Will the withdrawal of major foreign oil companies benefit the Iraqi economy(Translated)

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July 15, 2021

Major oil companies operating in Iraq intend to completely withdraw from investment in the oil sector, as the Russian “Lukoil” company sent official notifications saying that it wants to sell its share in the West Qurna-2 project to China. The British company BP is also considering withdrawing, as did the American companies Royal Dutch Shell and ExxonMobil, according to statements by Iraqi Oil Minister Ihsan Abdul-Jabbar made during a parliamentary session on June 29.

This withdrawal coincides with the continued rise in black gold prices, as it touched the barrier of $ 75 per barrel, but Iraqi oil, with the exception of Basra Light, is “less than international price

The volume of Iraq’s oil production is more than 4 million barrels per day, according to the determinants of “OPEC Plus”, while the export volume is more than 3 million barrels per day, “according to the Iraqi Oil Ministry’s graph

Positive withdrawal

For his part, the oil expert, Dr. Hamza Al-Jawahiri, believes that positive factors are looming on the horizon due to the withdrawal of foreign companies from investing in Iraqi oil fields.

He explained in an interview with Al Jazeera Net, “The withdrawal of investment companies will not affect the sustainability of black gold production because Iraq currently has working national human resources who have been trained and operated by foreign companies for more than 10 years, and they have completed many projects, and their numbers range between 70% and 90% of the The volume of work of these companies, which will lead to the continued operation of Iraq’s oil fields even if those companies withdrew.”

Regarding other oil companies that wish to replace the companies that withdrew from investing in Iraqi oil, Al-Jawahiri pointed out that “Chinese companies strongly desire to enter the Iraqi oil investment market.”

Al-Jawahiri added that the withdrawing companies “do not find much interest in the oil licensing rounds contracts, the return of which is very simple, about two dollars per barrel produced,” supporting the expedited withdrawal of foreign companies from the country

Deteriorating investment climate

The expert in economic affairs, Dr. Ahmed Al-Hathal, confirms that many factors have led to the deterioration of the investment climate in Iraq since the US invasion in 2003, including the security situation and the chaos of arms, in addition to administrative bureaucracy and weak investment laws, as well as political extortion practiced on foreign companies wishing to enter the Iraqi market.

“Iraq needs to attract sober investment companies in all economic, commercial and oil fields, provided that investment laws are amended, a safe environment is provided, and the foreign investor is obligated to implement all the terms of the agreement with Iraq,” he said

 
 

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