The Dinar Daily, MONDAY March 16, 2015
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  1. #1

    The Dinar Daily, MONDAY March 16, 2015





    The Exchange Rate of Foreign Currency in Economic Feasibility Studies

    Below are the central controls related to the exchange rate of the foreign currency to convert the project inputs and outputs from foreign currency to its equivalent in the local currency, and that is by calculating the net discounted present value standard and the internal return on investments in economic analysis that governs investment projects that costs excess one million dinars.

    Estimate the shadow price of foreign currency:

    1. It is necessary to put central controls to amend the official exchange rate * to reflect the shadow price of the foreign currency, and that is considered one of the necessary requirements to implement the net discounted present value standard and the internal return rate on investment in the economic calculation stated in the instructions, paragraph nine.

    The central controls for adjusting market prices distinguished a group of outputs and inputs traded internationally, where the projects production or usage of them is reflected on the abundance of foreign currency in the economy and thus project outputs or inputs used of such are considered purely foreign currency outputs or inputs.

    * What is meant by exchange rate: the number of units of foreign currency, expressed in dollar per one dinar.In particular the following outputs and inputs of foreign currency were distinguished:


    • Export-outputs.
    • Outputs marketed locally that substitute imports.
    • Imported inputs.
    • Inputs produced locally that usually go to exports.
    • Foreign labor.


    According to the pricing rules the value of the output and input (traded) is calculated using export prices (FOB) and import prices (CIF), according to what is listed in the pricing rules.

    In other words the pricing rules calculate what the project produces from foreign currency (quantity of exports multiplied by the export price (FOB) in foreign currency or the quantity of substitute imports multiplied by the import price (CIF) in foreign currency, as well as what the project uses from foreign currency and imported inputs multiplied by the import price (CIF) in foreign currency …. etc.).

    In a later step, project outputs and inputs must be converted from the foreign currency to its equivalent in local currency (dinars) by using a specific exchange rate for the foreign currency.

    2. Justifications for exchange-rate adjustment: there are a number of important and powerful arguments which support the view that the official exchange rate reduces the real value of foreign currency for purposes of calculating the economic national profitability for investment projects and hence for the purposes of investment planning. It is demonstrated in this context to call for assessing the dinar for less than (3.208) dollar (official exchange rate) when assessing project outputs and inputs of traded goods of exports, substitute imports and imports… etc.

    The justifications to call for the use of an exchange rate that is lower than the official exchange rate are:


    • The use of an exchange rate that is lower than the official rate is the appropriate action at the investment planning level to translate the country’s economic strategy aiming at stimulating central investments in the sectors that encourage the development of non-oil exports, as well as sectors that encourage the expansion of domestic production base in order to reduce imports and compensate it with local commodities. This helps to reduce reliance on foreign exchange earnings from crude oil exports and increases the share of non-oil sectors in the local production.
    • The application of the amended exchange rate on project imported inputs will assist in directing investments away from aggregated sectors dependent on imported inputs and the preference of those sectors that rely on locally produced inputs.
    • The use of the amended exchange rate helps to correct the balance in favor of the traded goods sectors compared to non-traded goods.
    • The real exchange rate has declined rapidly since the early seventies, through rapid rise of the level of prices and local costs which led by the steadiness of the official exchange rate to change in prices and actual local rate costs that gave an advantage for imported goods at the expense of locally produced goods, meaning that it led to deterioration of the competitiveness of alternative replacement goods and export commodities.
    • This action shows that the official exchange rate overestimates the value of the dinar, compared to the foreign currency and from the promoting goods substituting imports and export commodities point of view of.


    And in support to this view is the state’s utilization and in a broad approach to the customs and quantitative protection policies especially for consumer goods, as well as export subsidies that exports have through an amended export exchange rate.

    3. Estimate the amended exchange rate of the Iraqi dinar to be used in technical and economical feasibility studies and for (1.134) dollar per dinar. This price should be approved for 3 years until re-appreciation by the competent authorities.



    The Republic of Iraq – Ministry of Planning

    and

    A "flashback recap" of a Live Q and A Call from about a year ago - on THE DAILY DINAR NEWS BLOG...

    In general terms – there were three main focal points of interest I wanted to cover and then allow listeners to ask whatever questions they liked.

    1) the SIGR report…


    2) the Gold Article…


    3) the IIER report…


    I started the conversation out last night by highlighting how crazy this campaign being fielded to contact our lawmakers and bank CEO’s and tell them how unfair it is they are getting to exchange (exchange is the right terminology BTW – NOT “CASH-IN”) at 32.00 per Dinar and we are not – is. It is nuts.


    Firstly, “they” are NOT being allowed to exchange “early” – or at 32.00 per Dinar. It makes you sound “stark raving MAD” to be caught saying such things. You would be better off barking at the moon. It is demeaning to the validity of a true currency play.


    Secondly, this is entirely the wrong way to approach them. I pointed out on the call that Poppy and I fielded a very successful such campaign a couple of years ago. However, we sat down and came up with a much different approach. It was designed to get answers and to approach our lawmakers with respect and as their constituents. Not like a bunch of lunatics. We had extraordinary participation (because it made sense) and we received a good response from lawmakers. It started the conversation in a reasonable manner.


    I asked one caller – “when was the last time you asked a banker for money and told him how unfair it was if he didn’t give it to you”??? Obviously – we chuckled…


    Another caller asked me if (as DC had relayed) – the “zero’s were raised” and the lower denominations were in circulation??


    I said plainly “no”…lower denominations being in circulation would (at the very least) imply there had been a value change. If there were no value change the lower denoms would not only be of little value, they would be such a hinderance – people might even throw them away just to get rid of them. So no – no lower denoms. I told the caller to check the
    CBI.iq website for “real” info on rate change.

