Foreign investors announce billions of dollars in new Iraq deals

Sep 29, 2010, 17:53 GMT

Baghdad - A number of foreign investors announced on Wednesday contracts in Iraq worth billions of dollars in both the infrastructure and energy sectors.

On Wednesday, Iraq approved an oil project worth up to 733 million dollars for Leighton Offshore Private Ltd, a Singaporean oil company, to build a new oil export terminal in the southern city of Basra.

This deal would allow Iraq to up its oil exports from 1.8 million barrels per day (bpd) to 3 million bpd, said Ali al-Dabbagh, Iraq's government spokesman.

He described the deal as a 'turning point in the process of export of crude oil.'

Despite the size of the Singaporean company's deal, investments from France remain the highest in Iraq, with a diplomat announcing that French companies signed this week two contracts worth 1.5 billion dollars.

According to the agreements, French companies will build 10,000 housing units in Baghdad as part of a push to rebuild Iraq's infrastructure.

But Kyle Stelma, of Dunia Frontier Consultants, said that there is a huge discrepancy between deals that are announced and ones that are actualized.

He said the United Arab Emirates, for example, announced it had a 50 to 60-billion-dollar investment in Iraq for housing units that flopped recently due to security issues, among other concerns.

That said, Stelma believes that 'outside of oil and gas, Turkey, France, Russia and China are the most active, aggressive and most successful investors in Iraq.'

Dunia Frontier Consultants put out a report earlier this year, which found that a 20-billion-dollar French housing plan was part of a larger deal that the government in Baghdad secured, worth up to 1 billion dollars for city investments in 2010, including 5,000 new housing units.

A French company is also slated to begin direct flights from Paris to Baghdad to increase travel and transport from Iraq to Europe.

Although France opposed the war in Iraq, French companies are some of the biggest foreign investors in the war-torn country.

In fact French oil company, Total, has deals worth hundreds of billions of dollars in Iraq's oil sector.

Meanwhile, an Iraqi official said Wednesday that a Russian company expressed its desire to develop an oilfield north of Nasriyah.

'We are about to sign a memorandum of understanding with the company to develop the field as a first stage and then agree on the implementation of other projects, including environment, health and housing,' said Qusay Abadi, head of Nasriyah's board of directors.

Russian companies such as LUKoil, Salvneft, Gazprom, Zaruezhneft and Tafneft have all signed contracts in the past to work in Iraq's oil infrastructure.