Your Excellency, Ministers, distinguished guests, it is a great honour to speak here today at the 4th Kurdistan-Iraq Oil and Gas conference.
Iraq’s energy potential matters to us all. Iraqi oil and gas can help make global energy supplies more secure, while a prosperous Iraq is one the best guarantees of stability in the region.
This event provides an important platform for further collaboration between all the experts and decision-makers dedicated to unlocking that potential.
The UK has strong historical links to the Kurdistan Region of Iraq. It was a British Government which instigated the no fly zone above Kurdistan following the first Gulf War; we were key allies in two wars against Saddam and we stand with you today in the fight against ISIL.
We remain committed to the development of a long-term partnership with the KRG and the strengthening of commercial, cultural and educational links.
And we remain fully committed to the stability and security of the Kurdish Region of Iraq, including its battle against ISIL This commitment is shared by my Ministerial colleagues across government.
Since June the Foreign Secretary, Secretary of State for Defence, Secretary of State for International Development and the Minister for the Middle East have all visited Erbil to offer our support.
The people of Kurdistan have an important role to play in building the united, peaceful and prosperous Iraq that we all want to see. We applaud the creation of an inclusive government in Baghdad, including senior Kurdish Ministers.
In particular, we welcome the recent agreement reached between the Government of Iraq and the Kurdistan Regional Government on budget allocations and energy exports. This took courage and flexibility by the Government of Iraq and the Kurdistan Regional Government leaders in working through these issues to reach an agreement.
This deal will not only pave the way for an increasingly conducive political environment, but will also bring enhanced economic benefits across all of Iraq’s communities.
I hope that this agreement will lay the foundation for increased cooperation between the Government of Iraq and the Kurdistan Regional Government in other areas.
This deal comes at a time when unity is vital to tackling Iraq’s challenges, from the fall in oil prices to regional events, but especially when it comes to tackling the threat which ISIL poses. Only through support and partnership can responses to these threats be effective and inclusive.
The KRG-Iraqi Outlook
Iraq remains a country of great potential and resource wealth. Back at the world’s energy top table, it has a critical role to play in meeting the world’s future demand for oil. I know that the fall in oil prices is having an impact on Iraq. Russia’s violation of Ukraine’s sovereignty has also placed a renewed emphasis on energy security and international cooperation in the UK, Europe and elsewhere. It is vital therefore that we maintain a long-term perspective and continue to focus on investment and the future health of the energy sector.
Despite the substantial recovery we have seen from US oil production in recent years, this is forecasted to peak in 2020, after which, the world is expected to become ever more dependent on Iraqi supply. By 2040, Iraq’s crude oil production is projected to almost treble to just over 8 million barrels per day– the largest increase of its kind worldwide.
Reserves in Kurdistan play a significant role in this increase. The region is not only thought to be one of the largest untapped areas of oil in the world, but also has significant gas potential. Development and export opportunities in the Kurdistan region will play a very important role in the future energy sector of a united Iraq.
In order for this to become reality, significant investment is required now, but we know that challenges remain. Overcoming these will require a concerted effort by the Iraqi government, the Kurdistan Regional Government and all Iraq’s different groups. The strongest response is a unified one.
A prosperous energy sector is vital in supporting economic development throughout Iraq. Revenues from the energy sector must be used for Iraq’s broader development – investment in infrastructure, improved services for the Iraqi people, education and healthcare. All parts of the country and population must see investment and the right conditions for prosperity, creating a vibrant private sector. Iraq’s economic development will be vital for its political future and stability.
That puts heavy responsibility on all of us to support Iraq realise its energy potential; because it is the foundation for a brighter future. That is why the National Energy Strategy published last year by the Iraqi Government is so significant. I pay tribute to those who led that work and produced a comprehensive blueprint for the future.