Monday AM Iraq Economic News Highlights 8-1-22
Monday AM Iraq Economic News Highlights 8-1-22
The jump in oil revenues saves Iraq's economy from collapse.. and conflicts reduce gains
Posted On2022-08-01 By Sotaliraq The jump in oil prices came to save Iraq from stifling economic and financial crises, and to get it out of the predicament of borrowing, depleting cash reserves and exacerbating the budget deficit.
And revenues from Iraqi oil exports, during the month of June, amounted to about 11.505 billion dollars, according to official figures issued by the Ministry of Oil in Baghdad. The ministry said in a statement that the total amount of crude oil exports for the same month amounted to more than 101 million barrels.
The researcher in Iraqi economic affairs, Hamza Al-Hardan, said that the opportunity for high oil prices comes to Iraq again after the world witnessed a rise in oil prices nearly ten years ago, and the country did not benefit from it in real terms, relying on its rentier economy (oil money) to fill its operating and investment expenses. .
Al-Hardan said that the Iraqi government should take advantage of the opportunity to rise in oil prices correctly this time, because it is expected that oil revenues for this year will reach more than 120 billion dollars.
He added that this increase in oil prices can continue, which may be reflected positively so that there will be a turning point in the Iraqi economy, through the correct and sound investment operations, and the establishment of projects to support the Iraqi budget and the lack of complete dependence on the oil sector.
He explained that the Iraqi government should invest opportunities to develop the economic sectors and industrial and agricultural facilities, and to develop projects that could be an essential source of transforming the national economy from rentier to diversified.
He pointed out that this increase is a temporary opportunity due to international factors and variables, and the possibility of an end to the Russian-Ukrainian crisis, which will be followed by international agreements to reduce global oil prices.
Standard cash reserve
Iraqi Prime Minister Mustafa Al-Kazemi revealed that during the two years of the government's life, the Central Bank's reserves were less than 50 billion dollars, and now it has reached 76 billion dollars, and it will reach 90 billion dollars by the end of this year.
Al-Kazemi indicated during a press conference, that the salaries of employees, retirees, benefits and others amount to 5 billion dollars per month, and there are two billion dollars in operating expenses, bringing the total amount of monthly expenses to 7 billion dollars, at 84 billion dollars annually.
Al-Kazemi made it clear that the Iraqi government has no intention of moving towards changing the dinar exchange rate.
For his part, the economist, Manar Al-Obaidi, stated that the Central Bank owns multiple types of reserves, amounting to more than 160 trillion dinars, including an investment reserve of 60 trillion dinars invested in foreign banks in return for returns and interests.
Al-Obaidi added that there are reserves of gold estimated at 140 tons, worth approximately two trillion dinars, in addition to the presence of internal debts with the Ministry of Finance of the Central Bank of up to 40 trillion dinars, and the high oil prices in the global market contributed to a jump in Iraq's cash reserves.[/size]
Possibility to face challenges
A member of the Finance Committee in the Iraqi parliament, Jamal Cougar, explained that it is too early to say that Iraq is capable of facing global economic challenges, because Iraq is a rentier country that depends on oil revenues, and any fluctuations that occur in countries of the world contribute to causing great paralysis in the local economy, which It is considered a fragile economy.
And Cougar indicated that the Iraqi state today does not have integrated economic studies, and the effects of global inflation will have great repercussions on the Iraqi economy, because the country depends mainly on importing goods and services from abroad and there is no local production, which means that the Iraqi market is negatively affected by every case of inflation witnessed by the countries of the region. and the world.
He added that the rise taking place today enabled the Iraqi economy to regain its monetary activity, raise reserve rates, and pay large sums of debts owed internally and externally. He pointed out that the government should benefit from the rise in oil prices, and allocate the surplus to support the investment side, because the state is still spending 75 percent of its budget for the operational side, expenses and salaries, and all of these expenses have no financial return.
He called on the government to work on approving an investment budget, not an operational one, to create new sources of funding, and to transform the Iraqi state from a rentier state to a multi-resource state. In light of the intersections within Parliament, the budget has not yet been approved, which specifies the items of state expenditures within a year, especially those allocated to salaries, support and the payment of debt burdens, as well as specifying the target of state revenues.
