Remarks at the Business Forum Promoting Commercial Opportunities in Iraq

Hillary Rodham Clinton
Secretary of State
Dr. Ray Irani of Occidental Petroleum
Benjamin Franklin Room
Washington, DC
June 3, 2011

SECRETARY CLINTON: Thank you very much, Tom. And let me join in welcoming all of you here to the Ben Franklin Room on the 8th floor of the State Department where we are privileged to live and make history every single day. And I think this gathering is a very historic one, so I want to express my appreciation to all of our U.S. Government participants from, as Tom said, across the government, all of our American business leaders, and in particular, our friends and partners from Iraq. We are delighted to have all of you here.

And I want to thank Deputy Secretary Tom Nides, who came to the State Department from a long history in business as well as a deep understanding of the difficult strategic, political choices that confront us in the world today. And Ambassador Jeffrey, it’s very good to see you in Washington. Usually we see you on the other side of a video screen, so we’re delighted you could be here. And Ambassador, thank you for being with us, too, and thank you for all the work you do here in Washington representing your country.

Let me welcome Mr. Ghadban from the Prime Minister’s Office; Chairman Araji of the National Investment Commission, and Mr. al-Baker from the Ministry of Industry and Minerals. And we’re delighted that all of you could be taking part in this.

There’s another group that I just want to acknowledge briefly, and that’s a group of young people who are here from across the region of the Middle East and North Africa on an exchange program and are very committed to the political and economic reforms that are taking place across the region, so they hope someday perhaps to be in some of the important positions that our represented at this table in their own countries. And we’re delighted they could be with us.

President Obama and I and our government believe strongly that expanding economic opportunity is as essential as building democratic institutions. We think they go hand in hand. And in particular, it’s very important for people going through the changes that are sweeping the region and that Iraq has, in many ways, been a leader in demonstrating, to believe and to see that democracy delivers: Is your life better or not? Do your children have a better opportunity or not?

And this is clearly not a job for government alone. It is a very important partnership that has to be forged. Businesses like those represented here at this table create jobs, provide livelihoods, increase standards of living, give hope to individuals and their families. And what government should do, whether it’s in the United States or in Iraq, is to be a good partner, to help create the conditions for investment and growth that will be broadly spread and create a ladder of economic opportunity for those willing to work hard, to acquire the education and skills required in the modern world.

Now, we are entering a new phase in our relationship with Iraq, and we are very committed to making a major civilian commitment to Iraq’s future. We’ll be opening, as you know, and running consulates in Irbil and Basra, we’ll have civilian experts available to work with not only Iraqi counterparts, but also Americans and to support American businesses in the years to come, as we do in our diplomatic – especially our commercial diplomatic work all over the world. And so it’s time for the United States to start thinking of Iraq as a business opportunity. And the sacrifice that the Iraqi people have made for your freedom is one that we highly respect.

According to the IMF, Iraq is projected to grow faster than China in the next two years. Now, let me repeat that, because when I read it I said, okay, are you sure because we always think of China as being the juggernaut? But no, indeed, Iraq is projected to grow faster than China.

Now, nothing is set in stone. The decisions made by the government, made by businesses, could undo that prediction. And so in five years, we’d look back and say, well, why didn’t it happen? And it didn’t happen not because of divine intervention but because we all didn’t do the right things to make it happen. But Iraq has one of the largest customer bases in the entire Arab world. It has one of the world’s largest supplies of oil, and it has one of the best educated workforces in the region.

Today, Turkish, Chinese, French, Jordanian, Iranian companies are lining up to do business. But very honestly, we see too few American companies alongside our soldiers and our diplomats. Iraqis are looking to rebuild every sector of their economy, not only their oil sector but agribusiness, transportation, housing, banking, and many others. For example, Citibank is now engaging with Iraqi financial institutions and working with corporations who wish to invest in Iraq. Now, I do not want to sugarcoat the difficulties. I think, among friends, we need to have an honest conversation about what is it we all need to do to realize these very positive projections.

Now, one reason there are so many opportunities is because Iraq remains a tough environment. There are still significant security challenges, bottlenecks in infrastructure, unclear regulations, and, unfortunately, corruption. But as our Iraqi colleagues will tell you, they are working hard to make it easier to do business in Iraq for Iraqis and foreign investors alike.

Now, each company will make its own decisions about the costs and benefits, but we want to go on record unequivocally in encouraging American business to begin that process, and we will do everything we can to support you in it. Our embassies and consulates will be hubs that support commercial activity in every region of Iraq. The State Department will work hard to champion American companies, including through events like this one. USAID, Treasury, the Departments of Energy and Agriculture, OPIC, Ex-Im, and many other agencies have unique and proven experience that we can bring to the table to work with you.

