Abu Dhabi's power company plans to provide electricity to the oil sector in southern Iraq to help to fuel the nation's ambitious crude production targets.
Abu Dhabi National Energy (Taqa) hopes by next year to announce the details of a power project at one of the south's massive oilfields.
"We're working on a project with partners that we've put together," said Frank Perez, Taqa's executive officer for power and water. "The oil and gas majors, particularly in the south, have huge concessions and have huge power needs, and they need someone to build some plants for them and provide them energy within their area of influence and the area of their concessions."
Royal Dutch Shell, BP and China National Petroleum Corporation are among the oil majors that secured rights to gigantic oilfields after the latest war and are helping to increase pumping levels from today's 3.3 million barrels per day (bpd) to as much as 12 million by 2020, according to initial oil ministry targets.
Taqa, which bought into a 1,000 megawatt power plant in northern Iraq's Kurdistan region in April, is moving in the opposite direction of many oil companies that have abandoned the south for the north in the past year. ExxonMobil, Chevron and Total have all abandoned or run the risk of losing venture opportunities in the south by signing exploration contracts with the semi autonomous Kurdistan Regional Government.
Baghdad enforces a blacklisting policy against companies that sign oil production contracts in the north, although it has not penalised contractors or power companies. Taqa is in a delicate position, however, because it holds a one-fifth stake in WesternZagros, which mainly pumps oil in Kurdistan.
Last month David Cook, Taqa's executive officer for oil and gas, gave up his seat on the board of WesternZagros, although Taqa has the right to name another director.
"As Abu Dhabi we're big investors in the country, and Taqa certainly is comfortable supporting both - all the activity in the region," said Mr Perez in an interview at the company's headquarters. Taqa's current plans echo hopes in 2008 of setting up a subsidiary in Iraq to rebuild the nation's power grid. At the time, the then chief executive, Peter Barker-Homek, said that the subsidiary, to be named Taqa Babylon, would invest US$100 million (Dh367m) in Fallujah, Basra and Baghdad.
Mr Barker-Homek left the company in 2009 and since then the company has shifted its strategy from far-flung acquisitions in Canada and the Caribbean to regional expansion.
Providing power for oil majors is also safer than building plants for local communities, which can be vulnerable to attacks, said Mr Perez.
Taqa's joint venture plant in the Kurdish town of Sulemanieh is also making progress. Next year Taqa will add a further 500MW to its 1,000MW capacity by making gas use more efficient and recovering waste heat to use to drive additional turbines.
Supplying power to central Iraq is also a possibility for the Kurdistan Regional Government, which distributes the electricity from the plant to consumers, added Mr Perez. Last year, Kurdistan began selling power to Kirkuk, a neighbouring province that both central Iraq and the Kurdistan Regional Government lay claim to.
In separate arrangement Abu Dhabi signed an agreement today in Ankara with the Turkish government supporting cooperation on power generation and mining development there.
The governments hope to complete negotiations on an agreement for Taqa and Turkey’s Electricity Generation on investing in a power plant there and building new ones.
“Turkey has great growth dynamics and is keen to attract foreign direct investment to develop its indigenous energy resources,” Carl Sheldon, the chief executive of Taqa, said in a statement.