Security in Iraq is a major holdup to investment there, sometimes second only to the lack of a law governing Iraq`s vast oil and gas reserves.
Various security plans, by Iraqi and U.S. forces, are intended to break the cycle of violence, but little of the ambitions for Iraq`s future will take hold until its citizens face fewer day-to-day threats to their lives.
Inter- and intra-sectarian violence as well as anti-occupation attacks and the multi-national force`s response keep Iraq`s morgues full, people afraid and development of vital services at bay. Iraqis face both poverty and unemployment estimated at more than 50 percent, and a simultaneous crisis lacking security, fuels, electricity, healthcare, clean water and education, though these vary by region.
Many top executives at an Iraq energy conference this week alternately ranked the security situation and the oil law as the top reasons they aren`t rushing into the country to invest. Most spoke off the record to United Press International, but shared similar concerns.
'What is the main issue to me, as long as security problem is there, it is very difficult to get service companies to Iraq,' said Orhan Duran, general manager of Genel Enerji, a Turkish firm. Genel and Canada`s Addax Petroleum formed the Taq Taq Operating Co. to operate a field in the Iraqi Kurdish region, which is relatively safe and semi-autonomous from Baghdad.
Both will be needed for the benefit of investors and Iraqis: the oil law to outline investment guidelines for foreign and private firms; security to ensure a lower risk premium in contracts.
'Of course, the cost … is higher than normal countries, because of the security,' Duran said, estimating Iraq`s deals to be two to three times higher than if it were more stable.
'We are afraid of the present status,' said a top official of a major Japanese firm at the Iraq Oil, Gas, Petrochemical and Electricity Summit organized by the London-based Iraq Development Program. 'After improvement of security, we can move.'
There`s no consensus in government on what is more of a roadblock to entering Iraq`s market.
'No doubt, the security situation is a fundamental part of the development process, whether the oil sector or the other sectors,' said Ibrahim Bahrul-Uloom, a former oil minister who held the post twice since 2003. 'We think politics and economic and security are connected together, even thought we made progress in the political process.'
The oil law is stuck between various factions who either want a heavy central control or strong regional and governorate rights and either extremely limited foreign investment or the unbridled free market.
It`s now up to Parliament to pass the law, though it has yet to receive a finished draft, but leaders of various sides in the highest parts of government agreed to move the law forward. Parliament resumed session Tuesday after an August recess. It didn`t take up the law.
'We feel the security for the oil industry is not a crucial issue. The legislation framework is the most important,' said Ali al-Dabbagh, top spokesman for the government. Though he said the energy infrastructure could be protected, by stepped up efforts from both Iraq and multi-national forces, he warned against U.S. troop reductions to fight the 'devil enemies.'
A sizeable amount of Iraq`s violence is between Sunnis and Shiites, and among rival Shiite factions. Others, both Iraqi and non-Iraqi, are fighting against the U.S. occupation or the Iraqi government by targeting high-value energy infrastructure.
Attacks on Iraq`s oil and electricity sector from April 2003 through the third week of August have been rampant and ongoing, according to an expert in threats and vulnerability to the energy sector worldwide who spoke on condition of anonymity. An official with an Iraqi ministry focused on protecting energy infrastructure says that trend will turn around.
The expert`s data includes attacks on more than 800 workers and more than 1,000 attacks on infrastructure such as pipelines, oil fields and wells, refineries and tankers, power lines and towers, power stations and substations. The expert cautioned that all the data rely on what is actually reported, assuredly lower than the number of actual attacks.
Iraq recently repaired and turned back on the pipeline from Kirkuk in the north to Turkey`s Mediterranean Sea port of Ceyhan. The second-most important pipeline in the country, it has been largely useless since the war began because of attacks.
'All pipelines throughout Iraq are vulnerable to attack, however the levels of attacks reduced recently due to the security measures,' said Issa Jaffar Jabir, director general of the Ministry of National Security Affairs.
The ministry operates the Oil Protection Force and uses special Iraqi troops, and Jabir said soon the Iraqi air force would contribute to protecting the energy infrastructure. He wouldn`t say how members protect the infrastructure.
He said he won`t be able to have 'a security vision for the country' until the oil law is approved.
Iraq`s oil exports brought in more than 93 percent of the federal budget last year, an amount that would increase if the government`s long-term plans to revamp the various energy sectors, as well as other industries, fall in line. Iraq estimates the hydrocarbons and electricity sectors need nearly $80 billion in investment through 2016.
Industry Minister Hariri, speaking to reporters in Dubai hours before a flight to Washington, said other industries could deliver up to 20 percent of the country`s gross domestic product. That means the energy sector grows as robust as the oil and gas reserves could allow it to; private companies, domestic and foreign, start investing; and the country becomes safer, he said.
'I don`t actually blame the companies for not wanting `either risk my own investment or risk my people.` For people who are looking at it from outside, it looks gloomy. Me from the inside I can see a different picture to the situation. There are large pockets of the country where the environment is safe where potential workers or companies can actually do work.'
He points to the economic development in Iraqi Kurdistan, a potential gateway into the rest of Iraq, perhaps employing Iraqis, who would be safer than foreigners right now.
'In the long term Iraq will be the next land for investment,' he said. 'There will not be another part of this planet that provides so much promise and so many opportunities … with quick, great return as Iraq will.'
