DLA Piper advises on major Iraqi joint venture agreement
- Iraq: Tuesday, October 23 - 2012 at 11:08
- PRESS RELEASE
DLA Piper, the global law firm, has advised on a major deal in Iraq, to create a specialised oil and gas free zone. The firm acted on behalf of Basra International Oil and Gas Hub (BIOGH) on a joint venture agreement with the Iraqi Free Zone Authority, a unit of the Ministry of Finance.
BIOGH, a privately owned company, will work closely with the Free Zone Authority to provide a number of benefits and incentives for the international oil and gas sector including tax exemptions for the term of the agreement as well as customs and employment benefits.
This is the first deal of its kind in Iraq and the second largest oil and gas free zone in the world. It is expected to create around 15,000 jobs, 60% of which will be for local Iraqis. The development aims to create the logistical support for the services needed by the international oil and gas sector.
"The completion of this deal marks the beginning of an exciting stage in Iraq's development and ensures the country is significantly closer to having a sustainable economy based on establishing an in-country supply chain for servicing the requirements of the oil and gas sector," commented Abdul Aziz Al-Yaqout, Regional Managing Partner, DLA Piper Middle East LLP.
"As well as job creation, this deal will bring a stream of inward investment to Iraq. As the third largest oil producer in the world, Iraq is a key market and we hope this deal is the catalyst needed to further jump start the economy."
Salem Chalabi, Head of the Iraq Desk, added: "This deal is significant both in terms of scale and scope, developing what is a massive site in Southern Iraq and encouraging the growth of the Iraqi economy. Not only will it create inward investment opportunities, it will bring jobs to Iraqis and stimulate demand for oil services businesses. Iraq is an important market for the firm and we anticipate further deals of this kind in the future."
In a joint statement, John Moore and Tom O'Donnell, Directors of Basra International Oil and Gas Hub, added: "This deal represents a significant leap forward for Iraq's oil and gas supply chain sector and we expect it to result in a huge influx of inward investment from international manufacturers, stockists and service providers to the oil and gas industry majors. DLA Piper demonstrated expert knowledge not just of the complexities of the transaction, but also of the local market conditions in Iraq, with a deft hand in guiding the negotiations, together with a grasp of Iraqi law. The firm acted as a trusted adviser throughout the process and completed the joint venture agreement within a relatively short space of time."
Structured under the Iraqi Free Zones Law of 1998, the deal was completed within a two-year period.
DLA Piper was the exclusive in-country legal adviser, with a team led by Salem Chalabi, Head of the Iraq Desk, DLA Piper Middle East.
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