Procurement consultant Jeremy Waller believes that the market Iraq has a lot of potential and will be driven by oil production although incoming companies will need “creative strategies”.
Waller predicts that higher oil prices mean that budgets are again available to meet infrastructure plans in certain countries. With Iraq likely to expand production significantly, Waller thinks that this will result in a “massive inflow of funds”.
“Higher oil prices mean that Iraq is starting to feel relief from having short term funding problems in meeting its need for infrastructure spend and rebuilding,” said Waller in his Construction trends in the Middle East – Iraq example is worth considering report. “It is dependent on maintaining the current success of the major oil companies operating in the southern fields of Manjoon and Rumailah.
“Western industrials should be looking hard at Iraq as an emerging market. There is huge pent up demand for most industrial equipment in the short term and massive consumerism in the longer term,” he said. “Unfortunately this is occurring against a background of state owned companies, where accountability is an issue, although the private sector is emerging strongly to assume a more entrepreneurial role. Options now are emerging so that ambitious manufacturers and service providers in the oil, water, power, sectors have real options.”
According to Waller, particular issues lie with product support, service and training and need to be addressed as they represents a higher investment than with other markets.
“You cannot just fly training and support staff into Iraq quite yet, but fortunately decades of surviving parts and equipment embargoes mean that Iraqi engineers are exceptionally skilled at maintaining and repairing plant and equipment, the oil fields in the south being a testimonial to this.”
