Oil issues in Iraq's agreement with the IMF

8/14/2016 0:00

Ahmed Musa translation - Khalid Qasim

IMF provides part of its agreement with Iraq, the recent loan of 5.34 billion dollars, focuses on the implementation of economic and financial policies to help the country deal with falling oil prices and ensuring debt sustainability.

The agreement includes, in regards to the oil sector, specific obligations Iraq must fulfill them and relate to three aspects are arrears of international oil companies, as it confirms the IMF on the continued implementation of the oil investment was financed mainly from the accumulation of arrears of international oil companies. Thus Iraq has accumulated more than $ 3.5 billion by the end of December 2015, the arrears of those companies belonging to the licensing contracts, and the amount rose to 4.67 billion dollars by the end of last March.

Payment of arrears

The Oil Ministry also paid all the arrears from last year to the Basra Gas Company, amounting to $ 204 million, it is assumed that it had paid arrears of this year until the end of last May, amounting to $ 140 million and paid the remainder of the amount of gas purchases for the current year and $ 700 million, used 145 million at least $ from its investment budget for the current year to finance investments to reduce flammable gas company's project.

In order to facilitate the implementation of the budget sharing agreement, the Governments of Iraq and the Kurdistan region to consider into account the receipt of the net amounts received by the province from oil exports, which made the last government plans to audited by international auditing companies with effect from 1 July.

Exploration areas

Awarded four exploration areas in the fourth licensing round in 2012, and work was continuing in three of them during the first half of this year. No progress was made in the eighth region (provinces of Diyala and Wasit) mentioned period due to the security situation and the factor «Daash» which impact on activity in Diyala.

Unlike the eighth region, the region has made remarkable progress ninth. And witnessed the signing of an agreement last April to export oil sales between SOMO and a consortium consisting of company Kuwait Energy Company 60 percent, and Dragon Oil Holdings Ltd., 30 percent, and the Public Egyptian oil 10 percent.

It is worth mentioning that the first exploratory well in the region, a ninth «Fayha 1» may dig in March 2014, and led to a large Bchehri September and December of the same year oil explorations.

The two companies began Russia's Lukoil and Inpex of Japan drilled the first exploration well to them during the last region of the tenth of April. While Russian Bachinvt company and its partner Premier Oil UK completed the same month of field seismic surveys in the region 12 as part of the geological exploration approved by the Ministry of Oil and start experimental drilling at the end of the current year's program.

Associated gas

Associated gas production amounted to 2628 million cubic feet per day during the first five months of this year: 84 percent of it from the southern oil fields, while the remainder comes from the North Oil Company fields. Of that total, there are 1714 million cubic feet burn, representing 65 percent of the total gas production associated.

Thanks to exports of new condenser and gas liquid gas to the joint «Basra Gas Company» project, which increased the processed gas from 400 million cubic feet to 600 million cubic feet between June 2013 and the time of writing the report.

Undersecretary of the Ministry of Oil for the gas industry Hamid Younis confirmed that the gas sector has become self-sufficient in the production of liquid gas, the productivity of 5,000 tons and exported quantities of condensed gas card can be used as a raw material in the petrochemical industry, in addition to the growth of designer dry gas production for electric power generators in the country, reaching a production of Dry gas in mid-May 1100 million cubic feet per day.