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Economic reforms issued treasury bonds and selling of oil reserves in order to avoid budget deficit
3/30/2015
Special / Source News / political editor .. Iraq start a new reform steps in the oil sector in an attempt to fill the shortfall Bmoisnth and directed shortage of liquidity as well as his issuing treasury bonds to avoid this deficit He said Finance Minister Hoshyar Zebari said his government plans to manage emergency funds through sales of oil reserves in advance and payment system for the first time and it will begin economic reforms to amend the oil contracts with major Western companies. Zebari said he had not yet determined the details of the quantities and value of these sales, known in the oil industry pre-funding but Iraq needs liquidity to fund its military campaign against al organizing the Islamic state and to compensate for revenue lost because of falling world oil prices.
Zebari said that Baghdad also plans to change the way it manages its exploration and production with oil companies such as Royal Dutch Shell, BP, Exxon decades. With this shift will move Iraq for the first time to the production sharing contracts under which the proceeds are split adopt a percentage of the services that you get under which oil companies on a specific fee contracts. The Iraqi service contracts entered into when oil prices were high. Decline in world oil prices means that Baghdad is now paying for companies more often if they were working production sharing contracts.
Zebari said the amended contracts in Iraq will know the name of a revenue-sharing contracts. Such contracts are prohibited in many oil-producing countries because they consider the abandonment of national sovereign wealth to foreign companies. However, Zebari said that Iraq should seize the opportunity offered by the Islamic state of crisis for reform.
"It's better now for us to rely production sharing contracts. We are negotiating with all international oil companies ... the federal government has begun to realize through the factual circumstances that revenue sharing is the best."
For his part, Turkish Energy Minister Taner Yildiz that deliveries of oil from Iraq through Turkey since the beginning of last year amounted to 47 million barrels, and is worth about three billion dollars.
Yildiz told reporters that he was yet loaded oil tanker 57 transferred to Turkey from Iraq.
It is noteworthy that the majority of the oil fields run by the Kurdistan region, but Baghdad used the same facilities in recent months to ship crude to the Turkish port of Ceyhan on the Mediterranean.
On the same level, the oil minister Adel Abdul Mahdi predicted that crude prices could hit $ 70 a barrel by the end of 2015 and played down the impact of emerging in Yemen on prices conflict.
The collapse in world oil prices to a sharp drop in Iraqi government revenues, prompting the OPEC member country to re-negotiate contracts with international oil companies while facing the military campaign against al-expensive «Daash» terrorist.
Abdul-Mahdi said that «oil prices reached in January to« the bottom and can not continue to decline to less than that ... is now rising slowly but steadily. Will continue to climb and possibly up to $ 70 by the end of the year. »
He said Abdul-Mahdi, that «the impact of the conflict in Yemen on oil prices will be short-term, saying,« Of course, political issues such as the crisis in Yemen could give some payment to the upward trend of prices, but it will be a temporary effect ».
Decline in world oil prices means that Baghdad pay now for companies much larger financial entitlements from production-sharing applicable to other producers decades pattern and seek to renegotiate the terms of their contracts.
And international companies operating in the southern oil fields in Iraq under the services currently based on a fixed fee for the dollar amounts of additional contracts for producing a formula that led to inflation Baghdad bills at the same time in which the collapse of oil revenues.
Abdul-Mahdi said he met with officials from the Royal Dutch Shell last Thursday to discuss the amendment held to the benefit of both sides, but stressed that an agreement with Total or is not reached to any other global company.
He added: «We are still in the negotiation phase. Is not signed anything yet with any of the major oil companies ».
Abdul-Mahdi said that «any review of the contracts will not result in significant changes in the agreements or structure and a target level of $ 9 million barrels a day of Iraqi oil production by 2020 remains intact».
The issue of Iraq is currently 2.9 million barrels per day of oil, said Abdul-Mahdi, the average exports for the month of March is heading to record three million barrels per day.
He said the oil minister said «Iraq will try to pay nine billion dollars still owed to oil companies for 2014 by increasing the amount of crude produced from Kirkuk or Basra before the end of June».
Since he became finance minister under the new government of Prime Minister Zebari Haider al-Abadi was able to get the approval of Parliament and the national budget and the conclusion of an agreement with the Kurdistan region on oil revenues after years of disputes and described as beneficial to both sides. Zebari said: "You can not build the private sector and bring in foreign investment with the adoption of an authoritarian socialist laws of old."
Earlier this month, Zebari also said that Iraq is considering issuing bonds worth five billion dollars through the bank Citi Bank and Deutsche Bank to help cover the budget deficit. He cited a monthly bill worth three billion dollars facing the Iraqi government in order to meet the needs of its population of 32 million as a sign of extreme centralization and lack of private investment.
