Western oil companies see 'fantastic' future in Iraq, sign agreements

WASHINGTON: Western energy companies on Friday signed dozens of agreements with Iraqi ‌officials on oil and gas and pipelines as the OPEC member seeks to deepen relations with the U.S. and develop alternatives to the Strait of Hormuz for getting its energy to global markets.

“We are using an open-door policy,” Prime Minister Ali al-Zaidi said through a translator at a ​U.S.-Iraq business summit at the U.S. Chamber of Commerce where Iraqi officials and U.S. energy, healthcare and technology companies ​signed non-binding agreements and memorandums of understanding of more than $60 billion. “Everybody who has a project can ⁠come and talk to us. We will not make it difficult for anyone,” Zaidi said.

The U.S.-Israeli war on Iran has ​rocked Iraq’s neighboring country and the wider Middle East. Tom Barrack, an envoy to the region for President Donald Trump, said on ​one hand the war has created chaos and confusion but on the other Iraq is “at the forefront of a new strategic security alliance” with the U.S. and others.

Zaidi visited Chevron’s (CVX.N), opens new tab headquarters in Houston on Thursday before Iraqi officials signed agreements with the oil major to advance its potential entry ​into Iraq’s West Qurna 2 and Nassiriya oilfields.

Jake Spiering, a Chevron president of corporate business development, told the Chamber event that ​his company will be investing in a pipeline to avoid the Strait of Hormuz and create another export route out of Iraq. Such a ‌pipeline could ⁠transport Iraqi oil to the west coast of Syria which is on the Mediterranean Sea.

Iraq’s exports have been hit hard by the war in part due to the partial closing of the strait through which 20% of the world’s oil and gas typically flowed.

In the long term, Spiering said, Iraq’s energy potential could make it the Middle East’s equivalent of the U.S. energy trading ​centers known as the Henry ​Hub natural gas and Cushing ⁠oil hubs.

ConocoPhillips said it had agreed to acquire a 42% stake in BP Energy of Kirkuk Ltd, joining British oil major BP (BP.L), opens new tab in redeveloping four producing oilfields in northern Iraq.

BP SEES POTENTIAL

Meg ​O’Neill, BP’s CEO, said Iraq has “fantastic potential from a resource perspective,” and that the partnerships ​help with Iraqi ⁠and global energy security. BP has a long history in Iraq, having been involved in the discovery of Kirkuk in 1927.
Ryan Lance, the CEO of Conoco, said his company does not have the history BP does in Iraq, but has experience in challenging places like ⁠Alaska’s North ​Slope.

“We are anxious to bring our technology, our know-how, our people, and ​our capital to help the Iraqi people,” Lance said.
Zaidi, on a five-day trip to the U.S., met Trump at the White House on Tuesday, who said the ​U.S. would be doing a lot of deals with Iraq, creating jobs for both countries.