Dec 11 2012
By Basem al-Rikabi
The governor of the southern Province of Basra Khalaf Abdulsamad is visiting the U.S. this week for talks with American firms willing to invest in Iraq.
Basra is currently Iraq’s most promising province for foreign entrepreneurs. In addition to federal government allocations, the province has its own budget which it draws from the so-called petro-dollar project.
Under the project, Iraqi provinces are entitled to $2 for each barrel of oil produced from their oil fields. Currently most of Iraq’s oil output 3.3 million barrels of oil a day originate in Basra.
The province is the scene of some of the world’s largest oil development projects, with foreign majors working on new oil fields with proven reserves estimated at billions of barrels.
Iraq is witnessing unprecedented growth rates estimated at more than 10% of GDP, surpassing China as the world’s fastest growing nation.
Most of the growth is attributed to higher oil sales which last year generated royalties of more than $100 billion.
Basra is in need of large investments mainly to upgrade its run-down infrastructure. But the province is keen to lure U.S. majors to invest in oil-related industries.
Iraqi-U.S. trade relations are booming and value of Iraqi exports to America, mainly oil, reached $17 billion last year.
Oil is currently Iraq’s major foreign cash earner and the country imports heavily to meet its industrial and agricultural needs.
Most of Iraqi imports originate in neighboring countries, particularly Turkey and Iran, as well as China and other Southeast Asian states.
Iraq’s federal system of government allows different provinces to pursue their own development plans and governor Abdulsamad’s visit to the U.S. is specifically to explore ways of increasing imports from the U.S. and urge U.S. firms to directly implement infrastructure projects.