Zebari said "this crisis .... Despite the difficulties Nlaekayaa security-related and financial aspects really led us to a lot of new ideas. Logo is that it does not become bound to the reform, but it will fail economically."
For its part, according to the Ministry of Oil to lower crude oil prices in the global market has led to a decline in fiscal revenue of the general budget of the federal 2015, which is reflected in the budget of the Federal Ministry of Oil, which has led to inadequate financial allocations to cover the payment of financial dues to foreign companies contracting and working in the oil fields Under the service contracts.
She Wazzarh- in a statement that it was a joint meeting between the Ministry of Oil and Ministry of Finance and the Central Bank of Iraq to address these consequences and its negative effects on crude oil production rates in this Alhakol..oukalt: It was agreed to ask the treasury bonds worth $ 12 billion.
She added that the launch of the treasury bonds was based on Article 34 of the federal budget for the 2015 law, the first batch of which will be launched end of March to launch other payments continue, respectively.
The ministry said that the launch of these bonds in addition to the appropriations originally specified in the Ministry's budget will provide sufficient funds are available to pay dues to foreign companies contracting both those amounts that have been carried over from last year in 2014, or planned spending in the current year 2015.
She explained that this action reflects the gravity of the financial situation of Iraq and maintains reassuring for all companies operating in the country's investment environment in order to sustain the implementation of vital projects.
Meanwhile, despite the war being waged against Iraq militants gangs Daash and falling oil prices that has plagued public Bmalith still this country can rely on oil reserves to attract buyers to the first publications of international bonds in nine years. Earlier, Finance Minister Hoshyar Zebari said that the central government is discussing with Citibank and Deutsche Bank version potential for dollar bonds worth five billion dollars for five years to help them bridge the budget deficit.
It is believed a lot of fund managers that Iraq will fall short of selling such a huge amount of bonds at once especially as he did not get a credit rating from one of the major agencies. And obtain a credit rating could take months. It is true that the bond support specific oil revenues will boost investor demand but the government has not said it would do so may refuse to handcuff her hands in this way. So may be a smaller version put in perhaps between billion and two billion.
The corruption and excessive spending in times of the rise of oil prices and financial mismanagement have all contributed to the economic crisis triggered by the organization of the Islamic state takeover of the zones in Iraq and the collapse of oil prices. Zebari said Iraq will not put pressure on the Gulf countries.
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3/30/2015
Special / Source News / political editor .. Iraq start a new reform steps in the oil sector in an attempt to fill the shortfall Bmoisnth and directed shortage of liquidity as well as his issuing treasury bonds to avoid this deficit He said Finance Minister Hoshyar Zebari said his government plans to manage emergency funds through sales of oil reserves in advance and payment system for the first time and it will begin economic reforms to amend the oil contracts with major Western companies. Zebari said he had not yet determined the details of the quantities and value of these sales, known in the oil industry pre-funding but Iraq needs liquidity to fund its military campaign against al organizing the Islamic state and to compensate for revenue lost because of falling world oil prices.
Zebari said that Baghdad also plans to change the way it manages its exploration and production with oil companies such as Royal Dutch Shell, BP, Exxon decades. With this shift will move Iraq for the first time to the production sharing contracts under which the proceeds are split adopt a percentage of the services that you get under which oil companies on a specific fee contracts. The Iraqi service contracts entered into when oil prices were high. Decline in world oil prices means that Baghdad is now paying for companies more often if they were working production sharing contracts.
Zebari said the amended contracts in Iraq will know the name of a revenue-sharing contracts. Such contracts are prohibited in many oil-producing countries because they consider the abandonment of national sovereign wealth to foreign companies. However, Zebari said that Iraq should seize the opportunity offered by the Islamic state of crisis for reform.
"It's better now for us to rely production sharing contracts. We are negotiating with all international oil companies ... the federal government has begun to realize through the factual circumstances that revenue sharing is the best."
For his part, Turkish Energy Minister Taner Yildiz that deliveries of oil from Iraq through Turkey since the beginning of last year amounted to 47 million barrels, and is worth about three billion dollars.
Yildiz told reporters that he was yet loaded oil tanker 57 transferred to Turkey from Iraq.
It is noteworthy that the majority of the oil fields run by the Kurdistan region, but Baghdad used the same facilities in recent months to ship crude to the Turkish port of Ceyhan on the Mediterranean.
On the same level, the oil minister Adel Abdul Mahdi predicted that crude prices could hit $ 70 a barrel by the end of 2015 and played down the impact of emerging in Yemen on prices conflict.
The collapse in world oil prices to a sharp drop in Iraqi government revenues, prompting the OPEC member country to re-negotiate contracts with international oil companies while facing the military campaign against al-expensive «Daash» terrorist.
