Iraqi News Early Monday AM 6-27-22

TLM724 Administrator BondLady’s Corner

Interview Of The Delegate Of The Iraq Oil Report Magazine With The Minister Of Oil, D. Ali Allawi

Saturday 25 June 2022 - 17:02  Majed Allawi

{NOTE - these are excerpts from a very long, very informative article - these excerpts relate to foreign exchange reserves, regional banks, private banks and defensible currency exchange rate.}

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Allawi said the recent increase in foreign exchange reserves to $70 billion is largely due to the rise in global oil prices, but also due to prudent financial management and the  devaluation of the Iraqi dinar against the US dollar.

Depositors have also shown greater confidence in the Iraqi banking system as individuals and businesses have chosen to keep their money in the country rather than in other regional centers, where inflation and risks are higher.

Lizzie Porter: You and Prime Minister Al-Kadhimi have been talking about significant increases in foreign exchange reserves.

To what extent can this government claim to be responsible for the improved health of the economy and for those [reserves]?

Does the improvement in foreign exchange reserves reflect a real improvement in the health of the economy?

Or is it a reflection of the government's near-total dependence on crude oil sales?

Ali Allawi: Obviously, the bulk of this improvement is due to the fact that oil prices have gone up.

But on the other hand, our imports are controlled, and this means that local production has increased.

Our controls on financial expenditures are much stricter now than they were before.

We borrowed much less.

So there is an element of financial management contributing to this improvement as well - not just higher oil prices.

And I think oil prices have gone up, yeah, but they've only really gone up in terms of the financial records - because we got them three months later - maybe in March.

And before that, I mean, towards the end of 2021, when [the price of a barrel of oil] crossed the $70 threshold, our diet was high, but diet in terms of controlled expenditures; If you really looked at the pressure on us in the budget, we could have spent all that money easily.

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Ali Allawi: Spending [was] under control last year - I mean, we controlled expenditures so much that the actual deficit was about one-fifth of the planned deficit.

The planned deficit was more than 30 trillion dinars, and the actual deficit was seven.

We did not rely on printing money.

We had a very successful local bond issuance with very attractive interest rates, so it sucked a lot of money.

We have seen an increase in the amount of foreign currency deposits in our banking system, which is already a huge increase, an increase of 30%. yes.

So all of these things, these numbers speak for themselves.

The fact that oil prices are high has made our financial lives much easier.

At the same time, [there is] the fact that investment levels have increased - the amount of money coming in for industrial finance and from foreign investors is actually very high - small and medium-sized enterprises.

Talk to the IFC, and they'll tell you.

So, there are some capital inflows.

Also, the capital inflows came partly as a result of the exchange adjustments, and partly as a result of the difficulties in the financial markets of neighboring countries, especially Turkey and Lebanon.

So when you meditate, putting your money here is not a bad idea.

Lizzie Porter: So people moved money from Turkey and Lebanon to Iraq?

Ali Allawi: Yes. Part of that is reflected in the foreign exchange reserves figures.

Lizzie Porter: Those in Lebanon who can get their money out of Lebanon.

Ali Allawi: And Turkey too - there are a lot of Iraqi dollars in Turkey and people were afraid.

Lizzie Porter: So companies and individuals are returning the money they had in Turkish banks to Iraqi banks?

Ali Allawi: Yes. I mean, it's remarkable. We don't have the numbers to estimate, but they are noticeable.

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Lizzie Porter: I have some additional questions about banking.

I have talked about this increase in private bank deposits.

Why is that?

Why do individuals feel relatively suddenly more confident in the banking sector in Iraq?

Ali Allawi: Well, I mean, in terms of government banks, they feel confident in the government - and that the government is wisely managing the [environment] of the macro economy.

I don't think people think this way in a lot of vocabulary, but they see a stable environment.

They see a defensible currency now at 1,450 [dinars per US dollar].

The benefits of devaluation are starting to appear through increased investment flows.

And I think there is a general sense that the macroeconomic environment is stable.

Now, some of the more professional private banks - and there are some of them - have, I think, a very good track record of attracting deposits from people who have kept their money at home before.

Some banks and their subsidiaries, especially regional banks, have had an exceptional year this year.

And more and more people realize that with the loss of profitable opportunities in the foreign exchange market, they as banks must work together, and they are taking it seriously.

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Lizzie Porter: I have some additional questions about the reform.

Since you released the white paper, it is clear that oil prices have skyrocketed. In light of this, is there a political will on the part of parliamentarians and senior ministry officials to carry out reforms?

