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Hamza Jeweler *: Iraq's debts to oil companies
04.07.2015
In an interview with Iraqi Oil Minister Adel Abdul-Mahdi, conducted by the Bulletin Iraqi Oil Report electronic publishing on the thirtieth of March, eating Ben Lando, editor, which the subject ...
In an interview with Iraqi Oil Minister Adel Abdul-Mahdi, conducted by the Bulletin Iraqi Oil Report electronic publishing on the thirtieth of March, eating Ben Lando, editor, this subject that has raised a lot of controversy and also carry a lot of misunderstanding, and with great regret, try some distortion former talk to the minister with a news agency in order that it seems as if negligence by the previous administration for the oil ministry, as some have tried to take advantage of these statements, through distortion, to appeal against the service contracts and suggests that they forfeit the rights of the people which is the cause of the calamities facing Iraq now, Perhaps the reason is financial Bozmth and budget deficits.
Most of the contents of this distortion is to suggest, directly or indirectly, that these contracts, service contracts, is not valid and that the variant of the fittest is the production sharing contracts, in an article for the pharmaceutical and visual artist and novelist, ** We do not know what the oil and economy relationship, began a curse oil policy and the implications contracts as if they are the cause of Iraq's economic crisis and not a single Iraqi economy and Rieith. It started so far as to discover that the new savior who came riding a white horse coming from the mountains of Kurdistan, is the finance minister in the federal government, which is tired of negotiating with international banks to save money, and cited, but carved out a part of an article written by Issam Chalabi, a minister of oil in the system the former, which is not to his liking all types of contracts with international companies because of intellectual and ideological background, she does not know that Chalabi himself is that the service contracts for the lesser of evils, and they are the best types of oil contracts currently, despite the rejection of the principle of contracting with major international companies to develop the fields, he wants to be a purely national development, and I personally respect his opinion, despite intense conservatory on how the application of this vision.
It is well known, as stipulated in the contract, that the state should pay cost to develop fields in full through the deduction of 50% of the oil produced during the quarter period, any three-month production, to pay the development costs, and this percentage is called with oil cost in the production sharing contracts, because all types contracts containing the clause, but the percentage of deduction vary from contract to another, if I told percentage longer repayment period, and if the increased ratio fell short repayment period, taking into account the volume of oil product when the adoption rate of payment for the benefit of both parties.
Which provides understand that commissioned the development of 17 oil fields currently being developed at the same time, to be paid by the state through estimating the size of the development projects done every three months, and so when the payment is the end of the three months. If we knew that commissioned the full field development of 17 fields is estimated at $ 200 billion, according to the global costs and feasibility studies approved time of signing the contract, we find that the state should pay almost 4 billion and $ 500 million every three months, and so the annual development up to $ 18 billion cost will be payable annually for companies.
Of course depends pay this money at the completion of the development processes in the fields after reaching the ultimate goal of development, probably after about four or five years from now, or stop increasing production at any given time in the event of accepted companies modifying contracts and change the final production ceilings, Instead of access to 9 million barrels, and this is the current ceiling, to assume that they stop at the ceiling of the production of six million barrels and expire after a period of five years also, so payments will be much lower than the 4 billion every three months.
When asked oil minister by Electronic Magazine IOR, Araki Oil Report, for dues companies, which is a dues for last year is estimated at $ 9 billion, supplemented by dues for this year, which is estimated at $ 18 billion, which is the size of large funds Bdil large budget deficit Iraq for the year 2015?
Through the answer is clear that the minister has already been paid $ 3 billion this year, and that also benefits the current year, which is estimated at $ 18 billion, this will not pay the whole year, because the quarter or quarters Alokhirn of the year to be paid during 2016. Thus, it will be due from the money to be paid this year is the $ 6 billion is added a sum of six months, which is 9 billion, totals will be the $ 15 billion up to, but what would be provided and the Ministry of Finance, a $ 12 billion budget allocations, Valmtbaka will be up to 3 billion, will be paid through What you'll get the state from issuing new bonds, and so I found companies that dues are already available, and you'll get them, which is satisfied with the words of the minister.
From the above we understand that there is not a waste of public money, and there is no corruption, there is no ill-oil contracts, and poor contract management, but falling oil prices Bdil lack of an alternative that flows into the budget money offer is who created the crisis, the money that we see today distract wasted on corrupt and spoilers who do not know how to employ the funds to create opportunities for work, and profits add to the country an economic power, in short do not know anything about sustainable development, all I know ministers quotas and bodies that are no longer independent is the disbursement of funds to the parties or the Mavyatem corruption and disregard for public money.
Back to the main theme, but if Iraq was amended contracts to pay less, would last longer development period, while that Iraq needs to increase its production to provide more funds to meet the needs, but it seems that the increase in the present time has become a subject of controversy for several reasons, including the sharp decline oil prices, and other factors on the road and with a significant impact on oil markets such as the return Iran to produce higher than the current production, an increase of a million and a half million barrels per day, subject to increase in the future, so some find that the Iraq rethink old his policy, or current, which depends principle Speed increase production, but there are those who find that to continue this policy may create a situation better for Iraq from the point of negotiating within OPEC OPEC despite turning to Saudi Gulf tool of a political than economic dimensions to achieve the highest benefit by imposing the optimal price on world markets.
