Investing in Iraq’s oil
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BRIAN WATT: The Iraq Study Group gave Washington a lot to chew on yesterday. It also made a number of recommendations that relate to business. Primarily, the oil business. Iraq sits on one of the world largest petroleum reserves. So the natural resources are there, but right now the financial resources are not. What would it take to attract foreign businesses and investment in the oil industry? Marketplace’s Jeff Tyler reports.
JEFF TYLER: Security, obviously, is a big obstacle. Companies want to make sure their people and property are safe. But aside from that, businesses are also wary of Iraq because of legal insecurity.
Michael Lynch is president of the consulting firm Strategic Energy and Economic Research.
MICHAEL LYNCH: Investors really need to see a petroleum law implemented and in place so that the Energy Ministry can sign contracts, which they have some confidence will last for at least some period of time.
With viable laws to protect their investments, Lynch says some foreign firms would likely set-up shop.
LYNCH: There are always people willing to accept a degree of risk, especially the smaller companies and the national oil companies, compared to the big international majors.
Those major oil companies would remain on the sidelines, Lynch says, viewing smaller players like canaries in the coal mine.
If the small firms thrive, he says, the giant corporations would follow.
I’m Jeff Tyler for Marketplace.
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