meed-logo

line1 line2 line3
SIGN IN / REGISTER

Iraq’s energy sector steadily expands

15 May 2023

MEED's latest coverage on Iraq's energy projects market includes:

> PIPELINE STOPPAGE: Turkiye yet to respond to Iraqi oil request
> CHEMICALS: Iraq continues technical studies for $8bn chemical project
> UPSTREAM DEVELOPERS: No place like Iraq for international oil firms
> OIL TRAINS: Key Iraq oil project units arriving in third quarter
> GAS: Iraq gas project on track for commissioning this year
> INVESTMENT: Total deal could lead to project boom in Iraq
> RUMAILA FIELD: BP and PetroChina prepare to award Iraq oil contract

 

Iraq's oil and gas projects market has steadily expanded over recent months, with the total value of the country's active oil, gas and chemical projects rising by nine per cent since the start of 2020.

As of 2 May 2023, Iraq’s active oil, gas and chemical projects were worth an estimated $143.9bn, up from $132.2bn on 7 January 2020, according to data collected by the regional project-tracking service MEED Projects.

Over the period, in nominal terms, the country’s energy project market expanded by $11.7bn, which is far larger than some of its regional competitors, but also lagging behind some key markets that are continuing to see a dramatic expansion in project activity.

In terms of energy project market expansion, Iraq has outperformed countries such as Algeria, Kuwait and Libya.

Countries that have performed far better than Iraq include Egypt, Qatar, Saudi Arabia and the UAE.

Over the period, energy project activity has surged in Saudi Arabia, which overtook Iraq to become the region’s largest market for hydrocarbon projects in mid-2022.

Since the start of January 2020, the total value of Saudi Arabia’s active oil, gas and chemical projects has increased by $61.3bn, rising from $112.7bn to $174.1bn.

Over the same period, the total value of Egypt’s active oil, gas and chemical projects sector has expanded by $46.6bn, according to MEED Projects, rising to $136.1bn.

Nations such as Saudi Arabia and Egypt have made ground on Iraq in terms of the size of their energy project markets, partly by taking advantage of Europe’s efforts to shift away from Russian energy imports.

They are also investing in hydrocarbon and chemical technologies that will likely see increased demand during the ongoing global energy transition, such as upstream gas production, the production of the precursors to plastics, and ammonia production.

Political uncertainty

While Iraq has seen its energy projects market steadily expand, it has missed out on the dramatic growth seen in Saudi Arabia and Egypt due to a range of factors.

A key factor that has hobbled Iraq’s expansion over recent years has been political instability and an inability to make critical policy decisions regarding the country’s economy.

In 2022, the caretaker government failed to pass a budget amid political wrangling. The interim parliament, which had limited access to funds, passed a $17bn emergency package called the Food Security and Development Bill, but was not mandated to make important decisions about major projects.

Multi-year budget

From a political perspective, there is reason to be more optimistic about Iraq’s ability to make future investment decisions due to the finalisation of a three-year budget law in March this year.

A draft budget of ID197.82tn ($152.17bn) was announced for 2023, with an agreed operational expenditure of ID150.27tn ($115.59bn), and an investment expenditure of ID47.55tn ($36.58bn).

The budget is drafted to allow it to be repeated in 2024 and 2025. It is the first time an Iraqi government has drafted a multi-year budget, having typically passed one-year budgets.

Ahead of the budget agreement, Iraq made a string of major project announcements. These include plans to revive the $8bn Nebras petrochemicals complex in Basra.

The multi-year budget should also allow for more strategic projects to pass over the coming months, allowing Iraq to adapt to changing market conditions, including the global energy transition and shifting dynamics in Europe and Asia.

Iraq has already signalled that it is looking to modernise its downstream oil sector, improving the complexity of existing refineries and building new facilities.

Gas projects

In terms of gas sector projects, progress will likely be made on existing projects to capture gas from oil fields that would otherwise be flared. More projects of this type could be announced shortly.