Via: United Press International
Various security plans, by Iraqi and U.S. forces, are intended to break the cycle of violence, but little of the ambitions for Iraq`s future will take hold until its citizens face fewer day-to-day threats to their lives.
Inter- and intra-sectarian violence as well as anti-occupation attacks and the multi-national force`s response keep Iraq`s morgues full, people afraid and development of vital services at bay. Iraqis face both poverty and unemployment estimated at more than 50 percent, and a simultaneous crisis lacking security, fuels, electricity, healthcare, clean water and education, though these vary by region.
The energy sector, which is the bloodline for Iraq`s economy, is a frequent target.
Many top executives at an Iraq energy conference this week alternately ranked the security situation and the oil law as the top reasons they aren`t rushing into the country to invest. Most spoke off the record to United Press International, but shared similar concerns.
'What is the main issue to me, as long as security problem is there, it is very difficult to get service companies to Iraq,' said Orhan Duran, general manager of Genel Enerji, a Turkish firm. Genel and Canada`s Addax Petroleum formed the Taq Taq Operating Co. to operate a field in the Iraqi Kurdish region, which is relatively safe and semi-autonomous from Baghdad.
Both will be needed for the benefit of investors and Iraqis: the oil law to outline investment guidelines for foreign and private firms; security to ensure a lower risk premium in contracts.
'Of course, the cost … is higher than normal countries, because of the security,' Duran said, estimating Iraq`s deals to be two to three times higher than if it were more stable.
'We are afraid of the present status,' said a top official of a major Japanese firm at the Iraq Oil, Gas, Petrochemical and Electricity Summit organized by the London-based Iraq Development Program. 'After improvement of security, we can move.'
There`s no consensus in government on what is more of a roadblock to entering Iraq`s market.
'No doubt, the security situation is a fundamental part of the development process, whether the oil sector or the other sectors,' said Ibrahim Bahrul-Uloom, a former oil minister who held the post twice since 2003. 'We think politics and economic and security are connected together, even thought we made progress in the political process.'
The oil law is stuck between various factions who either want a heavy central control or strong regional and governorate rights and either extremely limited foreign investment or the unbridled free market.
It`s now up to Parliament to pass the law, though it has yet to receive a finished draft, but leaders of various sides in the highest parts of government agreed to move the law forward. Parliament resumed session Tuesday after an August recess. It didn`t take up the law.
'We feel the security for the oil industry is not a crucial issue. The legislation framework is the most important,' said Ali al-Dabbagh, top spokesman for the government. Though he said the energy infrastructure could be protected, by stepped up efforts from both Iraq and multi-national forces, he warned against U.S. troop reductions to fight the 'devil enemies.'
A sizeable amount of Iraq`s violence is between Sunnis and Shiites, and among rival Shiite factions. Others, both Iraqi and non-Iraqi, are fighting against the U.S. occupation or the Iraqi government by targeting high-value energy infrastructure.
Attacks on Iraq`s oil and electricity sector from April 2003 through the third week of August have been rampant and ongoing, according to an expert in threats and vulnerability to the energy sector worldwide who spoke on condition of anonymity. An official with an Iraqi ministry focused on protecting energy infrastructure says that trend will turn around.
The expert`s data includes attacks on more than 800 workers and more than 1,000 attacks on infrastructure such as pipelines, oil fields and wells, refineries and tankers, power lines and towers, power stations and substations. The expert cautioned that all the data rely on what is actually reported, assuredly lower than the number of actual attacks.
Iraq recently repaired and turned back on the pipeline from Kirkuk in the north to Turkey`s Mediterranean Sea port of Ceyhan. The second-most important pipeline in the country, it has been largely useless since the war began because of attacks.
'All pipelines throughout Iraq are vulnerable to attack, however the levels of attacks reduced recently due to the security measures,' said Issa Jaffar Jabir, director general of the Ministry of National Security Affairs.
The ministry operates the Oil Protection Force and uses special Iraqi troops, and Jabir said soon the Iraqi air force would contribute to protecting the energy infrastructure. He wouldn`t say how members protect the infrastructure.
He said he won`t be able to have 'a security vision for the country' until the oil law is approved.
Iraq`s oil exports brought in more than 93 percent of the federal budget last year, an amount that would increase if the government`s long-term plans to revamp the various energy sectors, as well as other industries, fall in line. Iraq estimates the hydrocarbons and electricity sectors need nearly $80 billion in investment through 2016.
Industry Minister Hariri, speaking to reporters in Dubai hours before a flight to Washington, said other industries could deliver up to 20 percent of the country`s gross domestic product. That means the energy sector grows as robust as the oil and gas reserves could allow it to; private companies, domestic and foreign, start investing; and the country becomes safer, he said.
'I don`t actually blame the companies for not wanting `either risk my own investment or risk my people.` For people who are looking at it from outside, it looks gloomy. Me from the inside I can see a different picture to the situation. There are large pockets of the country where the environment is safe where potential workers or companies can actually do work.'
He points to the economic development in Iraqi Kurdistan, a potential gateway into the rest of Iraq, perhaps employing Iraqis, who would be safer than foreigners right now.
'In the long term Iraq will be the next land for investment,' he said. 'There will not be another part of this planet that provides so much promise and so many opportunities … with quick, great return as Iraq will.'
Via: United Press International
Iraq |
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