An additional $ 25 billion is flowing into Iraq’s budget from rising oil prices

ارتفاع أسعار النفط يوفر للعراق 25 مليار دولار

Baghdad – Mohammed Ali

3 June 2018

“Iraq will generate an additional $ 25 billion in revenue this year because of the high oil prices and the growing demand from its permanent customers in the Asian market,” said Ahmed Basri, technical adviser at Iraq’s Sumo Oil Company .

Al-Basri said that “Iraq was setting expectations of a margin of lower crude, but political developments and tensions in the region and other factors accompanied by the increase in prices in a manner is ideal for the oil-rich country.”

According to Al-Basri, “the rise in international crude prices could positively affect important sectors in Iraq that have been damaged by the war on terrorism, and it will negate Iraq’s need for further borrowing.”

Iraq currently produces more than four million barrels of oil per day, of which about 3.5 million, and seeks to increase production to more than 4.5 million this year.

Iraq hopes that the surplus money will be reflected in the rise in oil prices positively on the budget and contribute to the completion of part of the reconstruction needs of many cities that were destroyed by the invasion of an organization calling for large areas of Iraq in the summer of 2014, and then succeeded in the liberation of Iraqi forces in December First Last.

In February, according to a study by Iraqi and international experts, the Iraqi government estimated the actual need to rebuild the country at $ 88.2 billion over 10 years.

The Iraqi oil ministry is seeking to complete the signing of six contracts for exploration and development in the oil and gas patches in several regions of the country, according to a statement issued by the ministry, yesterday, saying that the Department of Contracts will continue to sign contracts, on Monday.
Three contracts were signed on Sunday with the UAE-based private Crescent Petroleum Company. Two contracts are due to be signed on Monday with China’s Jiujed and a contract with China-based United Energy Group.

According to the ministry’s statement, the signed contracts belong to areas in the south and east of the country, most notably Sinbad, Neptaneh, Huweiza and Khashm al-Ahmar in Basra and Diyala.

For his part, said the decision of the Finance Committee in the Iraqi parliament, Ahmad Hama, “The Iraqi government estimated the price of a barrel of oil during the budget for the current year at $ 47, while the price today jumped to more than $ 75, which gave Iraq additional excellent amounts” .

“The rise in oil prices by one dollar per barrel will bring Iraq a billion dollars every year, meaning that the government will achieve a surplus of more than 25 billion dollars if oil prices continue throughout the year in this manner and stabilize the export rate at this level,” Hama said in a press statement.

He explained that “the government has a budget deficit of 13 trillion dinars (about 12 billion dollars) and if the survival of oil prices will end its deficit and deviate from external loans and will increase the reserve of the Central Bank of Iraq of foreign currency certainly.”

The Ministry of Oilannounced two days ago, the export of 108 million and 194 thousand, and 920 barrels, during the month of May, with revenues amounted to 7 billion 566 million and 294 thousand dollars.

Oil Ministry spokesman Assem Jihad said that the export statistics for May did not record any exports from Kirkuk fields.

Jihad pointed out that the daily rate of exports amounted to 3 million and 490 thousand barrels, adding that the average price per barrel amounted to 69,932 dollars.

For his part, said the expert on the Iraqi economic affairs, Walid Al-Sarraf said in his speech to “the new Arab” It is hoped that the Iraqi government will issue an expanded report by the end of the first half of this year, including additional financial revenues achieved and the lack of need to borrow to meet the budget deficit.

Al-Sarraf added that Iraq needs to keep oil prices within this level for several months beyond the budget deficit and not need to borrow external.
World oil prices have risen about 50 percent from a year earlier.  The price of oil fell in mid-2014 from $ 115 per barrel of Brent crude to less than $ 30 and resulted in heavy losses and a decline in financial revenues of oil-producing countries, before the price of recent rise, to reach more than $ 76 last Friday.

An expert on the Iraqi market for securities, Abdul Salam Adnan, told the “New Arab” that the additional amounts resulting from oil prices are supposed to be included in the supplementary budget of the state where the deficiencies or things that the government had to abandon when the budget was set 2018 at the price of oil 47 .

Adnan added that the most important point is to stop Iraq negotiations with a number of banks and governments to borrow from them, considering that the survival of Iraq in the list of countries with a rent economy based on oil is not true at all.

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