… the oil giant has opted for a dramatic exit, leaving Iraq’s dreams of petrochemical prosperity in the dust.
Posted by John Donovan: 14 Feb 24
Oh boy, Shell has done it again! After nearly a decade of dangling the carrot of investment in front of Iraq’s eager face, Shell has decided to pack its bags and leave the table, abandoning plans to build a mega petrochemicals plant in Basra. Just when you thought the plot couldn’t thicken any more, the oil giant has opted for a dramatic exit, leaving Iraq’s dreams of petrochemical prosperity in the dust.
“After an in-depth evaluation on the feasibility of the Nebras integrated petrochemicals complex with our government partners, Shell has decided not to proceed with the project,” Shell announced, sounding almost as if they had just decided to skip dessert. They cited reasons like “performance, discipline and simplification,” and the “high-grading of our chemicals portfolio.” Ah, the sweet sound of corporate speak meaning, “We’ve had a better offer,” or perhaps, “It’s not you, it’s me.”
The Iraqi ministry, still hopeful, confirmed Shell’s adieu but clung to the silver lining that the UK-based company would continue to support the project through its involvement in the Basra Gas Company (BGC).
Launched with fanfare and dreams of grandeur nearly a decade ago, the Nebras project was supposed to be the jewel in Iraq’s petrochemical crown. Initial agreements were signed, studies were conducted, and everyone was ready to roll. But like a soap opera, the project faced more stalls than a public bathroom, with Shell continually “evaluating” the scheme while Iraq waited by the phone for a call that never came.
Originally estimated to cost a cool $11 billion before someone found a calculator and revised it down to $8 billion, the project was a beacon of hope for Iraq’s under-developed petrochemicals industry. It promised thousands of jobs and a new revenue stream to a country that had once been a pioneer in the regional industry. But alas, sanctions, wars, and a general lack of investment left Iraq’s petrochemical dreams just that—dreams.
Shell, holding a 49% stake in the venture, seemed ready to transform Iraq’s industry. Ethane feedstock was to come from the BGC, a joint venture that sounded like a match made in heaven, processing gas produced at local oil fields. But like many a romantic comedy, the ending wasn’t what was expected.
As Shell bows out, citing a shift towards simplification over the complex web of investment and development, Iraq is left to ponder what could have been.
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