Iraq's Basra Province Launches Company to Attract Oil and Gas Investors

Iraq's southern province of Basra has established a new initiative to attract foreign direct investment to its oil and gas sector. The Basra Council  – the country's political authority for economic capital – has announced it will set up an investment vehicle company designed to attract international investors in key sectors including oil, gas, infrastructure, petrochemicals, and fertilizers. 

Speaking to Natural Gas Europe on the sidelines of the Basra Oil, Gas and Infrastructure Conference in Istanbul, Ali Al Faris, Chairman of the Oil and Gas Committee at Basra Council said the newly formed Basra Company will focus primarily on the oil and gas sector. 

"As a result of the economic depression, the slump in oil prices affected Iraq and Basra negatively," he said. "The Federal Government has empowered the councils to come up with plans to help fight these negative effects. We decided to launch the Basra Company to support the government [efforts]. The company will also work on investment in other key sectors including water, electricity, education, heath, agriculture, and transport."

The chairman also said that Basra Council has not yet mandated any financial, legal or geological advisory firms to meet its aims, but would welcome pitches from companies to do so. Basra Company will be established in line with the constitution, federal laws and policy of the Federal Government of Iraq. 

Iraq is currently in the process of awarding development contracts for the Az Zubair, Rumaila (north and south), West Qurna, Majnoon and Siba fields, in addition to other fields in the Maysan Governorate. Fields already under the supervision of the Federal Government include the Al-lahis, Nahur Umr, Ratawi, Toba, Suba, and Sinbad fields. Many of these fields have suffered from neglect, leading to low productivity. Basra Company will be responsible for managing and marketing these oil and gas fields.

The Basra Governorate is home to 70% of Iraq's proven gas reserves, estimated at almost 112 trillion cubic feet – the 12th largest in the world according to the U.S. Energy Information Administration (EIA). Iraq is the OPEC's second biggest oil producer, with Basra containing 59% of the country's proven oil reserves. 

"We have several companies in petrochemicals, fertilizers and paper sectors that could match the performance of the best factories in the region," Ali Al Faris said. "However it requires funding and rehabilitation."

Basra Company can hold an initial public offering in the coming two years, which will allow Basrawis to own shares in the company, Al Faris said. He did not disclose any number for the stake percentages that will be offered.