Iraq’s instability has weighed heavily on its oil exports. That’s caused many oil companies, including some Canadian oil stocks, to hold off on investing in the country.

However, the situation has presented some real bargains for foreign firms willing to take larger interests in Iraq. For example, China’s Sinopec recently paid $8 billion U.S. for Addax Petroleum, which was developing the huge Taq Taq oil field in Iraq’s northern Kurdistan region.

(See below for an update on a Canadian oil stock with a new presence in Kurdistan. We’ve updated our view on this company in the latest Stock Pickers Digest.)

The situation in Iraq will likely remain volatile. That’s why we recommend that only highly aggressive investors consider buying shares of junior firms that focus on the country. Moreover, as with all speculative investments, we recommend that such stocks make up only a very small part of your overall portfolio.

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This Canadian oil stock’s got an edge in the race for Iraqi oil

Recently, ShaMaran Petroleum (Toronto symbol SNM), has shifted its focus toward producing and exploring for oil in Iraq. In the current Stock Pickers Digest, our newsletter devoted to more aggressive investments, we update our view of this Canadian oil stock’s prospects.

ShaMaran was formerly known as Bayou Bend Petroleum. It recently agreed to buy stakes in three oil-exploration properties in an area of Iraq’s Kurdistan region known as the Zagros Folded Belt. This part of the country could contain as much 45 billion barrels of oil.

Lundin Group connections help lower risk of operating in Iraq

Although Kurdistan is the most stable part of Iraq, operating there still entails considerable political risk.

However, ShaMaran is well equipped to handle the uncertainties that come with its Iraqi projects. The company is part of the Lundin Group of Companies, which gives it easier access to capital than most other junior-oil firms. What’s more, Lundin will bring its technical expertise to ShaMaran’s Iraqi properties.

Moreover, ShaMaran isn’t short on experience in operating in Iraq: the Canadian oil stock’s new chief operating officer was formerly Addax Petroleum’s general manager in Kurdistan, and was involved in the development of the Taq Taq field.

We’ll continue to update our advice on aggressive resource firms like ShaMaran in our Stock Pickers Digest newsletters and hotlines. Click here to learn how you can get one month free when you subscribe today.