For these reasons and others found the Oil Ministry that it review its oil policy and contractual to achieve the highest benefit, but the path is very narrow and full of bumpy and traps that can be installed by the center especially for the weakness of Iraq's negotiating front with long experience companies to negotiate and reap better profits to the owners of the legitimate right of the oil account road.
Unfortunately, the decline in oil prices came time inappropriate, in sync with the war on terrorism and the problem of displaced people, but do not synchronize these cases to a hair of crisis, the real crisis lies the management of public money, as we have said, not oil or dues companies for development operations, because these really very expensive operations, where companies pay and cost of production was almost negligible compared to the high development costs.
Iraq to the fact that Rei country depends basically on oil revenues, weak people benefited from this relationship to lay the blame on the oil and not on the management of public money, which is far from the oil, and followed them dupes and Kulailoa knowledge to be raised a fuss is justified at all against the best achievement of Iraq since the fall of the former regime Until now, that is his conception of the service contracts and put them into practice.
We recognize the fact that Lula Iraqi fields to develop what the proceeds of Iraq amounted to more than a hundred billion dollars a year a year ago, and for employees' salaries have risen, and because the state acted in this extravagance Babviac, and have been able Iraq generally Next terrorism stand behind the border, and have been able to achieve victories on the battlefield.
In the same interview, the minister spoke about another subject represented an amendment to the contract, and this is a subject very seriously, despite the fact that the minister explicitly said it will not change the content of the contracts as service contracts, but he sought to improve conditions through negotiations with the companies, has given a narrow path so this supposed amendment, and this is what needs to be another pause to talk about him, study well, but unfortunately the minister did not give us enough time to voice their opinions, as announced yesterday that the commissioners with the oil companies have already begun.
What progress does not mean that the contracts are optimal, but it certainly is the best among all development contracts at the level of the whole world until now, no long-term contracts the best ones there at all, and has been credited exclusively to provide this flow of large fiscal and flux on Iraq, but if Iraq was able to improve conditions also aspires to him the minister, it will be a subject of admiration.
(*) An Iraqi oil expert
(**) Note Editorial Board: Ms. intended Haifa Zangana article
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04.07.2015
In an interview with Iraqi Oil Minister Adel Abdul-Mahdi, conducted by the Bulletin Iraqi Oil Report electronic publishing on the thirtieth of March, eating Ben Lando, editor, which the subject ...
In an interview with Iraqi Oil Minister Adel Abdul-Mahdi, conducted by the Bulletin Iraqi Oil Report electronic publishing on the thirtieth of March, eating Ben Lando, editor, this subject that has raised a lot of controversy and also carry a lot of misunderstanding, and with great regret, try some distortion former talk to the minister with a news agency in order that it seems as if negligence by the previous administration for the oil ministry, as some have tried to take advantage of these statements, through distortion, to appeal against the service contracts and suggests that they forfeit the rights of the people which is the cause of the calamities facing Iraq now, Perhaps the reason is financial Bozmth and budget deficits.
Most of the contents of this distortion is to suggest, directly or indirectly, that these contracts, service contracts, is not valid and that the variant of the fittest is the production sharing contracts, in an article for the pharmaceutical and visual artist and novelist, ** We do not know what the oil and economy relationship, began a curse oil policy and the implications contracts as if they are the cause of Iraq's economic crisis and not a single Iraqi economy and Rieith. It started so far as to discover that the new savior who came riding a white horse coming from the mountains of Kurdistan, is the finance minister in the federal government, which is tired of negotiating with international banks to save money, and cited, but carved out a part of an article written by Issam Chalabi, a minister of oil in the system the former, which is not to his liking all types of contracts with international companies because of intellectual and ideological background, she does not know that Chalabi himself is that the service contracts for the lesser of evils, and they are the best types of oil contracts currently, despite the rejection of the principle of contracting with major international companies to develop the fields, he wants to be a purely national development, and I personally respect his opinion, despite intense conservatory on how the application of this vision.
It is well known, as stipulated in the contract, that the state should pay cost to develop fields in full through the deduction of 50% of the oil produced during the quarter period, any three-month production, to pay the development costs, and this percentage is called with oil cost in the production sharing contracts, because all types contracts containing the clause, but the percentage of deduction vary from contract to another, if I told percentage longer repayment period, and if the increased ratio fell short repayment period, taking into account the volume of oil product when the adoption rate of payment for the benefit of both parties.
