Foreign direct investment and its impact on the oil sector in Iraq

Abstract EN

There is no doubt that FDI has a significant effect on the oil sector in Iraq, mainly when the political system was changed since April 2003.

The Iraqi economy has converted from closed economic towards an openness economy.

Hence, the Iraqi economic system has been reformulated, which includes investment laws to encourage and attract FDI in all the economic sectors, the petroleum sector particularly.

The study aims to demonstrate the role of FDI in developing the oil sector in Iraq and how to increase productivity, besides, whether FDI has negative or positive impacts.

With regard to the research hypothesis, indicated that foreign direct investment has a positive role in developing the Iraqi oil sector because it has the availability of financial and advanced technological capabilities when compared with national companies.

Consequently, one of the essential conclusions which reached the study is that the foreign direct investment in the oil sector relatively led to increasing the production capacities of crude oil.

Therefore, the most significant recommendation in this academic paper is that the Iraqi government should attempt to provide more investment facilities for foreign direct investors in oil sector as well as the warranty of their property rights.

However, the economic feasibility studies for oil contracts that are made with the International Oil Companies (IOCs) must be carried before they enter into implementation.