Despite the government’s success in obtaining about $ 18 billion within the emergency security law recently approved by Parliament to secure energy imports, finance important service projects, and finance the Social Welfare Fund, officials confirm the country’s continued need for the budget that was drafted earlier at nearly 90 billion. dollar. LINK
Baghdad announces the formation of a committee to prepare designs for the entrances to the capital
Posted On2022-08-01 By Sotaliraq Yesterday, Sunday, the Department of Roads and Bridges in Baghdad Governorate revealed the reasons for the reluctance to work at the entrances to Baghdad, while it disclosed the amounts allocated to it, and indicated the formation of a committee to prepare a new design for the controls.
The director of the department, Huda Abdul-Amir, said, "The percentage of completion of the four entrances to Baghdad is among the works of the province of Baghdad, and it includes the entrance to Baghdad-Mosul 33 kilometers, the entrance to Baghdad Al-Hilla, the old Baghdad Abu Ghraib entrance 24 kilometers, and the entrance to Baghdad Baquba 10 kilometers."
She indicated that "the expansion work at the entrances has begun, but there are many conflicts, such as optical and electrical cable works, and this requires the preparation of statements by the implementing agency," noting that "in coordination with representatives of the Ministry of Electricity, Rusafa and Karkh, the points were taken and cable paths determined."
And she continued, "The sums are large, amounting to 6 billion dinars, but they are not included in the statement, forcing the department to have its work at the present time in the form of surveys, determining the line and fixing the weights, until the preparation of the statements that are supposed to contain an increase in the allocated amounts, especially since there are There are many conflicts, including water, sewage, electricity and optical cable.”
She added, "The Roads Law No. 35 of 2002 specified the distance in which services should be placed and according to the type of road (main - secondary), but the departments did not comply with the implementation of the law and the approval of the Roads and Bridges Department was not obtained when extending their services," noting that " The problem will remain unless work is done in cooperation with the concerned authorities.”
And she continued, "The reality of the situation requires the inclusion of amounts for paragraphs related to the Ministry of Electricity, which will cause delays in the work and completion of the project," stressing that "there is coordination with the concerned authorities, especially with the existence of a new plan to expand roads and bridges."
And she pointed out, "The sums allocated to the four entrances to Baghdad amounted to 195 billion dinars, which is not enough, as several meetings were held with the Prime Minister's advisor, because the entrances to Baghdad are considered the facade of the capital, and its works and specifications must be taken into account to be suitable for the next 20 years." She confirmed, "In the coming days, a vision will be raised regarding the entrances."
Abdel Amir expressed her hope “to monitor the amounts without delay to ensure the continuity of work,” explaining that “the issue of surveillance cameras for entrances will be included in the statements, and there is coordination with the Ministry of Interior regarding controls, as a joint committee was formed between the Directorate of Roads, Bridges and National Security for engineering consultancy.” LINK
Iraq's offshore oil export pipelines are vulnerable to environmental disaster
Posted On2022-07-31 By Sotaliraq Iraq's crude oil production has stagnated in recent months, despite a quota increase under the OPEC+ agreement, which is largely constrained by its inability to export more volumes through its southern port on the Persian Gulf.
According to S&P Global Commodity Insights, near-term prospects for increased loading volumes at its old Gulf facility in Basra are bleak, Iraqi officials acknowledge, preventing any meaningful production gains that would allow the struggling country Financial distress by taking advantage of high oil prices.
The deteriorating pipelines connecting the terminal to the loading docks pose a significant risk of catastrophic environmental disaster.
Iraq produced 4.38 million barrels per day of crude oil in June, including from the Kurdistan Region, slightly higher than the March production level of 4.34 million barrels per day.
Also, production did not keep pace with Iraq's share, which rose from 4.37 million barrels per day in March to 4.509 million barrels per day in June and is scheduled to increase to 4.651 million barrels per day in August.
