Tuesday AM Iraq Economy News Highlights 6-21-22

Parliamentary Disputes Return With The Implementation Of The Food Security Law Imminent

Posted On2022-06-21 By Sotaliraq   Baghdad/ Saif Abdullah  Days after enacting the Food Security Law in the House of Representatives, the law oscillates between supporters and opponents, parliamentary circles welcomed the legislation of the law, while other circles revealed a great waste of public money.

The law will enter into force after approval by the President of the Republic, as stipulated in one of its articles, which necessitated its subsequent publication in the Official Gazette.

Excess money

In this regard, KDP member Mahdi Abdul-Karim confirmed that the emergency security law and the governorates' quotas in it are surplus funds that have nothing to do with the budget law.

Abdul Karim said in an exclusive interview with (Al-Mada) that "the allocations included in the emergency security law will be for the necessary needs and for the conduct of daily and important matters until the approval of the budget law."

Abdul Karim added, "The money that has been allocated to the governorates in the Food Security Law is a special need, whether it is for trade or for electricity, and the rest are considered suspended projects."

Waste of public money

In turn, a member of the House of Representatives from Basra Governorate, Zahra Al-Bajari, confirmed that the funds that were allocated in the emergency support law are the funds of the southern governorates.

Al-Bajari said in an exclusive interview with Al-Mada that "the emergency support law and the money that came in it are the money of the southern governorates, as it is the difference in oil prices, which has witnessed a significant increase in the current period and thus provided financial liquidity to the government."

Al-Bajari added, "The funds were supposed to be approved in the Food Security Law through the 2022 budget law," noting that "these amounts that were included in the emergency security law, amounting to 25 trillion, are a surplus of what was spent in the 2021 budget."

She explained, "These funds are mainly allocated to certain matters without oversight and without final accounts, and therefore they are considered waste."

The amount is too big

In addition, the researcher in economic affairs, Nabil Jabbar Al-Ali, confirmed that the amount of money that was allocated in the emergency security law for the governorates is a good number.

]Al-Ali said in an exclusive interview with (Al-Mada), that “what has been allocated to the development projects of the regions for the governorates not connected to a region, as well as the petro-dollar funds and even the Dhi Qar Fund and the reconstruction of the liberated governorates amounted to 10 trillion dinars, which is not small, but rather sufficient to establish nearly 10,000 schools. And enough to establish nearly 200 hospitals.”

He added, "These allocations are not the only ones mentioned in the Food Security and Development Law, but rather they are additional, and the main allocations are also equivalent to approximately 20 trillion and part of them are to complete previous projects, and the food security allocation is for new projects."

Al-Ali pointed out that "the allocated amount is very large, and even the governorates may not be able to spend it completely, which is what we are accustomed to every year, as the governorates always take the initiative to return the money to the state coffers."

On Wednesday (June 8, 2022), the Iraqi parliament voted to legislate the emergency support law for food security and development, which was prepared by the Parliamentary Finance Committee.  LINK

US Pressure In Vain.. Russia Is Flooding Asia With Oil, And Iraq Is Among The Beneficiaries

Posted On2022-06-21 By Sotaliraq    The United States is exerting "useless" pressure on Asian countries, including India, in order not to buy oil from Russia, but Russian oil has become the second largest source for the Indian market, directly after Iraqi oil.

The American newspaper "Midland Daily News" indicated in a report that India and other Asian countries have become a vital major source of oil revenues for Russia, despite the strong pressure exerted by the United States not to increase their imports of Russian oil, at a time when European countries stopped importing them. Russian oil, in compliance with sanctions against Moscow over its war on Ukraine.

The newspaper pointed out that these sales enhance the financial returns of Russian exports at a time when Washington and its allies are trying to limit financial flows into the Russian treasury, which finances its military campaign against Ukraine.

Meanwhile, the US Associated Press quoted the Helsinki-based Finnish Research and Energy Institute that Russia generated 93 billion euros (97.4 billion dollars) in revenue from oil exports in the first 100 days of its invasion of Ukraine, despite a decline in export levels.

The report indicated that these revenues constitute 40% of the Russian state budget, and oil exports thus contribute as a major factor enabling the Russian army to continue its war.

The US agency indicated that oil-starved India, with a population of 1.4 billion people, consumed nearly 60 million barrels of Russian oil during 2022 so far, compared to 12 million barrels in the whole of 2021, according to the figures shown by "Kepler Company" for analysis. The data on basic commodities, while shipments to other Asian countries, such as China, have increased in recent months, but to a lesser extent.

The report recalled a statement by the Sri Lankan Prime Minister, Ranil Wickremesinghe, who said recently that his country may have to buy more oil from Russia while it is searching with difficulty for fuel to keep the economic wheel going in light of a bad economic crisis.

Meanwhile, India's Free Express Journal reported that Russia continues to make large sums of money selling oil and gas, despite being subjected to tougher sanctions around the world since the invasion.

The Indian report indicated that the Indian contracts for the purchase of Ural crude oil, which is the most common type of export from Russia, during the months of March, April, May and June, in addition to expectations for delivery in July and August (about 66.5 million barrels in total), exceeding the total amount purchased during the whole of 2021.

After the report indicated that India's imports of Russian oil rose from 100,000 barrels per day in February to 370,000 barrels per day in April, and then to 870,000 barrels per day in May.

The report added that Russian oil imports have now become India's second largest source after imports from Iraq, adding that India is the third largest consumer of oil in the world, and 80% of it is imported from abroad.   LINK

Iraq Raises Its Holdings Of US Bonds To More Than Two Billion Dollars

Shafaq News/ The US Treasury announced, on Tuesday, that Iraq's possession of US bonds increased by more than two billion dollars during the month of April.

