Maplecroft Country Risk Report for Iraq
Maplecroft’s Country Risk Report for Iraq focuses on the primary risks to oil and gas companies operating in Iraqi Kurdistan. The report includes in-depth analysis of current political dynamics, including tensions between Erbil and Baghdad, security concerns, legal and regulatory challenges, the human rights and labour rights situation and environmental issues.
Iraq is facing a year of political uncertainty and potential instability. In Iraqi Kurdistan, the relationship between the Patriotic Union of Kurdistan (PUK) and the Kurdistan Democratic Party (KDP) is souring. Meanwhile, an increasingly hostile and intractable confrontation between Erbil and Baghdad over contested territory and Kurdish issuance of oil contracts remains a source of concern for investors. Tensions peaked in November 2012 when both the KRG and federal authorities sent thousands of troops to a disputed border in the Diyala governorate. A de-escalation of the military stand-off has yielded progress but political statements regarding the incident remain vitriolic.
Oil and gas companies have good reason to be interested in Iraqi Kurdistan. Long-term indications suggest that crude production from the north of the country will constitute a rapidly growing share of overall national output, rising from 6.6% in 2012 to 33% by 2020. However, considerable challenges remain, not least the inability of Erbil and Baghdad to agree on the terms of exploration contracts.
Although still challenging, the business environment in Iraqi Kurdistan has improved at a faster rate than in the rest of the country over the last decade. Significant differences include higher levels of security, a less cumbersome bureaucracy and the more attractive Production Sharing Agreements offered by the KRG compared with the Technical Service Contracts offered by Baghdad. A significant degree of regulatory uncertainty nonetheless persists in the absence of a federal oil and gas law (FOGL) while investors have reason to be concerned about friction between the PUK and KDP.
Maplecroft will also be releasing a new in-depth Iraq report to provide oil and gas companies with a comprehensive picture of security risks in federal Iraq with a focus on Basra. In addition to providing a detailed evaluation of the risks to energy infrastructure deriving from terrorist attacks, the report will analyse the general security environment and regime stability.
The report will feature maps and graphs to reveal security trends from 2004 to present using comprehensive data of all reported terrorist incidents in the country from the Maplecroft Terrorism Dashboard. This data allows Maplecroft to assess the financial impacts, numbers of casualties and attacks on pipelines, refineries, oil storage, gas stations, electricity plants, power plants and oil transportation vehicles across Iraq and Basra specifically, as well as assessing their relative vulnerability.