PRESS RELEASE – Iraq Expects Multi-Trillion Dollar Revenue from Energy Investments
PRESS RELEASE 20 May 2014 -Iraq Expects Multi-Trillion Dollar Revenue from Energy Investments
Iraq’s investment in its energy infrastructure over the next 17 years is expected to generate revenue of $6 Trillion, the country’s Deputy Prime Minister, Dr Rowsch Shaways told the IBBC London conference on Tuesday (May 20th).
Speaking at Mansion House meeting, Dr Shaways said that 85% of the huge revenue figure would come from oil. The Iraqi government’s national integrated energy strategy between 2013 and 2030 would require a total investment of $620 billion.
He added that such investment was not possible drawing on local resources alone. It would be necessary to use specialised international firms either through contracts or public-private partnerships.
Dr Shaways said that in order to attract the best international firms, Iraqi companies would be expected to adopt the necessary institutional reforms.
The Deputy Prime Minister added that there must be wholesale change in the Iraqi business world. The country should develop a fair and transparent taxation system, an effective banking system, and engage trustworthy and reputable insurance firms.
Speaking to an audience of senior business leaders, Iraqi Chambers of Commerce members, UK and Iraqi politicians, Dr Shaways said as a demonstration of Iraq’s attractiveness as an investment opportunity the government had already agreed investment licenses in 2013 of $27 billion.
Lord Deighton, Commerce Secretary to the Treasury, and the former Chief Executive of LOCOG, which was responsible for London’s hugely successful 2012 Olympic and Paralymic Games, also praised the opportunities available for foreign business in Iraq.
He said Iraq was an ambitious country and “so it should be with economic growth of close to 10% and a people with extraordinary skills and talents.”
Lord Deighton said British companies like BP and Shell had “led the way” in Iraq, and many of these firms were world leaders in skills like engineering, housing and construction. UK companies also led the world in financial and professional services.
He added that UK companies came with a clean business culture which was what was needed with the investment that was required.
“Regulation must be in place, absolute fairness for domestic and foreign companies, and a level playing field. UK companies can be pivotal in helping Iraq.” Said Lord Deighton.
He said he hoped Iraq could be a great 21st Century success story.
The City of London’s Lord Mayor, Alderman Fiona Woolf, said the City and the UK stood ready to support Iraq’s ambitions for the future.
“The global know-how here in the UK can provide tailored solutions for Iraq. We would like to be Iraq’s partner of choice so that the unique relationship between us can bare fruit,” added the Lord Mayor.
Some indication of the enormous scale of the investment needed in Iraq’s infrastructure was given by the Senior Deputy Minister for Iraq’s Housing and Reconstruction Ministry, Itstabraq Ibraheem Al Shouk.
The minister said it was estimated Iraq needed two million new housing units. Thousands of kilometres of new roads, 97 new bridges, and thousands more kilometres of road repairs. The work would cost many billions of dollars and required outside help from international companies.
The Governor of the rapidly expanding Karbala Province, Akeel Al Toreihi, agreed with the Minister. He said the last road either paved or reconstructed in his region was in 1983. Inward immigration meant that the city was rapidly running out of room. Shanty towns were springing up.
Mr Al Toreihi said he was keen to exploit the areas tourism potential, but there was nowhere near enough hotels. At busy times people were forced to sleep on the floors of schools or even on pavements around the city.
More than 80 senior directors from companies across Iraq also attended the conference.
The IBBC’s Executive Chairman, Baroness (Emma) Nicholson has recently been appointed by Prime Minister David Cameron as the UK’s official Trade Envoy to Iraq.
She said today: “Britain has been rather slow on the uptake considering what is on offer to them in Iraq. Other countries, such as South Korea, China, The USA, and even Germany and France have been far quicker to get involved. We hope that by bringing one of the biggest ever delegations of Iraqi businessmen and women here we can give trade between the two nations the kick-start it needs.”
The IBBC’s 55 members such as Shell, BP, Standard Chartered, Weir Group, PwC, Deloitte and Ernst and Young, are already well established in Iraq, but Baroness Nicholson is hopeful that others will eagerly follow them once they realise the opportunities there.
Also attending the Mansion House meeting where the UK’s former Defence Secretary and Secretary General of NATO, Lord Robertson, who now holds directorships of several of Britain’s leading companies, also addressed the conference. He also a Vice-President of IBBC.
Christos Papadopoulos, the Middle East, North Africa and Pakistan CEO for Britain’s Standard Chartered Bank spoke to, explaining why the company had recently become the first international bank for many years to open branches in Iraq.
The event, sponsored by Shell, with co-sponsorship from Weir Group and Standard Chartered, will be followed by another on Wednesday (May 21st) when Middle Sized Companies, who often do not have the resources of their multi-national counterparts, will be able to meet the Iraq businessman and women. This will be held at the Royal Over-Seas League headquarters in London.
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