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.