The Basra Council – the political authority for Iraq’s economic capital Basra – is looking to invest up to $800mn for developing the region’s oil and gas sector, according to a senior official.
“Initially, we expect that we will be looking at investments of $100mn at the low end – going up to $700mn or even $800mn,” Ali Al Fares, chairman of Oil and Gas Committee at Basra Council, exclusively told araboianoilandgas.com.
The Basra Council had last month announced that it is in the process of establishing Basra Company, a regional development body charged with boosting the economy in the Governorate, through the attraction of foreign direct investment in key sectors, including oil, gas and infrastructure.
“We don’t have an official figure at the moment. However, the size of the investment will depend on the appetite of investors who wish to partner with us,” Faris said.
“Economic and financial feasible studies will have a key role to play in predicting the size of the financial investments Basra Company requires to achieve its desired goals,” he added.
The Basra Governorate is home to 70% of Iraq’s 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 deteriorated as a result of years of sanctions and war.
Iraqi political authorities are now looking to open up the region to international businesses for development, the security situation having improved in recent years.
Faris mentioned that that Basra Council is considering 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 and South Gas Company, as well as other local companies.”
An IPO (Initial Public Offering; for the stock market) is also being considered to allow ‘Basrawis’ to own shares in the company, he revealed.
