- The company will seek to attract investment in oil, gas and infrastructure
- The legality of the proposed firm has been questioned by critics
- Some critics see its creation as an attempt to wrestle control of the regions oil sector away from Baghdad
Basra Council, the political authority for Iraqs economic capital, has announced it is in the process of establishing Basra Company, a regional development firm.
The new company will be charged with boosting the economy in the governorate through the attraction of foreign direct investment in key sectors, including oil, gas and infrastructure.
The plans for the new company were announced at a conference in Turkey on 2 November.
The aim of Basra Company will be to help attract global players and investors to bring new and extant fields up to international best standards, the Basra Council said in a statement released after the announcement.
The legality of the proposed company has been questioned by critics who see its creation as an attempt to wrestle control of the regions oil sector away from Baghdad.
These legal concerns have been rejected by the Basra Council.
We believe the provincial government has a significant role to play in stimulating the local economy, said Ali al-Faris, chairman of the Oil and Gas Committee of Basra Council. Basra Company will be established in line with the constitution, federal laws and policies of the federal government of Iraq.
The creation of a new company has sparked concerns that it could add a new layer of bureaucracy and reduce transparency.
These concerns have also been dismissed by the Basra Council.
Basra Company is the vehicle through which the provincial government will optimise utilisation of resources and position Basra as the economic engine of Iraq, said Al-Faris.
We are studying a range of options for financing, including partnerships with local and international investors to finance the projects of Basra Company, which could be wholly-owned by the council or in partnership with South Oil Company and South Gas Company, as well as other local companies. An IPO [initial public offering] is also being considered to allow Basrawis to own shares in the company
The formation of the company is still at an early stage and it is unclear how it will operate and when it will become operational.
According to the US Energy Information Administration (EIA), the Basra governorate is home to:
- 70 per cent of Iraqs proven gas reserves and
- 59 per cent of the countrys oil reserves