Our Iraq profile this month leads with an exclusive interview with Basra’s British Consul-General Debbie Tomlinson
For all its problems, Iraq has been in the ascendancy this year, powered by record oil exports from Basra.
On page 48, Iraq’s Ambassador to Austria Dr Surooj Najib tells us about the country’s progress. We have logistics insights and an essential security update from page 50.
To lead our Iraq profile, we spoke to HM Consul General for Basra Debbie Tomlinson, about the role of British companies in Iraq’s upstream development and the challenges ahead.
Tomlinson was previously stationed in Kabul, Afghanistan, and has held diplomatic positions in the Balkans, Europe, SE Asia, Congo, and has been in post in Basra for two months.
What can the consulate do for companies entering Basra?
We offer ease of contact with the Governor, Head of the Basra Investment Commission and members of the Provincial Council, all of which are very important to understanding how to succeed in the province.
We can also offer an appraisal of the current political and security situation, and have a wealth of practical information on preparing to do business here. We can put British companies in touch with security providers, some of which provide a business solution.
We have worked in partnership with the Iraq British Business Council in London to promote business opportunities between UK and Iraq, and would strongly recommend that British companies speak to them (www.webuildiraq.org/).
What are the latest developments in the province?
We are seeing continuing improvement in the security situation in Basra, though we are not advocating a lower security profile yet for ourselves.
In April, the IBBC invited a high level Basrawi delegation, including the Governor to the UK, where they received a frank summary of the challenges of the business environment in Iraq, including well known visa issues, letters of credit, certificates of origin and other bureaucratic hurdles.
We’re working to promote British businesses and overcome the hurdles and there has been some progress already.
British companies are involved in the extraction and production of around half of Iraq’s oil, providing 10,000 jobs for Iraqis. One example is the engineering firm Mott MacDonald, which has been here for over 10 years and has over 1,000 jobs under its belt here.
Article continues on next page …
What would you tell a new business to Basra to expect, and what tips can you give?
Firstly, I recommend that British citizens who come here on business let us know they are here. Adequate insurance cover is a must.
The security overhead is still there, and it can make it difficult for smaller firms who want to explore the business environment here, but find it difficult to deal with the costs of arranging security over a few days.
The problem is that security as an upfront cost of entry, might deter some companies. New businesses will have to be realistic about the challenges. I’d advise companies to get a security assessment first, and access our information. We have excellent access to the provincial governor and council, and are here to help.
Corruption is still very much out there, and is often an expectation, such as facilitation payments, which are not allowed under UK anti-bribery law. There are also other issues that can hinder British business. For example, the documentation for tenders can be very brief – too brief to submit a tender if you don’t already know what’s going on – and is in Arabic.
Ministry procurement processes can be chaotic.
There can also be surprises. It is not unusual for foreign companies to be required to sub-contract exclusively to Iraqi-owned companies and this may not always be clear at the outset.
So there are real difficulties, but these should be seen in context. Basra and the South of Iraq have massive potential. Oil wealth is increasing rapidly and will fund massive infrastructure projects. The Iraqi economy is one of the fastest growing in the world and will come to rival the Gulf states in size and wealth.
What’s the outlook for upstream oil and gas companies?
There’s a lot of competition, and we are keen to ensure British companies play their part. There is a window of opportunity, and the possibilities for British companies in the province are enormous, but that window will close if British companies wait to be the last in. Now is the time.
Facts:
– 924k Iraq’s refining capacity (barrels a day). BP Statistical Energy Review 2012
– 143 bn Iraq’s proven oil reserves (barrels). BP Statistical Energy Review 2012
– 2.45m Iraq’s oil exports in May. Source: Iraq’s State Oil Marketing Organisation