Ambassador Jeffrey is working hard to establish an American Chamber of Commerce in Iraq, which would be another powerful advocate. Where we have American Chambers, we find they are very value-added. So we think that’s an incredibly important effort. And as President Obama has said, the greatest untapped resource in the Middle East and North Africa are its people. There’s no doubt about that. And we want to see Iraq have a strong democracy and a growing economy that provides stability and prosperity for the Iraqi people, and we need to work to make sure that the investments are there that will help Iraq chart that kind of future.

I also have to say a word about hiring women. I know that a lot of the best students in Iraqi universities happen to be women, and I hope that Iraq takes full advantage of half the population, ready to work, ready to roll up their sleeves to assist in the transformation of their country. And certainly my Ambassador-at-Large for Global Women’s Issues, Melanne Verveer, is here to talk specifically about some of the ways we are ready to support the integration of women into the economy.

Now, I’m very excited about what’s possible and I’m very hopeful about the future, but I also know, from having worked in many different countries on many different issues over too many years to remember, that the United States stands ready to be a good partner, we stand ready to encourage in every way we can. But ultimately these decisions are up to the Iraqi people: the leaders of the government, the leaders of industry, and, of course, Iraqi men and women who want that better future.

So I’m eager to hear from you in the very limited time that I have to be with you. Let me start with Dr. Ray Irani, whose company, Occidental Petroleum, was one of two American oil companies that won bids last year to rehabilitate Iraq’s largest oil fields. And Dr. Irani, I would very much like to hear your views.

MR. IRANI: Thank you, Madam Secretary. It’s my pleasure to be here with you. Let me say up front that our experience working in Iraq has been positive, and we’re very optimistic about the future of the country. As the Secretary said earlier, don’t expect to have a bed of roses in front of you. However, the people of Iraq as well as government are doing great job in moving forward under clearly difficult circumstances. Let me give you some details which may be useful to you.

First of all, if you look at the balance sheet of a country like Iraq, besides the wealth and natural resources that the country has, not only in oil and gas but in other natural resources, I think one of its strengths which we have been very pleasantly surprised, but not totally, is a human wealth that exists. I can’t overemphasize the fact that Iraq and the Arab Middle East has a cadre of very well-educated, talented people who are eager to serve and to be rewarded for their services, including, Madam Secretary, women. We have hired a number of women technical people in Iraq.

Now, moving on, the area where we are working is in southern Iraq. The oil field we operate at is called Zubair. It’s at the – not far from Basra and close to the Arabian Gulf. The reserves in the oil field which are operating with partnership from the Italian company ENI and Korea Gas, has well in excess of six billion barrels of oil reserve – probably more like ten billion. That’s a lot of oil. Now, when we took over that field just last February, like 16 months ago, the production was 180,000 barrels a day. Today, it’s producing 280,000 barrels a day. And we expect by the end of this year to get to 350,000 barrels a day. Our goal and the contract we have signed with the Iraqi Government encompasses taking that field to a production level in excess of a million barrels a day – actually, 1.2 million. That’s an increase of one million barrels by the year 2016, 2017.

We as well as other consortiums that operate in Iraq are optimistic about our individual capabilities to get to these levels. However, to achieve anything close to the targets that were mentioned earlier by the Iraqi representatives here, getting production levels over 10 million barrels, which is possible, several things have to happen. The infrastructure needs to be substantially improved in terms of electricity, in terms of water, in terms of pipelines which need to be expanded, in terms of export facilities, in terms of banking, and obviously, needless to say, in terms of security. We’ve been able to provide our own security to a great degree, and we have not had any incidents other than some people wanting high wages, normal things that happen whether you work in Buffalo, New York or Washington, D.C. But the security has to be improved. We have expats, Americans, other nationalities in Baghdad, we have in Basra, and we have it in our oil fields which are not too far from Basra.

As we look ahead, we would encourage the U.S. Government to remain engaged, and I’m pleased to hear, Madam Secretary, that that’s the plan because I don’t want the limited resources that the United States Government has to get too diluted in trying to help the spring movement that’s going on. I mean, I think that’s wonderful, but we’ve invested much in Iraq in terms of human sacrifices as well as financial sacrifices that we need to follow through post-2011 in terms of foreign aid, in terms of cooperation, in terms of encouragement.

Let me conclude by saying that any of you who wish to work in Iraq, you have to go visit the country. You can’t do it by sitting and having a list of what things are a problem. Yes, there are problems. But the opportunities are substantial to each one of you who are sitting around this table. I’ve had the privilege of meeting with Prime Minister Maliki several times. I know Ayad Allawi, who’s the other political party. I know several people in the government, and they’re interested to help. They have much on their plates and so do their colleagues that are sitting around the table. And you can tell by the remarks they have made how impressive they are. And they are representative of many of the people who are in Iraq.

So I would encourage you to look at opportunities there, and I think the rewards are there. So we are pleased to participate in the growth of Iraq. And whether we like it or not, to achieve the goals that Iraq has, financial resources are needed. And the energy sector is an important party to providing the financial whereabouts to invest in IT and other areas. And so we feel optimistic and we thank you for your attendance.

PRN: 2011/898