x Abu Dhabi, UAESunday 23 July 2017

Iraq's Kurds keen to mine riches

Iraqi Kurdistan has opened its relatively undeveloped land to foreign oil companies, and it wants to bring in miners next.

ERBIL, IRAQ // Iraqi Kurdistan, with oil reserves said to be as plentiful as Libya's, believes more riches could lie underground.

"Another untapped sector in Kurdistan is the mining sector," Barham Salih, the prime minister in the Kurdistan Regional Government (KRG), told oil executives in Erbil last Sunday, adding that the region held the promise of "large deposits of phosphate, iron, copper and marble - to name a few".

Venturing into mining would help this semi-autonomous region in northern Iraq diversify its economy away from oil, which has already attracted the former BP chief executive Tony Hayward and, most recently, ExxonMobil, the world's biggest oil company.

It also reflects an awareness that much of the acreage that oil companies find attractive has already been given out, meaning that Kurdistan needs to branch into other industries if it wants to continue to attract major international investors. A watershed deal struck with ExxonMobil last month was made possible because the oil ministry offered the US company a prize block previously held in reserve for the Kurdish state oil company.

Investments in non-oil sectors, including housing and agriculture, have totalled US$16 billion (Dh58.77bn) since the formation of the KRG, according to Mr Salih.

"We are pleased that our policies are proving the right ones to attract world-class companies to invest in Kurdistan," he said. "The days when Kurdistan was an isolated economic backwater are over."

Baghdad insists that the more than 40 oil contracts the KRG has signed with foreign partners violate the Iraqi constitution, and the dispute has crippled Kurdish oil exports because of the reluctance of the central government to compensate oil companies operating in Kurdistan for their production costs. But Kurdistan has been vocal about asserting sovereignty over natural resources, newly emboldened by a $2.1bn investment from Mr Hayward's investment company and the ExxonMobil deal, on which the oil company has yet to publicly comment.

The Kurdish regional government draws its rationale in part from a history of stifled investment in the north during the years that Saddam Hussein was in power. The KRG also draws its rationale from a postwar pace of postwar oil development in central and southern Iraq that the Kurdish authorities consider too slow to adequately fund the country's rebuilding effort.

"There is no way that we will allow ourselves yet again, ever again, to be held hostage to the whims of some bureaucrats in Baghdad," Mr Salih said. "That history is one that we cannot ignore that easily. The oil revenues of Iraq must be turned from the curse it has been to a blessing for all the people of Iraq, and we should be pursuing economic policies that ensure the best use of these resources in the shortest possible amount of time so that Iraqi reconstruction can move forward."

 

ayee@thenational.ae