Iraq and its international partners are likely to prioritise these projects because they provide increased gas supplies and new revenue streams and have a positive environmental impact.

Iraq-Turkiye tensions

Although the political outlook is improved by the increased certainty regarding annual budgets, the country’s energy projects market could experience growing disruption over the coming months due to tensions between Iraq’s federal government, the Kurdish Regional Government (KRG) and the government of Turkiye.

At the end of March, in the wake of a ruling by the International Chamber of Commerce Court of Arbitration last month, the oil export pipeline that extends from the north of Iraq to the Turkish port of Ceyhan was shut down.

The pipeline is a key export route for Iraq. When operating normally, it transports 400,000 barrels a day (b/d) from Iraqi Kurdistan and 70,000 b/d from the rest of Iraq.

On 4 April in Baghdad, Iraqi Prime Minister Mohammed al-Sudani and the Prime Minister of the Iraqi Kurdistan Region, Masrour Barzani, signed a temporary agreement designed to restart oil exports from the north of the country.

Despite this, after more than a month, oil exports via the pipeline are yet to resume.

The lengthy stoppage and lack of clarity over when exports will recommence have cast a shadow across Iraq’s oil sector, forcing oil fields in the north of the country to seal wells and stop production and putting the future of planned upstream projects in doubt.

While there remains a cause for concern regarding political stability in Iraq, the fundamentals for the country’s oil and gas sector remain sound.

Iraq's state-owned oil companies and their international partners have shown in the past that they can negotiate difficult political and security situations, and the country will likely be able to continue to steadily grow its energy projects market over the months to follow.

MEED's June 2023 special report on Iraq includes:

> GOVERNMENT: Sudani makes fitful progress as Iraq's premier
> ECONOMY: Iraq hits the spend button
> POWER: Iraq power projects make headway
> UPSTREAM DEVELOPERS: No place like Iraq for international oil firms
> CHEMICALS: Iraq continues technical studies for $8bn chemical project
> SOLAR: Total continues 1GW Iraq solar talks
> TRANSPORT: Baghdad approves funds for metro and airport projects

 

 

https://image.digitalinsightresearch.in/uploads/NewsArticle/10825124/main.gif
Wil Crisp

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Houthi truce collapse widens Gulf risk map

    15 July 2026

    Register for MEED’s 14-day trial access 

    The Houthis’ declaration ending the de facto truce with Saudi Arabia has significantly increased the likelihood of renewed attacks on Red Sea shipping and regional infrastructure, broadening the threat environment beyond the Strait of Hormuz.

    S&P Global Market Intelligence says the 13 July exchange is best understood as a potential widening of the renewed US-Iran escalation cycle into the Yemen and Red Sea theatres.

    Houthi claims that Saudi Arabia was responsible for a strike on Sanaa International airport have not been independently confirmed. Saudi Arabia had not formally commented at the time the analysis was written.

    The Yemeni militant group is likely to use the incident as a trigger that allows it to justify renewed military action while aligning with Iran’s wider effort to impose costs on US and Gulf interests, according to the research firm.

    The decision to declare an end to de-escalation with Riyadh materially increases the likelihood of further missile and unmanned aerial vehicle (UAV) activity against infrastructure near the Yemen-Saudi border, as well as renewed pressure on maritime routes in the Red Sea and Bab Al-Mandab.

    Aviation exposure

    The resumption of direct hostilities broadens the range of vessels and ports likely to be subject to Houthi targeting, and presents severe risk to airports and stationary aircraft, S&P Global Market Intelligence says.

    While the Houthis would probably not intentionally down civilian aircraft, there is a significant risk to aircraft in flight, particularly at lower altitudes close to airports, due to incoming UAVs and missiles and interceptor activity.

    The broader risk is to regional logistics rather than any single target set, the analysis says.

    If escalation around the Strait of Hormuz coincides with renewed Houthi activity in the southern Red Sea, Bab Al-Mandab and the Gulf of Aden, commercial operators face a more complex dual-chokepoint environment, with the added likelihood that the Houthis will seek to target Hormuz bypass infrastructure across the Gulf.

