Kurdistan has succeeded in attracting investment, but the region also recognises that it needs to implement reforms
In recent years international oil and gas companies have flocked to the Kurdistan region of Iraq to participate in the booming oil market, which has blossomed in the wake of several notable discoveries.
Oil exploration is a costly and risky business - warranted only when there is a strike - and, as small oil players in the region have found, striking big is common there. Since August 2007, the regional government has signed over 20 Production Sharing Contracts (PSCs) with dozens of international oil and gas exploration and production companies, many of which have announced sizeable discoveries.
British companies are leading the march in the Kurdistan Region. Gulf Keystone Petroleum a small oil and gas exploration company listed on the London Alternative Investment Market (AIM) has unearthed what could be one of the largest discoveries in the world; its Shaikan discovery may hold over 10 billion barrels of oil, a figure which is likely to increase significantly according to recent announcements. Moreover, Heritage Oil, another British exploration firm, has also announced Iraqs largest gas discovery, an area that could contain over 12 trillion cubic feet (TCF).
But its not just the oil and gas sector that is seeing unprecedented growth. Over the past four years, the Kurdistan Board of Investment, a government entity overseeing investment projects in the region, has attracted over $17 billion in various sectors, particularly in industrial projects and housing. The Board of Investment supervises almost $4 billion worth of capital injected into the region by foreign investments, including over $1.5 billion by Kuwaiti businesses.
The Kurdistan Region has demonstrated that it offers rich opportunities for investors, but it is also investing in the future by supporting projects that encourage entrepreneurship and prepares the local population for the next generation. As part of this scheme, the regional government has decided to extend a $100 million scholarship programme this year by sending hundreds of students from our universities to some of the worlds most reputable institutions. This, amongst other programmes, illustrates our governments belief in the rich talent our region possesses and that they hold the key to our long-term future. In fact, businesses operating in the country, including British Petroleum (BP), are now beginning to sponsor scholarship programmes for Iraqi students.
However despite the vast investments, our region is not immune from shortcomings, and recent protests illustrate the need for significant reforms to be conducted. The president of the Kurdistan Region, Masoud Barzani, is spearheading an effort to implement meaningful reforms, and we have witnessed some positive reactions to his reform plans supported by the parliament and regional government. Collectively, the authorities in the region recognise that transparency and accountability will play a crucial role in attracting continued investment and building trust within the international community, to ensure meaningful prosperity. Furthermore, we have announced early provincial elections scheduled to take place this September.
Our experience and relationship with Turkey has taken a tremendous turn; a few years ago Turkey massed hundreds of thousands of troops on the Kurdish border ready to conduct an incursion into the Kurdistan Region. Today, of Turkeys $7.5 billion worth of investment into Iraq, over half is directly to the Kurdistan Region a testament of the opportunities it has to offer. This has been the key to enhancing our ties with Turkey and has led to senior Turkish officials visiting our region, including an unprecedented visit by the prime minister, Recep Erdogan in March this year.
Now is the time for the Gulf to set a key example by encouraging more business and relations with the Kurdistan Region, and to take advantage of our attractive investment law and exceptional opportunities. An investment into the Kurdistan Region today means an investment into the future of a promising region. <
Aziz Ahmad is an employee with the KRGs Department of Foreign Relations. His views do not necessarily reflect the views of the Kurdistan Regional Government.
The Gulf 2011
