
Representatives from the following Embassies attended:
· Czech Republic
· Germany
· Hungary
· Islamic Republic of Iran
· Kuwait
· Poland
· Spain
· Republic of Slovenia
· Republic of Turkey
· Russia
· USA
· Catalonia
About Kurdistan
TheKurdistan Region is an autonomous region in federal Iraq. It bordersSyria to the west, Iran to the East and Turkey to the north. Iraq’sConstitution recognises the democratically elected Kurdistan RegionalGovernment, the Kurdistan Parliament and the Peshmerga guard as thelegitimate regional forces.
Economy
Iraq’s GDP was$112 billion in 2009 (this is the figure at purchasing power parity.GDP at the official exchange rate was $71 billion). Iraq’s economy isexpected to grow by an estimated 7.3% in 2010, 7.9% in 2011 and atsimilar rates for the next few years. This is above the averageprojected growth for the Middle East.
General Investment
Aliberal foreign investment law was ratified in 2006, with incentivesfor foreign investors such as the possibility of owning land, up to10-year tax breaks and repatriation of profits.
Kurdistan hasattracted more than 12 billion US dollars (8.3 billion pounds) fromlocal and foreign investors in non-oil sectors over the lastthree-and-a-half years, mainly in housing, agriculture and banking.
Foreigncompanies have invested around $3.1 billion from August 2006 to Aprilthis year. The largest foreign investors in terms of money were fromKuwait and Lebanon.
Investment from Iraqi national companieswas about $8.7 billion during the same period. Joint ventures accountedfor around $664 million.
Top areas of investment since 2006are: public and high-income housing (nearly $4.8 billion); banking($2.29 billion); industry ($1.6 billion) and tourism ($1.3 billion).
Oil and Gas Investment
Theinvestment figures above do not include the oil sector, where 35 oiland gas firms from 17 countries have struck production-sharingagreements. These include Austria’s OMV, the Korean National OilCorporation, India’s Reliance, Channel Islands-based Heritage Oil,Canada’s Talisman and the US’s Hunt. Norway's DNO and Turkey's GenelEnerji are already producing oil from their discoveries.
TheKurdistan Region is also developing gas following the UAE consortiumDana Gas and Crescent Petroleum reappraisal of the Khor Mor gas fieldin 2008. The field, which is expected to produce 8.5 million cubicmetres per day in later phases, now feeds two power plants thattogether produce 1,250 megawatts of electricity to meet Kurdistan’sgrowing power needs. The nearby field of Chemchemal may hold gasreserves of 6.2 billion cubic metres.
Case studies
Thereare 1,200 foreign companies working in Kurdistan including: Byblos bankof Lebanon; National Real Estate of Kuwait; Forbes & Manhattan ofthe United States – a privately funded investment company; Coca Cola;Pepsi Cola; ArcelorMittal; Lafarge; and Rotana.