Thread: Iraq/Dinar News. before Febuary 2nd 2006

Iraqis: Oil Law Won't Favor Americans



Saturday January 27, 10:13 PM EST


BAGHDAD, Iraq (AP) — Iraqi officials say a hotly debated proposed oil law will not favor Americans but acknowledge that foreign companies will be allowed to take their profits out of the country — an incentive to draw foreign investment.

The Oil Ministry has been struggling for months to reach a compromise over draft legislation to govern Iraq's most important industry and pave the way for much-needed investment and know-how to revitalize the devastated infrastructure. But the measure faces strong objections by ethnic Kurds and concern about American influence in the sector.

Published reports in the Middle East said the proposal would provide for so-called product sharing agreements that would give international oil firms 70 percent of the oil revenues to recover their initial investments and subsequently allow them 20 percent of the profits without any tax or restrictions on transferring funds abroad.



"Without a decisive military victory, the U.S. occupation of Iraq seems to be about to grab its oil prize by establishing a new sharing arrangement," the English-language Yemen Observer said Saturday, echoing a frequent criticism that the U.S.-led invasion was aimed in part at capturing Iraq's oil.

Iraqi officials denied that the proposed law would favor Americans but stressed that it would set terms aimed at attracting international funds and know-how to an industry that faces a rampant insurgency and struggled even before the war due to sweeping U.N. sanctions imposed after Saddam Hussein's 1990 invasion of Kuwait.

Trade Minister Abed Falah al-Sudani told The Associated Press that American companies will be among those bidding for contracts under the proposed law and the Iraqis will "take the best offer ... and take into consideration the experience of the company."

He did not specify monetary terms but said "foreign companies will be able to win concessions for a long time," without elaborating.

"Iraq's economy has suffered because of the security situation and the economic laws, but we now want to implement laws that reform the country and reform the economy. These laws will increase the growth of the economy," he said.

Prime Minister Nouri al-Maliki has pressed hard for a new oil law to be passed since he came to office on May 20. And President Bush stepped up the pressure on the Iraqis to pass legislation to share oil revenues among all Iraqis in announcing his new Iraq strategy earlier this month.

Iraqi officials also have struggled to overcome strong objections by ethnic Kurds in the oil-rich north who are reluctant to give up regional control.

On Jan. 18, the Oil Ministry said the law was nearly ready to be submitted to the Cabinet and expressed hope it could be ratified by parliament within a month.

But ministry spokesman Assem Jihad said Friday the measure had been delayed by unspecified "differences among some groups." He said the ministry hoped the differences could be overcome so parliament could approve the bill before a monthlong recess Feb. 10.

The distribution of oil revenues and central control over contracts are believed among the key sticking points.

Kurdish lawmaker Mahmoud Othman pointed out that the constitution passed last year provided for a Kurdish federation in the north that would co-manage existing oil fields along with the central government and have full control over new ones. Shiites would control new oil fields in their southern regions — terms that have drawn objections from the disaffected Sunni minority.

Othman said the Kurds want the final say in signing contracts with foreign oil companies for projects in their area, signaling opposition to plans to give full control over contracts to a central oil committee.

"If they don't amend the law or the current draft or reach a mutual agreement, the Kurdish side will not accept it," Othman said.

Jihad said a Kurdish delegation will visit Baghdad to try to resolve some outstanding issues.

"The Kurds talk about this issue as if they are from another country while they are part of the Iraqi government and parliament. They want bigger share for Kurdistan regarding the oil revenues."

Negotiators also are stuck over taxes and the terms for agreements with international companies, as well as concerns that American and other multinational firms will get a disproportionate share of the profits.

Jihad dismissed claims that the proposed law would allow 70 percent of Iraq's oil to be sold to U.S. or other foreign oil companies but conceded that they would not face restrictions in taking profits outside Iraq.

He said the proposed law would establish that central product sharing agreements, or PSAs, would be negotiated with the companies on an individual basis.

"Some are trying to give a distorted idea about the new law that aims at serving Iraq's interests. Such reports are baseless," he said. "We should differentiate between monopoly and investment."

"The foreign companies can take their profits outside Iraq without any restriction because the aim of the law is to encourage investment," he said.

He said the question of taxes was still being negotiated, adding that the law provides a two-year tax exemption for general investment projects but no decision had been made on whether they should tax oil investments.

"This law protects both the full rights of the investors and of the Iraqi government," he said.

Iraq is believed to be producing around 2.2 million barrels of oil a day and exports about 1.5 million, well below prewar levels of 2.5 to 3 million barrels a day.

Some legislators pointed out that Iraq is desperate and needs all the help it can get.

"Foreign companies are welcome. American companies have the experience and they have people on the ground in Iraq. American companies have the courage to come into the market," said Amrah al-Baldawi, a member of the parliament's economic committee.

———

Associated Press writers Qassim Abdul-Zahra, Sameer N. Yacoub in Baghdad and Yahya Barzani in Sulaimaniyah contributed to this report.

Minister of Finance : seven billion value of government support for petroleum products during this year's budget

Mr. Baqir Jabr counterpart, Minister of Finance that the government is continuing to support oil derivatives through the allocation of seven billion dollars to support oil products.
He pointed out that 2007 will be lifted Mizanihame support from the derivatives Alenaftyhama with regard to the application of a new salary stressed that the ministry decided to strike work under a new salary from this month, pointing to the allocation of amounts necessary.

