Investor confidence unshaken by Iraq fighting

|TAP Special|Fighting in Iraq has had little impact on the overall market confidence in the Gulf as investors do not see any direct impact on the GCC, as a result of which currency forwards and credit default swaps have not risen. But several Gulf stocks with exposure to Iraqi Kurdistan could face fresh pressure in coming days.

Abu Dhabi National Energy Co (TAQA) has announced suspension of activity at the Atrush Block in Kurdistan because of the instability. But Dana Gas said last week that the company’s operations in Kurdistan were continuing normally with no security threats so far.

The Taqa-operated Atrush Block is located 85 km northwest of Arbil, Iraq’s Kurdish capital, is expected to initially produce approximately 30,000 barrels of oil per day (bpd) with first oil expected by early 2015. The company said it remained committed to oil and gas exploration of the field and still expected production to start by 2015.

 

Emirates airlines said on Saturday it had suspended flights to the Iraqi Kurdish capital Arbil due to increased security concerns. But an Emirates spokesman said the airline will continue to operate daily, non-stop flights between Dubai and Basra, along with its four-times weekly service to Baghdad.

Telecommunications operators Zain and Ooredoo also have major exposure to Iraq via subsidiaries. In European markets, Iraqi Kurdistan-focused companies’ shares fell sharply on Thursday and Friday as investors reassessed the region’s security.