[I]n Kurdish-run Iraq, three Western oil firms, Genel Energy, DNO and Gulf Keystone, continue to pump out crude that is piped or sent by road to Turkey. Their combined market value plunged after IS seized the city of Mosul in June, but has recovered to $8.3 billion, down 29% from the start of the year—a hefty fall, but not so bad for firms on the front line of fanaticism.“We’ve gone from a place that was a bit tricky in terms of security to a full-on war,” says the chief of one firm. But he is confident that the Kurdish region’s well-armed militia will protect his business. So far investors have tweaked their financial models, not run for the door. Analysts now assume a cost of capital of 15%, up from 12.5% before IS struck, he says….
For a start, it is possible to grind out profits in troubled places. Lafarge, a French cement giant, has operations across the Middle East and north Africa. Sales there have risen slightly since 2009 and gross operating profits are now $1.5 billion a year. MTN, a South African mobile-telecoms firm with a thirst for danger, has a division in Syria (and in Sudan and Iran) where gross operating profits rose by 56% in the first six months of this year….
[But] And strife in Libya and Egypt has damaged north Africa’s hopes of becoming a production hub for Europe. Like countries, multinational companies have no permanent allies—only permanent interests.
Companies and geopolitical risk: Profits in a time of war, Economist, Sept 20, 2014, at 59