Iran, Iraq Solidify Energy Partnership
Source: Reuters, Khalid al-Ansary (7/6/11)
"Iran aims to boost trade to $10B this year as it looks to strengthen economic ties, especially in the oil sector."
Iran aims to boost trade and investment with neighboring Iraq to $10B this year as it looks to further strengthen economic ties, especially in the oil sector, an Iranian official said on Wednesday.
Relations between the two countries, which fought an eight-year war in the 1980s, have improved since the ousting of Saddam Hussein in the 2003 U.S.-led invasion and after a Shi'ite-led government came to power in Iraq.
Shi'ite Iran is now Iraq's second-biggest trading partner after Turkey.
"The big Iranian companies have the ability to engage in trading and investment in Iraq in oil, gas, petrochemicals, agriculture, heavy industries, electricity and religious tourism," said Hassan Kazemi Qomi, head of the Iraq-Iran economic development committee and Iran's former ambassador to Iraq.
"Trading between Iraq and Iran reached $6B last year. . .We're looking to make it $10B this year and $20B in the coming five years," he said.
Despite U.S. and U.N. sanctions on Iran due to its disputed nuclear program, trade relations with Iraq have flourished.
Iran has invested in building power plants, schools, hotels and brick factories as part of Iraq's reconstruction efforts. Iranian exports to Iraq include construction materials, petrochemicals, industrial and medical equipment and food .
Iraq's cabinet approved a $365M contract with Iran last Wednesday to build a pipeline to move gas from Iran to Iraq for power generation. The five-year deal will generate 2,500 megawatts for Iraq, which has a chronic electricity shortage.
"We are very, very eager to get involved in energy projects in Iraq. We have knowledgeable engineers in the oil business," Hameed Ridha, commercial manager of the Shahed Oil and Energy Group, told Reuters. "We are very anxious to get involved in(building) refineries."
Iraq, which has been slow to rebuild since the 2003 U.S.-led invasion, needs investment in virtually every sector.