Which provides understand that commissioned the development of 17 oil fields currently being developed at the same time, to be paid by the state through estimating the size of the development projects done every three months, and so when the payment is the end of the three months. If we knew that commissioned the full field development of 17 fields is estimated at $ 200 billion, according to the global costs and feasibility studies approved time of signing the contract, we find that the state should pay almost 4 billion and $ 500 million every three months, and so the annual development up to $ 18 billion cost will be payable annually for companies.
Of course depends pay this money at the completion of the development processes in the fields after reaching the ultimate goal of development, probably after about four or five years from now, or stop increasing production at any given time in the event of accepted companies modifying contracts and change the final production ceilings, Instead of access to 9 million barrels, and this is the current ceiling, to assume that they stop at the ceiling of the production of six million barrels and expire after a period of five years also, so payments will be much lower than the 4 billion every three months.
When asked oil minister by Electronic Magazine IOR, Araki Oil Report, for dues companies, which is a dues for last year is estimated at $ 9 billion, supplemented by dues for this year, which is estimated at $ 18 billion, which is the size of large funds Bdil large budget deficit Iraq for the year 2015?
Through the answer is clear that the minister has already been paid $ 3 billion this year, and that also benefits the current year, which is estimated at $ 18 billion, this will not pay the whole year, because the quarter or quarters Alokhirn of the year to be paid during 2016. Thus, it will be due from the money to be paid this year is the $ 6 billion is added a sum of six months, which is 9 billion, totals will be the $ 15 billion up to, but what would be provided and the Ministry of Finance, a $ 12 billion budget allocations, Valmtbaka will be up to 3 billion, will be paid through What you'll get the state from issuing new bonds, and so I found companies that dues are already available, and you'll get them, which is satisfied with the words of the minister.
From the above we understand that there is not a waste of public money, and there is no corruption, there is no ill-oil contracts, and poor contract management, but falling oil prices Bdil lack of an alternative that flows into the budget money offer is who created the crisis, the money that we see today distract wasted on corrupt and spoilers who do not know how to employ the funds to create opportunities for work, and profits add to the country an economic power, in short do not know anything about sustainable development, all I know ministers quotas and bodies that are no longer independent is the disbursement of funds to the parties or the Mavyatem corruption and disregard for public money.
Back to the main theme, but if Iraq was amended contracts to pay less, would last longer development period, while that Iraq needs to increase its production to provide more funds to meet the needs, but it seems that the increase in the present time has become a subject of controversy for several reasons, including the sharp decline oil prices, and other factors on the road and with a significant impact on oil markets such as the return Iran to produce higher than the current production, an increase of a million and a half million barrels per day, subject to increase in the future, so some find that the Iraq rethink old his policy, or current, which depends principle Speed increase production, but there are those who find that to continue this policy may create a situation better for Iraq from the point of negotiating within OPEC OPEC despite turning to Saudi Gulf tool of a political than economic dimensions to achieve the highest benefit by imposing the optimal price on world markets.
For these reasons and others found the Oil Ministry that it review its oil policy and contractual to achieve the highest benefit, but the path is very narrow and full of bumpy and traps that can be installed by the center especially for the weakness of Iraq's negotiating front with long experience companies to negotiate and reap better profits to the owners of the legitimate right of the oil account road.
Unfortunately, the decline in oil prices came time inappropriate, in sync with the war on terrorism and the problem of displaced people, but do not synchronize these cases to a hair of crisis, the real crisis lies the management of public money, as we have said, not oil or dues companies for development operations, because these really very expensive operations, where companies pay and cost of production was almost negligible compared to the high development costs.
Iraq to the fact that Rei country depends basically on oil revenues, weak people benefited from this relationship to lay the blame on the oil and not on the management of public money, which is far from the oil, and followed them dupes and Kulailoa knowledge to be raised a fuss is justified at all against the best achievement of Iraq since the fall of the former regime Until now, that is his conception of the service contracts and put them into practice.
We recognize the fact that Lula Iraqi fields to develop what the proceeds of Iraq amounted to more than a hundred billion dollars a year a year ago, and for employees' salaries have risen, and because the state acted in this extravagance Babviac, and have been able Iraq generally Next terrorism stand behind the border, and have been able to achieve victories on the battlefield.
In the same interview, the minister spoke about another subject represented an amendment to the contract, and this is a subject very seriously, despite the fact that the minister explicitly said it will not change the content of the contracts as service contracts, but he sought to improve conditions through negotiations with the companies, has given a narrow path so this supposed amendment, and this is what needs to be another pause to talk about him, study well, but unfortunately the minister did not give us enough time to voice their opinions, as announced yesterday that the commissioners with the oil companies have already begun.
What progress does not mean that the contracts are optimal, but it certainly is the best among all development contracts at the level of the whole world until now, no long-term contracts the best ones there at all, and has been credited exclusively to provide this flow of large fiscal and flux on Iraq, but if Iraq was able to improve conditions also aspires to him the minister, it will be a subject of admiration.
(*) An Iraqi oil expert
(**) Note Editorial Board: Ms. intended Haifa Zangana article
[You must be registered and logged in to see this link.]
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