Figures indicate that until the restoration of southern Iraq's exports to this April 2020 level will still require the country to keep production below its quota in OPEC +, as storage facilities in Basra are full, and local refineries and power stations are limited in what they can consume, port data showed. Crude oil stocks in the southern reservoirs have reached about 6.8 million barrels, about 72% of their total capacity of 9.5 million barrels.
Flows in the port of Basra are hindered by the deterioration of two marine lines feeding the berths from the station, and sources familiar with the matter said that bulges have appeared at the end of these lines in recent months, and are feared that they will explode and cause a major oil spill into the Gulf.
This has forced the Basra Oil Company to cut berth pumping rates by more than 25%, to about 54,000 b/h from previous levels of 70,000 b/h.
The cruise lines were built in the late 1970s and were due to be replaced decades ago, but were never implemented due to funding problems, political turmoil and other delays.
Iraqi officials aim to increase southern export capacity to 3.35 million barrels per day by September, said the deputy director of the state oil marketing company SOMO.
At the moment, this is what we believe we can achieve, taking into account not only the restrictions on export capacity, but also rehabilitation activities that may sometimes cause halts,” Ali Al Shatari said.
That number could go up, of course, but I'm a bit conservative until I see plans to develop export facilities move forward."
Of this volume, SOMO expects Basra Heavy to average 1.1 million bpd in July and Basra Medium, 2.2 million bpd, Shatari said.
The current high price environment represents an opportunity for Iraq to raise the necessary funding to replace its aging sea lines, which will likely take about two years to complete from the signing of the contract. LINK
Al-Monitor: Mosul Is Heading Towards The Reconstruction Of Its Destroyed Airport
Reports Economy News-Baghdad As part of the campaign to rebuild Nineveh Governorate after its liberation from the grip of the terrorist organization ISIS, attention is directed towards implementing the long-awaited project to rebuild Mosul International Airport. .
A report by Al-Monitor indicates that the government’s interest in this project in Mosul came in response to the demands raised by the citizens of the province to rebuild the infrastructure in their city and the reconstruction of the airport, as it constitutes an important service and commercial facility for the city’s residents, as well as the reconstruction of factories and the implementation of projects that will provide job opportunities for them .
In this context, Ministry of Planning spokesman Abdul-Zahra Al-Hindawi told Al-Monitor that Mosul “received the largest part of the funds allocated in the budget for reconstruction purposes because its infrastructure was destroyed and tens of thousands of houses were destroyed .”
The UNESCO Educational, Cultural and Scientific Organization had supported the initiative to revive the spirit of Mosul, which was launched in 2018, which gave impetus and a glimmer of hope that the revival and rebuilding of historical monuments and landmarks that characterized the city .
A source from Nineveh Governorate confirmed to Al-Monitor that the project, after Al-Kazemi’s recent directives, has become one of the strategic priorities in the governorate. On the other hand, he indicated that there are some disputes about the size of the project’s cost, and that an international accounting and evaluation company has been assigned to estimate the cost of rebuilding the airport .
Jihad Al-Daraji, a spokesman for the Civil Aviation Authority, said that discussions are currently underway with a French consortium company on the appropriate designs for this project, which will revive the province's economy and commercial movement and enhance the absorption of air transport between the governorates of Iraq and abroad .
The prime minister's financial advisor, Mazhar Muhammad Salih, told Al-Monitor, “Back in the 1950s, Mosul was a major economic center for the grain trade and the second most populous city in the country. At that time, its airport was the main center for tourism and trade in northern Iraq .
Salih added, "Mosul in particular and Nineveh Governorate in general is in dire need of a modern and developed civil airport that can enhance air transport in northern Iraq and is locally linked with airports in the Kurdistan region and the rest of the airports in the governorates of Iraq." This airport will prove to be a very important and vital outlet for tourism and trade in the province .”
Regarding the exceptions given to the Mosul airport project, Salih said, “Efforts to implement the Mosul Airport reconstruction project, which was part of the campaign to rebuild Nineveh after its liberation from terrorism, had failed due to excessive bureaucratic and routine administrative procedures. This led to delays in making decisions and obtaining approvals, which entail high additional costs. It is necessary to expedite the process of rebuilding the airport in order to avoid the loss of benefits and unjustified additional costs on the budget .”
