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Wed 17 Mar 2010 04:00 AM

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Oil’s biggest election

Iraq’s March elections are arguably the most significant political event in the upstream calendar, determining not just next year’s activity, but decades of big business. The challenges the domestic security operation will have to deal with are immense, but the opportunity both for Iraq, its people and the oil and gas industry in the Middle East are unparalleled.

Iraq’s March elections are arguably the most significant political event in the upstream calendar, determining not just next year’s activity, but decades of big business. The challenges the domestic security operation will have to deal with are immense, but the opportunity both for Iraq, its people and the oil and gas industry in the Middle East are unparalleled.

The election of Iraq’s second permanent democratic Parliament makes a significant stage in the gestation of the fully functioning state everyone craves so much. The vote will be the fifth time the populous at large has been asked to go to the polls since the fall of Saddam Hussein’s regime in 2003. Critically it will mark a turning point for the nation – a step towards greater unity, or down the path of further fragmentation.

For the upstream oil business the election is also a significant milestone. Many of the major field development programmes which have been contracted by the Ministry of Oil included quick-start clauses. Essentially in winning the bid, the international oil companies and, in some cases national oil company led-conglomerates cannot sit on their hands and idly wait to see which way the wind will blow before ploughing in the much needed investment.

This is, of course a practical and seemingly sensible option for Iraq, if a slightly stressful situation for the successful bidders. Security has improved, but the election is likely to bring violence back to the table, if only in an attempt to disrupt the democratic process.

The best result for Iraq and for business will be a timely conclusion to the election. A saga which drags on for weeks, or even months as political factions try to find ways to work together will help no-one, least of the oil firms who need to get on with the job in hand.

The Iraq business guide on
ArabianOilandGas.com

shows that there is a real desire by parties on both sides to push on and work quickly. The situation in Iraq is unmistakably the best in many years for the formation and successful operation of companies on the ground.

Daniel Canty is the editor of Oil & Gas Middle East.

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