Ali Allawi: I think so. People always ask this question, that [the white paper] is dead - it's not.

There is a suitable structure instead. And the repair cell is working. They hold regular meetings to oversee and direct the reform process.

Ministries are responding. Some respond faster than others. But they all respond.

People don't take this as just another document that will be put on the shelf and get dusty.

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{complete article is at https://akhbaar.org/home/2022/6/295283.html}

Allocating $520 Million For The Development Of Oil Exploration

Economic      Last update 06/26/2022 | 11:40 AM  The Information/Baghdad  : The Oil Exploration Company announced, on Sunday, allocating an amount of 520 million dollars to develop the exploration sector for crude and increase Iraq's reserves.

The company's director, Basem Muhammad Khudair, said in a statement reported by the official "Al-Sabah" newspaper and seen by "The Information", that

"the company has prepared a five-year plan at a cost of 520 million dollars aimed at developing the exploratory sector, financing projects, purchasing modern equipment and devices, training workers and improving infrastructure by launching major projects."

Khudair pointed out that “the government should take great care to include in the budget the allocations required to match plans for expansion of exploration projects in associated and free gas, in order to

reach 80 percent of self-sufficiency in Iraq’s needs by 2026, and to

equip power plants that depend on importing part of it. From outside".

He explained, "There are 9 exploration teams affiliated with the company deployed in the governorates of Nineveh, Anbar, Najaf, Muthanna, Basra, Wasit and other governorates," noting that

"encouraging quantities of oil were discovered in the Muthanna governorate, and

work is currently underway to search for new reserves to compensate and increase the reserves in the country.". finished/25     https://almaalomah.me/2022/06/26/605475/

International Oil Companies Withdraw From Kurdistan And Prefer The South Over The Region

Politician     Last update 06/26/2022 | 10:15 am  Information/Baghdad..  A member of the Parliamentary Economy and Industry Committee, Soran Omar, expected on Sunday that the Kurdistan region would witness withdrawals of international companies from the region, indicating that

these companies preferred their interests in the south over the problems and disputes between the region and the center.

Omar said, in a statement reported by the official "Al-Sabah" newspaper, which was seen by "The Information", that "it is expected that we will witness other withdrawals of international companies from the region that have major projects in southern Iraq, which preferred their interests with the federal government legally over the problems and disputes between the region and the center."

He added, "All talks and negotiations so far are about positions and not about the region's entitlement or the problems between it and the center, especially with regard to oil and gas, and

it was necessary to solve the problem since the beginning of the Federal Court's issuance of its decision to cancel the oil and gas law in the Kurdistan region." 

Regarding the economic effects of the withdrawal of companies from the region, Omar saw that “the withdrawal of foreign companies operating in the Kurdistan region will greatly affect the regional government in economic terms, especially since 90% of the region’s government revenues come from oil imports, and

therefore the withdrawal of these companies will stop the export of Oil, and this means ending the region economically, and we hope that this will not happen and that we will not reach this point.”

He continued, "In my opinion, international companies are not in their interest to fight this battle with the Federal Court," noting that "the only solution to this problem is the issuance of (the oil and gas law) in the Federal House of Representatives." finished/25     https://almaalomah.me/2022/06/26/605465/

Commenting On The Companies' Withdrawal... Expert: There May Come A Day When The Region Will Watch Oil!

Politician    Last update 06/26/2022 | 2:38 pm  Information / Baghdad.  The oil expert, Hamza Al-Jawahiri, confirmed, on Sunday, that the withdrawal of some oil companies operating in the Kurdistan region came due to their fears of losing their interests and preserving their investments inside Iraq, warning the region that there may come a day when it is watching its oil while it is underground.

Al-Jawahiri said in a statement to / the information /, that “the decision of the Federal Court regarding the region’s oil was clear and explicit in the interpretation of the paragraphs related to the region’s oil after it was a continuous dispute regarding its interpretation between the center and the region.”

Al-Jawahiri added, "The government must be strict and follow up on companies operating in the region that violate the decision of the Federal Court."

He explained, "The federal government, if it continues with this approach, will force the region to succumb to the decision of the Federal Court and go to approve the Federal Oil and Gas Law, and vice versa,

all companies operating in the region will withdraw in order to preserve their reputation and investment inside or outside Iraq, and thus the region will become a spectator of oil while it is underground without extract”. finished / 25 AD    https://almaalomah.me/2022/06/26/605524/

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