Iraq Is Hot Spot for International Oil Production Investment

---

Written by Paul Wiseman for IIR News Intelligence (Sugar Land, Texas)

---

Summary

The May 15 appointment of Bassim Mohammed Khudair as Iraq's minister of oil has opened the door for new oil and gas investments.

---

Investment Opportunities Open

A new cadre of Iraqi leadership, dealing with issues including the closing of the Strait of Hormuz and the fact that they flare a huge amount of natural gas, is moving to open the door to foreign investment. And U.S. majors Chevron Corporation and Exxon Mobil Corporation, among many other internationals, are turning their gaze in Iraq's direction.

According to Industrial Info Resources data, there are 25 active capital oil and gas production projects in Iraq, with a total investment value of US$7.18 billion. There also are 13 active oil and gas pipeline projects in Iraq, worth US$7.27 billion, and two oil and gas terminals projects, worth US$650 million.

The May 15 appointment of Bassim Mohammed Khudair as Iraq's minister of oil, as proposed by Prime Minister Ali al-Zaidi (also recently appointed), opened the door for new investments. In a statement following his appointment, Khudair said the oil ministry's goal now is to "achieve full production capacity in both oil and gas, eliminate the flaring of [associated] gas and utilize it for energy generation."

In another statement he added, "The main objective is to make Iraq an attractive investment environment for all international companies, especially from Europe and the US. We will provide all support to these companies to overcome obstacles and problems."

Gordon Gorrie, VP of Oil and Gas Research for Industrial Info Resources, said there is a long list of international oil companies already in the nation, such as BP, TotalEnergies, ENI, CNOOC and PetroChina.

"Chevron is the latest to join the club, after acquiring Lukoil's share of the West Qurna-2 field," Gorrie said. Other reports include Exxon Mobil and HKN in that list.

Gorrie continued, "From a production point of view, the Rumaila Field, operated in partnership with BP, is the most productive. The nearby West Qurna, Majnoon and Zubair fields together are slated to hold the most reserves."

Closing of the Strait Opens Their Eyes

Although the Strait of Hormuz has reopened (more or less) in recent days, its months-long closing "put a magnifying glass on Iraq's necessity to find another outlet of exporting its crude oil," Gorrie explained. "Until then the main outlet was via terminals in Basrah, loading it onto tankers, and shipping through the Strait."

Iraq does have a northern pipeline, he said, but it needs extensive repairs, as well as extensive investment in additional pipelines to connect it to the southern fields where most of the production comes from.

Looking for White House Love

In a June 16 statement, al-Zaidi's office proclaimed that he and Tom Barrack, an envoy of U.S. President Donald Trump, had "reaffirmed the shared commitment of the Iraqi government, led by Prime Minister Ali al-Zaidi, and the United States government, led by President Trump, to establish a strong and mutually beneficial U.S.-Iraqi partnership..."

Some pundits believe one purpose for al-Zaidi's currying of Washington's favor is to get Trump's support for a second term as prime minister.

As much as Trump has asked U.S. companies to invest in Venezuela, Iraq has many advantages. While Venezuela's thick crude is among the world's most expensive to produce, requiring years of investment in equipment and infrastructure, Iraq's reserves are among the most cost effective. And the latter's proven reserves, at 145 billion barrels, rank it fifth globally, accounting for just under 10% of the world's total. These numbers are significant enough to attract the interest of international majors.

Classical Gas

There's also an opportunity for natural gas investment. Iraq's gas reserves rank it 12th in the world, primarily as associated gas from oil production, mostly in southern regions. Much of it is flared, with reports indicating that while it flared 1.2 billion standard cubic feet per day in 2023 (ranking it among the world's top five worst in flaring), while some reports (S&P Global) list current imports at just over half a billion standard cubic feet per day--which is down somewhat from previous levels due to Iran war interruptions.

Iraq would need significant imports of investment internationally to monetize that asset.

By the Numbers

• 145 billion barrels: Proven oil reserves in Iraq
• Fifth in the world: Iraq's rank in proven reserves

Key Takeaways

• Iraqi Prime Minister Ali al-Zaidi and Oil Minister Bassim Mohammed Khudair are inviting U.S. and other nations' major oil companies to invest in Iraq.

---

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).