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ERBIL, Kurdistan Region - Completion of a giant petrochemical project in Basra province was on the agenda when the Iraqi cabinet convened on Sunday. The government is looking for another international company to partner on the project days after Shell withdrew, citing a policy change.
Iraq’s Prime Minister Mohammed Shia’ al-Sudani on Sunday chaired a cabinet meeting that “focused on the completion of the Nebras Petrochemical Project, a project that has experienced delays since 2015. The government is prioritizing its implementation as part of economic reform efforts,” read a statement from Sudani’s office.
Shell, a UK-based group of energy and petrochemical companies, in 2015 signed an agreement with the Iraqi government to build the Nibras petrochemicals plant in Basra. The plant would be the fourth-largest in the world and would make Iraq the largest petrochemical producer in the region. It was expected to come online in six years, but its launch has been delayed several times, reportedly due to cash shortages.
In the latest delay, Iraq’s Ministry of Industry and Minerals on Tuesday said in a statement that Shell had apologized for being unable to go ahead with the project due to “a change in its policy in investing in petrochemical industries.
Shell has not publicly commented on its withdrawal from the vital project.
“Shell expressed its commitment to continue its work in Iraq, which has been ongoing for a decade, and reaffirmed its interest in expanding investment in associated gas. This was confirmed during a meeting between the prime minister and the company's CEO, which took place during His Excellency's recent visit to the Kingdom of the Netherlands,” added the statement from Sudani’s office.
Sudani traveled to the Netherlands on Thursday at the invitation of Dutch Prime Minister Mark Rutte.
Sudani’s office also noted in its statement that the PM “instructed the Ministry of Oil to provide a report detailing the international companies interested in participating and executing the project, ensuring they meet the necessary specifications and standards for the project facilities.”
Shell will continue supporting the Basra Gas Company, a joint venture between Baghdad (51 percent), Shell (44 percent), and Mitsubishi (five percent) aimed at achieving Iraq’s energy independence, especially with gas, according to the Iraqi government.
In 2015, Iraq’s then Industry Minister Nasser al-Esawi said during a press conference that Nibras Complex would be “one of the largest (foreign) investments (in Iraq) and the most important in the petrochemical sector in the Middle East,” Reuters reported at the time. The minister added that the project would produce 1.8 million tonnes of petrochemical products annually.
Shell would own 49 percent of the plant while Iraq would have 51 percent. The factory was expected to cost around $8.5 billion and make a net amount of nearly $1.4 billion annually, in addition to creating thousands of jobs.
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