Abdul-Mahdi said that «oil prices reached in January to« the bottom and can not continue to decline to less than that ... is now rising slowly but steadily. Will continue to climb and possibly up to $ 70 by the end of the year. »
He said Abdul-Mahdi, that «the impact of the conflict in Yemen on oil prices will be short-term, saying,« Of course, political issues such as the crisis in Yemen could give some payment to the upward trend of prices, but it will be a temporary effect ».
Decline in world oil prices means that Baghdad pay now for companies much larger financial entitlements from production-sharing applicable to other producers decades pattern and seek to renegotiate the terms of their contracts.
And international companies operating in the southern oil fields in Iraq under the services currently based on a fixed fee for the dollar amounts of additional contracts for producing a formula that led to inflation Baghdad bills at the same time in which the collapse of oil revenues.
Abdul-Mahdi said he met with officials from the Royal Dutch Shell last Thursday to discuss the amendment held to the benefit of both sides, but stressed that an agreement with Total or is not reached to any other global company.
He added: «We are still in the negotiation phase. Is not signed anything yet with any of the major oil companies ».
Abdul-Mahdi said that «any review of the contracts will not result in significant changes in the agreements or structure and a target level of $ 9 million barrels a day of Iraqi oil production by 2020 remains intact».
The issue of Iraq is currently 2.9 million barrels per day of oil, said Abdul-Mahdi, the average exports for the month of March is heading to record three million barrels per day.
He said the oil minister said «Iraq will try to pay nine billion dollars still owed to oil companies for 2014 by increasing the amount of crude produced from Kirkuk or Basra before the end of June».
Since he became finance minister under the new government of Prime Minister Zebari Haider al-Abadi was able to get the approval of Parliament and the national budget and the conclusion of an agreement with the Kurdistan region on oil revenues after years of disputes and described as beneficial to both sides. Zebari said: "You can not build the private sector and bring in foreign investment with the adoption of an authoritarian socialist laws of old."
Earlier this month, Zebari also said that Iraq is considering issuing bonds worth five billion dollars through the bank Citi Bank and Deutsche Bank to help cover the budget deficit. He cited a monthly bill worth three billion dollars facing the Iraqi government in order to meet the needs of its population of 32 million as a sign of extreme centralization and lack of private investment.
Zebari said "this crisis .... Despite the difficulties Nlaekayaa security-related and financial aspects really led us to a lot of new ideas. Logo is that it does not become bound to the reform, but it will fail economically."
For its part, according to the Ministry of Oil to lower crude oil prices in the global market has led to a decline in fiscal revenue of the general budget of the federal 2015, which is reflected in the budget of the Federal Ministry of Oil, which has led to inadequate financial allocations to cover the payment of financial dues to foreign companies contracting and working in the oil fields Under the service contracts.
She Wazzarh- in a statement that it was a joint meeting between the Ministry of Oil and Ministry of Finance and the Central Bank of Iraq to address these consequences and its negative effects on crude oil production rates in this Alhakol..oukalt: It was agreed to ask the treasury bonds worth $ 12 billion.
She added that the launch of the treasury bonds was based on Article 34 of the federal budget for the 2015 law, the first batch of which will be launched end of March to launch other payments continue, respectively.
The ministry said that the launch of these bonds in addition to the appropriations originally specified in the Ministry's budget will provide sufficient funds are available to pay dues to foreign companies contracting both those amounts that have been carried over from last year in 2014, or planned spending in the current year 2015.
She explained that this action reflects the gravity of the financial situation of Iraq and maintains reassuring for all companies operating in the country's investment environment in order to sustain the implementation of vital projects.
Meanwhile, despite the war being waged against Iraq militants gangs Daash and falling oil prices that has plagued public Bmalith still this country can rely on oil reserves to attract buyers to the first publications of international bonds in nine years. Earlier, Finance Minister Hoshyar Zebari said that the central government is discussing with Citibank and Deutsche Bank version potential for dollar bonds worth five billion dollars for five years to help them bridge the budget deficit.
It is believed a lot of fund managers that Iraq will fall short of selling such a huge amount of bonds at once especially as he did not get a credit rating from one of the major agencies. And obtain a credit rating could take months. It is true that the bond support specific oil revenues will boost investor demand but the government has not said it would do so may refuse to handcuff her hands in this way. So may be a smaller version put in perhaps between billion and two billion.
The corruption and excessive spending in times of the rise of oil prices and financial mismanagement have all contributed to the economic crisis triggered by the organization of the Islamic state takeover of the zones in Iraq and the collapse of oil prices. Zebari said Iraq will not put pressure on the Gulf countries.
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