Building Bridges to Babylon


Economic News

22 Jul 2010
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While the situation in Iraq continues to be a cause of concern for the region, as well as for the US-led coalition trying to restore order in the war-ravaged nation, Qatar is taking a more prominent role in trying to improve conditions in the country.

This week, Qatar's Minister for Energy and Industry HE Abdullah bin Hamad Al Attiyah announced that a joint committee between Qatar and Iraq will be formed to help develop the latter's oil and gas industry, which has been decimated by years of sanctions and a recent surge in sabotage attacks.

According to an August report by the US Department of Energy, Iraq is estimated to hold more than 112bn barrels of proven oil reserves, and possibly much more undiscovered oil in unexplored areas of the country. Iraq is also estimated to contain at least 110tn cubic feet of natural gas. The report notes that Iraq's oil development and production costs are amongst the lowest in the world, making it a highly attractive oil prospect.

Furthermore, the report contends, only 17 of 80 discovered fields have been developed, and few deep wells have been drilled compared to Iraq's neighbours. Of the 2,300 wells that have been drilled, only 1,600 are actually producing oil.

The US report highlights that the poor state of Iraq's oil industry means the country needs the latest, state-of-the-art technology, such as 3D seismic, directional or deep drilling, gas injection, as well as sufficient spare parts and - most importantly - investment.

Enter Qatar. Following the massive expansion of its natural gas industry, Qatar's financial situation has improved dramatically in recent years. The country's oil and gas sector has also benefited from the latest technology that Iraq needs to develop its energy industries. "We are very interested in investing in Iraq, and Qatar Petroleum has a lot of experience in the field of oil and gas," said HE Hamad Al Attiyah.

The move demonstrates the apparent desire on both sides to enhance co-operation. Qatar has aimed at increasing oil production, locating additional oil reserves before existing reserves become too expensive to recover, and investing in advanced oil recovery systems to extend the life of existing fields. Joint operations in Iraq's massive oil sector could help relieve some of the pressure in finding additional domestic supplies.

However, Qatar's interest in Iraq extends beyond the purely economic field. In October, Qatar donated USD15m to the International Fund for Higher Education in Iraq, a joint plan launched by HH Sheikha Mozah Bint Nasser Al Missned, Chairperson of the Qatar Foundation, and the United Nations Educational, Scientific, and Cultural Organisation (UNESCO). It was also announced this week that Qatar would provide scholarships for Iraqi students to pursue higher education in the tiny emirate. A particular emphasis will be given to studies in medicine and industry, areas critical to Iraq's recovery effort.

However, these initiatives have been taken not only in the context of Iraq's most immediate needs, but also in terms of the long-term vision to create a democratic, peaceful and prosperous Iraq. As HH Sheikha Mozah said in a speech unveiling the education fund for Iraq, "Without well-educated citizens, willing to participate in the affairs of their countries, democracy cannot thrive. On the contrary, it will remain an empty theatre of elected seats. However, with well-educated citizens, critically charting the course of their future, this theatre is transformed into an interactive performance."

So far, however, the vision of a stable and productive Iraq remains illusive. With mounting US and coalition casualties, and increasingly bold attacks by resistance fighters, the stabilisation efforts appear uncertain. Indeed, US Central Command this month ordered hundreds of additional staff officers deployed to the forward headquarters in Qatar to help with the increased tempo of operations.

The increased attacks have also raised concerns over the future of Iraqi development. However, during his visit this week to Qatar, Iraqi Oil Minister Bahr Al Uloom countered that the acts of sabotage would never stop the development and production of Iraqi oil - adding that despite these hindrances, oil production was improving. Despite this optimistic outlook, it is widely considered that the future of Iraq remains in question.

Nevertheless, it is the importance of Iraq's future that has motivated Qatar to step up its efforts to provide assistance in stabilising the country. These efforts are also demonstrative of the emerging regional role Qatar is carving out for itself as a beacon of political and economic modernisation - a role that has won Qatar much praise from the US. As President Bush said during a May meeting hosting HH Sheikh Hamad Bin Khalifa Al Thani, "The Emir has shown great leadership. He has led his country to join in a vast coalition to make the world more peaceful and to make the world more free." While these steps are still in their early stages, it is likely that Qatar will continue to build more bridges to Babylon.

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