Empowering Iraq in Three Steps: Localization, Knowledge Transfer and Partnerships

Empowering Iraq in Three Steps: Localization, Knowledge Transfer and Partnerships

November 25, 2012 at 01:11pm

In July, Iraq passed a historic milestone by successfully raising oil production to an average of more than 3 million barrels per day. Since then, it has continued to increase that level, raising it to more than 3.2 million barrels per day in September. This is the first time Iraq has reached such levels in decades.

At the same time, the International Monetary Fund forecasts that Iraq’s GDP growth will reach 14.7% in 2013, and in its recent Iraq Energy Outlook, the International Energy Agency (IEA) puts forward three scenarios for growth in the country’s oil and natural gas industries, including its Central Scenario, which sees Iraqi output capacity rise to 6.1 million barrels per day (mmbpd) by 2020. In this scenario, the IEA says Iraq would account for approximately 45% of anticipated growth in global output. The IEA says such a level of output would generate average annual revenues for the country in the range of $100 billion to $200 billion during the 2012-2020 period.

To achieve this, Iraq is looking to build infrastructure across all segments of the oil & gas, downstream processing, transportation and power generation spectrum. The IEA says that Iraq’s investment broadly across the energy sector will have to be at least $25 billion a year for the rest of this decade. Among other things, this will help achieve the 6.1mmbpd level.

While presenting enormous challenges, allocating such large sums and developing so much new infrastructure also opens up wide horizons of opportunity for partnership. This includes putting in place a model for sustainable economic development that draws on the various strengths and resources that local and international partners bring to such a national project.

From its international partners in particular, Iraqi ministries and other local organizations and institutions should look for three things: localization, knowledge transfer and partnership.

But what does localization, knowledge transfer and partnership really mean? Localization is the process of making ideas and technologies relevant to specific markets. It also refers to the financial commitment and investment that multinational companies make in local markets – efforts that generally lead to greater knowledge transfer and deeper partner relationships.

Knowledge transfer is about how international organizations and companies formalize and systematize the way they train local staff, and share insights regarding emerging technologies, deeper trends and fundamentals driving new products and services.

While partnership seems the easiest to define; yet, a truly successful partnership involves a complex mix of mutual respect and trust, a shared vision and passion, complementary assets and needs, an understanding that both parties can and will learn from the other, and a high-level, institution-wide commitment within both organizations to the partnership itself.

Only a development model based on these pillars will be sustainable in the true sense and unlock the full potential of technologies, systems and processes implemented in the country.

In Iraq, GE is actively implementing all three pillars: in 2011 it opened three offices (building on 40 years in the country); it is driving efficiencies in the nation’s oil fields and delivering power generation technology that will generate over 10 gigawatts of electricity when fully installed; and GE has imparted advanced training to more than 100 Iraqi Ministry of Oil employees through its Oil & Gas University.

GE also will be present at the 3rd Basra Oil & Gas International Conference and Exhibition, to be held December 6-9, 2012 at the Basra International Fairground. The country’s largest oil & gas industry conference, the Basra event is supported by Ministry of Oil and is the place where oil & gas companies gather to engage, network, discuss and debate core industry issues.

For more on the Basra event, click here, and for additional information on GE’s work in Iraq, click here.

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