Rapidly emerging as one of the world’s fastest growing economies, Iraq is a place that few global private equity investors can afford to miss; writes Zaab Sethna.
20 June 2011
Investor interest and activity are growing rapidly. The country is enjoying a rush of foreign direct investment in a broad range of sectors and the NGP Iraq20 Index, which tracks the 20 largest companies by market capitalization on the nascent Iraq Stock Exchange, is up 35% this year. Private equity investment is also starting to take off, offering rich pickings for early movers.
A number of fairly unique characteristics and trends are driving the increase in foreign participation through all Iraqi investment classes. First amongst these is Iraq’s immense natural wealth. The country’s oil reserves are potentially the world’s largest, estimated by some industry insiders to be up to 300 billion barrels (bbl). In comparison, Saudi Arabia has the world’s largest proven reserves at 264 bbl. Iraq’s current proven reserves number, 143 bbl, is based on outdated data and will be revised as exploration resumes after 30 years hiatus.