The Treasury said in its latest schedule, seen by Shafak News Agency, that "Iraq's possession of US Treasury bonds for the month of April of 2022 increased by $2 billion and 107 million, or by 8.04 percent, to reach $28.310 billion, after it was 26.203 billion in the month of March." ", indicating that "these bonds also rose from the same month last year 2021, when Iraq's possession of bonds amounted to 19.3 billion dollars."

She added that "Iraqi bonds, including long-term guarantees amounting to 12.405 billion dollars, and short-term guarantees amounting to 15.905 billion dollars," noting that "these bonds represent 0.4% of the world's bonds."

In the Arab world, Saudi Arabia is at the forefront of the most possessing countries, reaching $115,743 billion, Kuwait second with $46.134 billion, the UAE third with 41.739, then Iraq fourth, Oman fifth with $5.993 billion, and Morocco with $3.697 billion, according to the US Treasury statement.

And she pointed out that "the largest holder of US bonds is Japan, at $1,218.517 trillion, followed by China, at $1,003.409 trillion, followed by the United Kingdom, at $612.695 billion, and Ireland, at $309.630 billion." LINK

Shell: Increased Gas Production In Iraq Depends On Three Oil Fields

Shafaq News/ The Chairman of the Board of Directors of the Shell Group of Companies in Iraq and the UAE, Ali Al-Janabi, said that Shell's joint venture plans to obtain Iraqi gas to intensify its operations depend on three southern oil fields that reach their peak production level to allow the joint venture to process more associated gas.

He added in a press statement, "Under the contract with the Iraqi government, the Basra Gas Company is supposed to increase the current gas processing capacity from about 1 billion cubic feet per day to 2 billion cubic feet per day by processing gas from West Qurna 1 and Rumaila." Al-Zubayr is in southern Iraq.

Al-Janabi explained that "BGC (Basra Gas Company) is currently working to start operating two crews, each with a capacity of 200 million cubic feet per day by the second half of next year, two new crews out of five that are supposed to be built to reach 2 billion cubic feet. / day".

"We're doing a number of studies at the moment looking at Crew 3, but very few are related to the type of infrastructure required, and very few are actually related to the primary production and primary production available today to support from those three fields," he continued.

BGC is a 25-year joint venture that includes the state-owned South Gas Company with a 51% stake, Shell with 44% and Mitsubishi Corp. with 5%.

Al-Janabi wondered, is it possible for the estimated oil fields to reach the agreed-upon peak level? And in what time frame? “If not, we will need to look at other potential areas, and that is part of the contract. There is no point in setting up the capacity today and leaving it idle.”

Oil Minister Ihsan Ismail said on June 19 that Iraq hopes to increase its oil production capacity to 8 million barrels per day in the year 2027. He previously gave various timetables for reaching this goal, which depends in part on agreements with international oil companies about Peak levels for the fields in which they work mainly in southern Iraq.

Iraq, with a production capacity of 5 million barrels per day, mainly produces associated gas from oil, and the Basrah Gas Company processes about 30% of the gas produced in Iraq.  However, Iraq remains the world's second largest gas flaring country after Russia, according to the World Bank.   LINK

Oil “Celebrates” The Export Of The First Shipment Of “Semi-Cooled” Gas: We Will Enter New Global Markets

Shafaq News / The Ministry of Oil announced today, Monday, the export of "semi-cooled" liquid gas for the first time from Basra Gas Company, southern Iraq, while the director of the company described the export as a "great achievement" to double Iraqi exports globally and enter new global markets that deal with this type of oil. Gas.

The media office of the Ministry of Oil said in a statement received by Shafaq News Agency, "In an achievement that is being achieved for the first time, the Basra Gas Company began exporting the first shipment of semi-cooled liquid gas through the port of Umm Qasr today, Monday."

The statement quoted the director of the company, Malcolm Mays, as saying that "it is a historic moment recorded by the Basra Gas Company by exporting the first shipment of semi-cooled liquid gas, which is a great achievement," noting that "this came as a result of working hard and continuously to achieve the strategic goal through the rehabilitation of the port Umm Qasr and equipping it with the necessary refrigeration units to be used in export operations.

Maes added, "Today, we are able to load and export liquid gas, both compressed and semi-cooled, on board tankers," noting that "this step gives us flexibility and the opportunity to triple our exports globally via tankers, and it will double the amount exported per shipment."

"We will also gain access to many international markets that deal exclusively with shipments of semi-cooled gas," Maes added.

And the statement of the Ministry of Oil continued, "Iraq has become one of the countries that export liquid gas instead of importing it, and since 2016, this has generated additional revenues for the national economy." LINK

Low Gold Prices In The Iraqi Markets

Shafaq News/ "Foreign and Iraqi" gold prices decreased in the local markets, today, Tuesday, (June 21, 2022).

Shafak News Agency correspondent said that gold prices in the wholesale markets on Al-Nahr Street in the capital, Baghdad, recorded this morning, the selling price of one weight of 21 karat of Gulf, Turkish and European gold is 378 thousand dinars, and the purchase price is 374 thousand, while the selling prices for yesterday, Monday, were 380 thousand. Dinars per weight.

And our correspondent indicated that the selling price of one 21 carat weight of Iraqi gold also decreased at 338 thousand dinars, and the purchase price reached 334 thousand.

With regard to gold prices in the goldsmiths’ shops, the selling price of a 21-carat Gulf gold weight ranged between 380 thousand and 390 thousand dinars, and the selling price ranged from an Iraqi gold weight between 340 thousand and 350 thousand dinars.  It is equal to one mithqal of gold (five grams).  LINK