Basra Council – the political authority for Iraq’s economic capital – has announced that it is in the process of establishing Basra Company, to attract foreign direct investment in key sectors, including oil, gas and infrastructure.
Speaking at the Basra Oil, Gas and Infrastruture Conference, officials from Basra Council and Basra Governorate announced plans to develop under-utilised and degraded oil and gas fields, as well as a range of new infrastructure projects.
Basra Governorate is home to 70% of Iraq proven gas reserves, estimated at almost 112tn cubic feet – the 12th largest in the world according to the US Energy Information Administration (EIA). Basra also contains 59% of the Iraq oil reserves.
However, the condition of many of the fields has suffered as a result of years of sanctions and war. Political authorities are now looking to open the regional oil and gas sector for development.
“We believe that the provincial government has a significant role to play in stimulating the local economy. Basra Company will be established in line with the constitution, federal laws and policy of the Federal Government of Iraq,” Ali Al Faris, Chairman of Oil and Gas Committee at Basra Council said.
“Basra Company is the vehicle through which the provincial government will optimise utilisation of resources and position Basra as the economic engine of Iraq,” he said.
“We will be looking to work with international businesses that are capable of developing oil and gas fields which are not covered under current licensing, as well as cooperating with the federal government to improve production, refineries, and transport. The company will also work on investment in other key sectors including water, electricity, education, heath, agriculture, and transport,” he said.
The Federal Government of Iraq is currently in the process of awarding development contracts for the Zubair, Rumaila (north and south), West Qurna, Majnoon and Siba fields, in addition to fields in Maysan Governorate.
Other fields already under the supervision of the Federal Government include Al-lahis, Nahur Umr, Ratawi, Toba, Suba, and Sinbad fields.
Many of these fields have suffered from neglect, leading to low productivity. Current operators have limited capabilities to maximise their potential, providing opportunities for partnership and development.
The Basra Company is tasked to attract global players and investors to bring new and extant fields up to international best standards.
“We are looking to work with legal consultants to develop best practice legislation, as well as technical, financial and business firms to work on feasibility studies, geological surveys and other areas central to the success of the company,” Faris said.
On the subject of whether Basra Company will be a publicly-owned enterprise or will be set up on a Public-Private Partnership (PPP) model, Faris said: “We are studying a range of options for financing, including partnerships with local and international investors to finance the projects of Basra Company, which could be wholly owned by the council or in partnership with South Oil Company, South Gas Company as well as other local companies.
“An IPO (Initial Public Offering) is also being considered to allow Basrawis to own shares in the company,” he revealed.
