Despite a significant amount of support, only Kurdistan has demonstrated growth in investment. By comparison, mainland Iraq, however, continues to underperform.
June 14, 2021
In Iraq, including the Kurdistan Region of Iraq (KRI), there are two main contract models used when engaging international oil companies (IOCs) for upstream oil and gas activities: (1) the service contract (which may be in one of three formats: Technical Service Contract (TSC); Development and Production Service Contract (DPSC); or Exploration, Development and Production Service Contract (EDPSC)) and (2) the production sharing contract ("PSC"). While the Iraqi federal government (FG) has been persistent in using the service contract model developed by the Iraqi Ministry of Oil (MoO) rather than the PSC model, the PSC model is the contract of choice for the official ruling body of the semiautonomous KRI in the north.
The Government of Iraq (GOI) continues to face reconstruction challenges after the defeat of the ISIS physical caliphate, an uneven security environment, an economy primarily dependent on oil revenues, and deep institutional corruption. Widespread street protests that began October 2019 led to the resignation of then An uneven security environment, including the threat of resurgent extremist groups, remains an impediment to investment in many parts of the country. Other lingering effects of the fight against ISIS include major disruptions of key domestic and international trade routes and the destruction of economic infrastructure, especially in the ISIS-controlled territory in Mosul and parts of northern and western Iraq. However, the security situation varies throughout the country and is generally less problematic in the Iraqi Kurdistan Region (IKR).
Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.
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