Saudi Arabia to invest billions in Iraq, officials say

Reuters

• Saudi Aramco will develop the Akkas gas field in Iraq
• Kingdom also due to invest in petchem project Nebras
• PIF launched new company for investments in the country

Saudi Arabia will develop an Iraq gas field and invest $3 billion across various industries in the country, Iraqi officials said on Thursday, in a further sign of improving ties between the neighbours.

Riyadh has endured a fraught relationship with Baghdad over the past two decades as Iraq fell under the increasing influence of Saudi’s long-term foe Iran, following the ouster of Saddam Hussein and his ruling Ba’ath party in 2003.

Now though, Saudi policymakers seem keen to invest in Iraq despite several major foreign oil companies such as ExxonMobil, BP and Shell seeking to leave the country over the past few years.

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On Thursday Iraq’s oil minister Hayan Abdel-Ghani said Saudi Aramco would develop the Akkas gas field in the western Anbar province. The field could produce more than 400 million cubic feet of gas per day, Reuters reported.

In a statement following Abdel-Ghani’s comments, the oil ministry said Saudi Arabia had also provisionally agreed to invest in Nebras, an Iraqi petrochemicals project.

Broader scope

Separately, Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), has created the Saudi-Iraqi Investment Company. This will invest up to $3 billion in various industries, the new firm’s acting chief executive revealed on Thursday.

The company will buy into sectors including mining, agriculture, real estate and financial services, Reuters reported citing comments by acting CEO Muteb Alshathri during a Saudi-Iraqi Coordination Council meeting in Jeddah.

“The Saudis are beginning to realise there’s a real need to engage in Iraq. To try to counter some of the Iranian influence there,” Douglas Silliman, president of Washington’s Arab Gulf States Institute and the United States ambassador to Iraq from 2016 to 2019, told AGBI in March.

Last October PIF chairman Crown Prince Mohammed Bin Salman announced the sovereign fund would create five companies to invest in Iraq, Bahrain, Jordan, Oman and Sudan. These will invest $24 billion combined, he said.

The PIF’s Saudi Egyptian Investment Company launched in August 2022. It invested a total of $1.3 billion in four Egyptian companies the same month, across fertilisers, chemicals, cargo transport and fintech, Reuters reported.