    That would raise the likelihood of shipping delays, higher insurance costs, more conservative routing decisions and greater interest in alternative corridors or bypass routes.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17680608/main.jpg
    Colin Foreman
  • Saudi Downtown awards Al-Khobar infrastructure deal

    15 July 2026

    Register for MEED’s 14-day trial access 

    Saudi Downtown Company, a wholly owned subsidiary of the Public Investment Fund (PIF), has awarded a contract for infrastructure works in downtown Al-Khobar.

    The contract was awarded to local contractor Ansab General Contracting Company.

    The scope of work includes the design and development of overall infrastructure, road networks and street lighting for the downtown Al-Khobar project.

    Saudi Downtown Company was officially launched in 2022 by Saudi Crown Prince Mohammed Bin Salman Bin Abdulaziz Al-Saud, who is also chairman of PIF.

    At the time, the company announced plans to develop downtown areas in 12 cities across the kingdom: Medina, Al-Khobar, Al-Ahsa, Buraidah, Najran, Jizan, Hail, Al-Baha, Arar, Taif, Dumat Al-Jandal and Tabuk.

    SDC’s mandate is to develop more than 10 million square metres of land across its projects

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17677176/main.jpg
    Yasir Iqbal
  • Saudi Arabia opens third round of gas-fired IPPs

    15 July 2026

    Register for MEED’s 14-day trial access 

    Principal buyer Saudi Power Procurement Company (SPPC) has opened the qualification process for the third round of conventional independent power projects (IPPs) using combined-cycle gas turbine (CCGT) technology.

    The round is being tendered under the supervision of the Ministry of Energy. Each plant will be built with provision for carbon capture unit readiness, allowing the technology to be deployed at a later stage.

    Each project will be developed on a build-own-operate (BOO) basis, with the winning consortium taking 100% equity in a special purpose vehicle (SPV) set up to develop and operate the plant.

    Each SPV will sign a power purchase agreement with SPPC, which is licensed by the Saudi Electricity Regulatory Authority (SERA) to prepare preliminary studies, tender and award IPPs, and purchase electricity from energy projects in the kingdom.

    The programme forms part of Saudi Arabia’s Circular Carbon Economy approach, which underpins the energy sector element of the Vision 2030 strategy. Riyadh is displacing liquid fuels with natural gas in power generation to cut emissions intensity, while designing new plants so that carbon capture equipment can be retrofitted in support of national emissions targets.

    In April, Acwa and Saudi Energy (formerly Saudi Electricity Company) signed a 31-year power purchase agreement (PPA) with SPPC for the Rabigh 2 IPP expansion.

    The project involves the development of a CCGT plant in the Mecca region. It will have a total capacity of 2,313.5MW.

    The contract is valued at SR11.5bn ($3.07bn), the companies said in separate stock exchange filings.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17676286/main.jpg
    Colin Foreman
  • Dubai selects contractor for Al-Maktoum airport people mover

    15 July 2026

     

    Register for MEED’s 14-day trial access 

    Dubai Aviation Engineering Projects (DAEP) has selected a contractor to deliver the automated people-mover system as part of the first phase of the $35bn expansion of Al-Maktoum International airport.

    A team of Japan’s Mitsubishi Corporation and Indian contractor Larsen & Toubro is the selected contractor.

    The automated people-mover system will serve as a critical facility for operations at Al-Maktoum International airport. The system will run under the apron of the entire airfield and the airport’s terminals. It will consist of multiple tracks, taking passengers from the terminals to the concourses.

    Four underground stations will be built as part of the first phase. The overall plan includes 14 stations across the airport.

    The firms submitted the bids for the project in July last year, as MEED exclusively reported.

    The contract is the latest in a series of awards signed by DAEP recently. DAEP has awarded contracts valued at about AED13bn, with construction works currently under way on several airport packages.

    These include enabling works, the second runway, and the initial structural foundations for passenger terminals and gates.