Saleh said that the government had taken exceptional decisions by approving the implementation of the Mosul Airport project by finalizing contracts outside the well-known bureaucratic mechanisms and in agreement with the negotiating forces in the Council of Ministers .
Muhammad al-Hashimi, a researcher at the Union Research Center in Baghdad, told Al-Monitor, “The reconstruction of Mosul International Airport is a step in the right direction. Mosul is ranked second after Baghdad in terms of surface area and population.
The city also has its heritage and civilization, and its airport is among the oldest in the country since it was built in 1920 under British tutelage as a military airport. And then it developed to be a civilian airport in the year 1922 ».
Joseph Sliwa, a former parliament member from Nineveh province and a civil and political activist, told Al-Monitor, “The completion of the Nineveh Airport project is a good indicator and adds very necessary services to a region inhabited by more than 3 million people, as many Mosul residents who want to travel by air go to Erbil International Airport in Kurdistan Region .
Sliwa believes that the airport will be a cultural window for the province towards the world and will enhance the openness of the people of Mosul after their liberation from ISIS, especially the members of the Christian community who have suffered a lot .
They praised the need to protect the project from any attempts of corruption and extortion, stressing that "many commercial projects in Mosul are stumbling or failing despite the huge sums of money that have been allocated to them." Therefore, it is very necessary to apply accurate financial control and to ensure quick and good implementation of these projects .” 15 . views Added 08/01/2022 - 11:30 AM Update 08/01/2022 - https://economy-news.net/content.php?id=29096
Hard Currency Rises In Iraq.. 149250 Dinars Per 100 Dollars
Market Economy News-Baghdad The exchange rates of the US dollar against the Iraqi dinar stabilized, on Monday, on the main stock exchange in the capital, Baghdad, while it decreased in the Kurdistan Region .
The "Economy News" correspondent said that the central Al-Kifah and Al-Harithiya stock exchanges in Baghdad recorded this morning, 148,650 Iraqi dinars, compared to 100 US dollars, which are the same prices recorded on Sunday morning .
He added, that buying and selling prices have stabilized in banking shops in the local markets in Baghdad, where the selling price amounted to 149250 dinars per 100 dollars, while the purchase prices amounted to 148250 dinars .
In Erbil, the capital of the Kurdistan region, the dollar prices witnessed a decrease, as the selling price reached 148,550 dinars per 100 dollars, and the purchase price reached 148,450 dinars .
Views 93 Added 08/01/2022 - 10:48 AM Update 08/02/01 - 1:03 PM
https://economy-news.net/content.php?id=29094
Iraq Is The Largest Arab Exporter Of Crude Oil To Europe In July
Energy Economy News-Baghdad Iraq leads the Arab oil-producing countries in its oil exports to the European Union, while Russia came globally as the largest oil exporter to Europe last July .
According to S&P Global Commodity Insights , "Iraq came first in the Arab world as the largest oil exporter to the European Union in July, with an export rate of 490,000 barrels per day, followed by Algeria with an export rate of 390,000 barrels per day, and then Libya." And Saudi Arabia has an export rate of 300,000 barrels per day for each of them .”
Globally, Russia continues to lead the list of crude oil exporters to European countries, with 1.87 million barrels per day, America comes in second place with 1.3 million barrels per day, and Norway third, with an export rate of 790 thousand barrels per day . 108 . views Added 08/01/2022 - 9:49 AM Update 08/02/01 - 1:03 PM https://economy-news.net/content.php?id=29092
Iraqi Oil Informs Its Female Employees To Vacate The Ministry's Headquarters
Shafaq News/ On Monday, the Iraqi Oil Ministry directed its female employees to immediately evacuate the ministry's headquarters and return to their homes.
Ministry employees told Shafak News Agency, that the two general directors of the Department of Training, Development, Technical, Administration, Accounting, Exploration, Accountant and Legal.
They added that the directive came in the interest of the safety of the employees, for fear of any development of events.
For his part, the media office of the Ministry of Oil told Shafak News Agency that the ministry did not officially direct its employees in this regard, LINK