UAE to invest in Iraq oil and gas?

Third round of bids this year

Energy companies in the UAE are reportedly interested in investing in Iraq's oil and gas industry in a bid to increase output.

Speaking to the press, Abdullah Ibrahim Al Shehhi, the UAE's ambassador to Iraq, said, "There are indicators that the UAE will have a place in the petroleum and energy sector (in the country)."

One of the country's chief investors, Mubadala Development Co., is rumoured to be interested in expanding into Iraq, increasing the amount of bilateral trade between the two countries. Currently, the amount of trade is said to be worth around $5 billion, but that is expected to rise to $7 billion.

It is not just the oil and gas industry that is looking to invest in the country, but also property and airline firms are hoping to expand their markets. In April, Ethidad Airways began flights to Iraq, while Emirates, the region's largest airline, is planning to start flights later in the year.

However, it is the energy market where the most interest and investment lies.

Oil and gas output

Iraq has already held two bidding rounds in an attempt to sell rights to develop hydrocarbon deposits, as part of their plan to expand oil and gas output. A third has been planned for later in the year and UAE oil companies are expected to bid heavily for the rights, as they lost out to international firms last year.

While no UAE companies qualified to bid in Iraq's first two auctions last year, Mubadala, which has exploration and production assets in Kazakhstan and Thailand, has joint ventures in the UAE and Bahrain with US producer Occidental Petroleum Corp., which is a partner to develop the Zubair oil field in Iraq. As such, it is expected to bid for additional rights.

Meanwhile, Petromal, an oil and gas explorer funded by members of Abu Dhabi's ruling family, aimed to bid for Iraqi assets in auctions last year along with partner Premier Oil and are expected to do so again this year.

Relevant articles:

UAE oil output to increase | Refinery expansion and pipeline projects | Basra oil field no longer included in Iraq's second bidding round

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