Iraq must invest in water, power to grow
LONDON/HOUSTON (Reuters) - Iraq must invest more in its power and water infrastructure to achieve sustained growth, or the oil and gas sectors will suffer, U.S. engineering company Fluor Corp (FLR.N) said on Monday.
"Everyone keeps talking about oil and gas, but power and water are extremely important to the development of Iraq, and these are underdeveloped there," said Peter Oosterveer, group president for energy and chemicals at Fluor.
"If all projects (in the oil and gas sector) kick off, then there certainly will be a shortfall in power and water supplies in Iraq," he told the Reuters Global Energy and Climate Summit in London.
Oosterveer also said similar problems are likely to occur in other countries with a lack of fresh water reserves.
But he is upbeat on Iraq's economic prospects. "Some even see Iraq outpacing China in terms of growth in coming years," he said, adding that even if it did not reach double-digit economic growth, "we are generally optimistic about Iraq."
Fluor, the largest publicly traded U.S. engineering company, is involved in developing the West Qurna oilfield near Basra together with U.S. oil major Exxon Mobil Corp (XOM.N).
Fluor believes its work for the U.S. military in Iraq has put it in prime position to win oil projects there, though its customers recognize that the company's expertise is spread across two different divisions.
"Our ability to hit the ground running in Iraq, which is something that they frankly weren't able to do, was a big plus for us, and that is why some of the other oil companies are talking to us as well," Oosterveer said.
Looking at Fluor's potential workload overall, Oosterveer said the outlook remains positive, but quite a few projects have taken longer than expected to get approval from clients in the past year.
Most clients are still working on the assumption of oil at $70 to $80 per barrel, whereas nobody is firm enough about $100 per barrel to put it in their business plan, he said.