    Upcoming awards

    In June, DAEP said that it will award contracts worth over AED55bn ($15bn) by the end of this year for construction works at Al-Maktoum International airport.

    The projects slated for contract awards include the substructure works for the Western Passenger Terminal, the fourth aircraft concourse building and the baggage handling system, in addition to the superstructure works for the Western Passenger Terminal and the first, second and third aircraft concourses.

    The packages also encompass long-span structural frameworks for buildings covering about 1.5 million square metres (sq m), infrastructure works for the southern airfield area, and power generation and district cooling plants supporting the construction programme.

    The award of the facade and roofing packages is also planned for this year.

    Construction progress

    In May last year, MEED exclusively reported that DAEP had awarded a AED1bn ($272m) deal to UAE firm Binladin Contracting Group to construct the second runway at the airport.

    The enabling works on the terminal were awarded to Abu Dhabi-based Tristar E&C.

    Construction on the project’s first phase is expected to be completed by 2032.

    Construction on substructure works began in November last year, when DAEP formally selected a contractor to deliver the package.

    The government approved the updated designs and timelines for its largest construction project in April 2024.

    In a statement, the authorities said the plan is for all operations from Dubai International airport to be transferred to Al-Maktoum International within 10 years.

    According to an official description on DAEP’s website, the expanded airport’s West Terminal will be a seven-level, 800,000 sq m facility with an annual capacity of 45 million passengers.

    It will be the second of three terminals at Al-Maktoum International airport.

    In September 2024, MEED exclusively reported that a team comprising Austria’s Coop Himmelb(l)au and Lebanon’s Dar Al-Handasah had been confirmed as the lead masterplanning and design consultants on the expansion of Al-Maktoum airport.

    The airport’s construction is planned to be undertaken in three phases. The airport will cover an area of 70 square kilometres south of Dubai and will have five parallel runways and 430 aircraft gates.

    It will be five times the size of the existing Dubai International airport and will have the world’s largest passenger-handling capacity of 260 million passengers a year. For cargo, it will have the capacity to handle 12 million tonnes a year.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17674721/main.png
    Yasir Iqbal
  • Chinese contractor wins Kuwait investment authority HQ

    15 July 2026

    Register for MEED’s 14-day trial access 

    Beijing-headquartered China State Construction Engineering Corporation (CSCEC) has won a contract to build the permanent headquarters of the Kuwait Direct Investment Promotion Authority (KDIPA).

    The contract covers the construction of a 275-metre, 55-storey office tower located in Kuwait City’s Sharq district. The project is expected to be completed by 2028.

    According to results published on the Kuwait Central Agency for Public Tenders (Capt) website, the firm initially submitted a bid of $233m, as MEED reported in January. The tender was issued on 19 October 2025 and bids were submitted on 18 November, MEED reported.

    The contract is the latest in a series of high-profile projects signed by CSCEC in the GCC region this year. Last month, it won a contract to deliver the Janadriyah cultural district at Qiddiya entertainment city on the outskirts of Riyadh. The contract was awarded by gigaproject developer Qiddiya Investment Company (QIC).

    The scope covers the construction of six structures, including a heritage building, a gateway hotel, a wadi hotel, a creative hub, a community centre and an open-air market.

    In June, MEED exclusively reported that QIC had awarded CSCEC a contract to build a new transport hub at Qiddiya entertainment city.

    The project is located within the resort core zone of the development.

    Kuwait market overview

    UK analytics firm GlobalData expects Kuwait’s construction industry to average annual growth of 4.9% in 2026-29, supported by government investment in renewable energy and transport infrastructure.

    In September 2025, Kuwait’s government allocated KD1.3bn ($4.2bn) for 141 projects, as part of its capital spending during the fiscal year 2025-26. This allocation was intended for 162 current projects and 17 new projects.

    According to government data, as of September 2025, the country had around 300 active projects, valued at about KD35.3bn ($115bn), with large infrastructure projects making up nearly half of that total.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17674440/main.jpg
    Yasir Iqbal