In regard to the new policy pursued by the Central Bank of Iraq and to raise the value of the Iraqi dinar through the opening of the auction's daily buying and selling of foreign currencies minister explained that this policy aimed to raise the value of the Iraqi dinar against other currencies, especially the dollar through a fixed exchange rate of exchange and the value of "1260" dinars to the dollar with a financial policy for the Iraqi dinar to normal, pointing out that the House did not approve a plan of implementation so far.
He added : that the government had allocated in the budget for the current year, three billion dollars to cover the costs of construction of new lines and maintenance of the filter with the current allocation of $ 300 million for the purchase of kerosene.
The Iraqi Oil Ministry had announced earlier in the termination of negotiations with foreign companies for the construction of three new division for refining crude oil in the cities of Sulaymaniyah and Karbala and Nasiriyah to the tune of three billion dollars to secure the domestic consumption of oil derivatives.

Translated version of http://www.newsabah.com/paper.php?name=News&file=categories&op=newindex&ca tid=20


WOW WHAT DO YOU THINK OF THE BOLDED!!!?!!!

Allocation of three billion for the construction of new division

Finance Minister announced the allocation of the Iraqi three billion dollars of the budget for the current fiscal 2007 for the construction of a new division for refining crude oil and renovate existing refineries to meet the shortfall in securing oil derivatives,

He added that the government had allocated funds to cover the costs of construction of new lines and maintenance of the filter with the current allocation of $ 300 million for the purchase of kerosene.
It is noteworthy that the Iraqi Ministry of Oil has announced an end to negotiations with foreign companies for the construction of three new division for refining crude oil in the cities of Sulaymaniyah and Karbala and Nasiriyah to secure domestic consumption of oil derivatives.


Translated version of http://www.newsabah.com/paper.php?name=News&file=categories&op=newindex&ca tid=20

Originally Posted by $onedaysoon$

Minister of Finance : seven billion value of government support for petroleum products during this year's budget

Mr. Baqir Jabr counterpart, Minister of Finance that the government is continuing to support oil derivatives through the allocation of seven billion dollars to support oil products.
He pointed out that 2007 will be lifted Mizanihame support from the derivatives Alenaftyhama with regard to the application of a new salary stressed that the ministry decided to strike work under a new salary from this month, pointing to the allocation of amounts necessary.

In regard to the new policy pursued by the Central Bank of Iraq and to raise the value of the Iraqi dinar through the opening of the auction's daily buying and selling of foreign currencies minister explained that this policy aimed to raise the value of the Iraqi dinar against other currencies, especially the dollar through a fixed exchange rate of exchange and the value of "1260" dinars to the dollar with a financial policy for the Iraqi dinar to normal, pointing out that the House did not approve a plan of implementation so far.
He added : that the government had allocated in the budget for the current year, three billion dollars to cover the costs of construction of new lines and maintenance of the filter with the current allocation of $ 300 million for the purchase of kerosene.
The Iraqi Oil Ministry had announced earlier in the termination of negotiations with foreign companies for the construction of three new division for refining crude oil in the cities of Sulaymaniyah and Karbala and Nasiriyah to the tune of three billion dollars to secure the domestic consumption of oil derivatives.

Translated version of http://www.newsabah.com/paper.php?name=News&file=categories&op=newindex&ca tid=20


WOW WHAT DO YOU THINK OF THE BOLDED!!!?!!!

Backs up what we have been thinking, the RV is in the budget! Now if they can just find a way to agree on who will get how much of the budget and finally get it passed. I think SGS is correct, they will pass the budget this Saturday and implement the RV on Sunday!

Originally Posted by worf

I sure hope that is right. I could use a big fat r/v next week, how about the rest of you?

worf

A big fat r/v and the SuperBowl on the same day would be nice!! I may have to stock up on extra beer!!

Originally Posted by danny51

A big fat r/v and the SuperBowl on the same day would be nice!! I may have to stock up on extra beer!!

I'm sorry Danny, but there is no such thing as "extra" beer.

Originally Posted by One Oar

I'm sorry Danny, but there is no such thing as "extra" beer.

amen. nor wine either. Happy birthday to Mozart, Robert Burns and me. A late BD present next weekend would be just fine by me!

Originally Posted by lewscrew

Backs up what we have been thinking, the RV is in the budget! Now if they can just find a way to agree on who will get how much of the budget and finally get it passed. I think SGS is correct, they will pass the budget this Saturday and implement the RV on Sunday!

That would be the 4th of Feb. Plenty of time before the Feb. 7th WTO meeting. And I also believe, before the a March 1st deadline of the Budget. Corrections welcome.

what about the part where they said it was going to be 1000 and take 3 yrs to get there. many have mentioned that it is disinformation to shake loose investors. there arent that many investors in the grand scheme of things.

Originally Posted by lglwzrd

what about the part where they said it was going to be 1000 and take 3 yrs to get there. many have mentioned that it is disinformation to shake loose investors. there arent that many investors in the grand scheme of things.

thats a lousy roi... thats it the cbi wins im shook loose... who wants my dinar... $.50 : 1 gets it all...