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Why Iraq has to stay in business

Iraqi Southern Oil Company engineers look towards the flares in the Zubair oil field in southern Iraq.
Essam-Al-Sudani | AFP | Getty Images
Iraqi Southern Oil Company engineers look towards the flares in the Zubair oil field in southern Iraq.

The presence of U.S. troops in Iraq is "of vital importance" as the troubled country needs to keep its economy going, Baroness Nicholson, the U.K.'s trade envoy to Iraq, told CNBC.

"The future of Iraq is in trade and industry and business – to get to that stage, I fear that more military muscle is required," she warned.

There has been an increase in the U.S. military presence in Iraq this week, amid ongoing concerns about advances made by terrorist group Islamic State in the country, which have displaced around three million Iraqis from their homes.

Read More US embracing a new approach on battling ISIS in Iraq

The U.S. had pulled its troops out of Iraq in 2011, but returned last year after the Islamic State in Iraq and Syria (ISIS) captured Mosul, the second-largest city in Iraq. Since then, the U.S. has spent roughly $9.1 million per day on the fight against the terrorist group, according to figures announced by the Pentagon Thursday.

Nicholson, who is chair of the Iraq Britain Business Council, which includes companies like Shell, BP, Exxon and Standard Chartered, praised those businesses which are continuing to operate despite the "difficulties" and "traumas" of ongoing conflict in the country.

"There are many places which are completely peaceful (in Iraq)," Nicholson argued, pointing out that the oil-rich south of the country has stayed out of the conflict.

Read MoreIraqi PM Haider Al-Abadi Says Forces Lost 2,300 Humvees to ISIS

She conceded that there is a "lot of frustration in oil and gas" companies about the situation in the country.

"Corruption is the serpent around the neck of countries like Iraq," Nicholson said.

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