    The “zero’s being raised” or “deleted” – as explained by any reasonable researcher, economist or authority – is simply the process removing the large (3 zero notes) from circulation.


    Referring to an Enorrste post from today on
    THE DINAR OBSERVER DAILY(you may want to put this on your favorites and check in several times a day – we to it often )

    “…I have never found a single article from the CBI or the IMF that equates “delete the zeros” to the idea of “move the decimal point.” Instead, the statements overwhelmingly come out to mean “remove the large notes from circulation.”


    Also – this recent internal memo put out by Wells Fargo is likely “push back” from this recent campaign. I pointed out that Pinnacle Bank published an article by an “affiliate” in their internal publication and then “highlighted it” in a similar internal memo a couple of years ago. It is just a defense mechanism. I’m sure Wells is tired of having their name dragged through the “internet rumor mill”. This is highly likely the reason for their vigorous denials about handling it in the future. They get so many useless calls – it isn’t worth the headache. Can you blame them??


    Further, for any bank, lawmaker, adviser or official to state the “Dinar is a scam” is nearly as foolish as some of the internet “Gurus”. It is the official currency of a COUNTRY. I pointed out (below) the post from yesterday’s
    DINAR OBSERVER DAILY
    – highlights page 94 of the quarterly SIGR report to THE US CONGRESS in April of 2012…
    __________________________________________________ _____________

    THIS REPORT WAS SENT TO CONGRESS LAST MAY. IT PLAINLY SHOWS IN THIS REPORT THEY EXPECTED THE DINAR TO REVALUE AT AROUND A DOLLAR IN 2013.

    We are seeing and hearing that the inflation rate is still climbing and they are pushing to get us our money?? This report is from page 84 of the massive SIGR report.





    BGG ~
    This is a screen shot from the “Special Inspector General for Iraq Reconstruction” – Apr 2012, quarterly report to Congress. For members of our Government to say they have no idea what is going on here – means they haven’t read some very basic documents presented them.
    __________________________________________________ ______________

    I pointed out (last night) this is a highly speculative investment. We are, in no way, guaranteed anything. However, this SIGR report gives us some valuable insights…

    1) This is information given to the US CONGRESS on a quarterly basis… I find it hard to believe such an information source would intentionally mislead Congress. They tend to frown on such behavior. Which goes directly to the validity of this adventure – against all advice from Wells Fargo or other such naysayers.

    2) It points out there having been a legitimate “plan” – or time frame in motion…having been projected to be done in 2013. We are obviously in “over time” now.

    3) It gives us an idea as to who is in charge…the CoM – or Council of Ministers. Who do they answer to?? Maliki. Period. When is he likely to push this forward?? Historically – he has been a “weak Dinar” policy advocate. However, rumor from his own inner circle admits he can’t win a third term in office without some currency reform.

    I fully expect him to use every tool in his “wheel house” to win – his recent moves in Anbar and the disputed territories prove as much. Currency reform has to be a “biggie”. Though this WAS their thinking a couple of months ago – there is no promise it is still part of their political calculus. We shall see.

    4) Though no guarantee of the actual future plan they wind up engaging – this report points out an increase in value that would have taken the Dinar from “one-tenth of a cent” to a value “of slightly less than $1″..

    __________________________________________________ ______________

    AND

    Coins put on the market !!



    Nora Albjara member of the committee of economy and investment in the House of Representatives revealed that the central bank completed its preparations for the issuance of metal coins of seven small groups, in conjunction with the implementation of the project to delete the three zeroes from the paper currency is currently in circulation.

    She said in her statement Albjara "The project will take between four and five years, and which will be the launch of the categories of small coins gradually."

    He predicted the financial expert Hilal Taan inflation rate declines, with the issuance of metal coins of small denominations in the daily financial transactions, remarkable that 3% of the value of inflation in Iraq due to the presence of large cash block.

    The economic expert on behalf of Jamil Anton, noted that he may not find metal coins accepted by a lot of Iraqis, especially young people, due to the existence of an entire generation of Iraqis had not trading coins due to stop use since the early nineties of the twentieth century

    waradana.com

    And

    CBI is preparing to issue a monetary metal parts

    Metal coins from the category of 25 fils were in circulation until the nineties of the last century

    Nora Albjara member of the committee of economy and investment in the House of Representatives revealed that the central bank completed its preparations for the issuance of metal coins of seven small groups, in conjunction with the implementation of the project to delete the three zeroes from the paper currency is currently in circulation.

    She said in her statement Albjara Radio Free Iraq, "said the project will take between four and five years, and which will be the launch of the categories of small coins gradually."

    He predicted the financial expert Hilal Taan inflation rate declines, with the issuance of metal coins of small denominations in the daily financial transactions, remarkable that 3% of the value of inflation in Iraq due to the presence of large cash block.

    The economic expert on behalf of Jamil Anton, noted that he may not find coins accepted by a lot of Iraqis, especially young people, due to the existence of an entire generation of Iraqis had not trading coins due to stop use since the early nineties of the twentieth century.

    https://www.iraqhurr.org/content/article/26666313.html

    and

    Another "FLASHBACK"...

    Economists Divided Over Deletion Of Zeros

    By Amina al-Dahabi for Al-Monitor.

    The Central Bank of Iraq (CBI) has been attempting to delete three zeros from the Iraqi currency since 2003. This project has raised many concerns among the Iraqi public and within the business community, and Iraqi economists are divided…

    …Haider al-Abadi, the head of the Iraqi parliamentary Finance Committee, told Al-Monitor that while deleting zeros from the current currency is possible, this has been postponed until after parliamentary elections. He noted that studies are being carried out to ensure that, following the currency change, counterfeiting is limited and that Iraqis don’t go back to trading in the old currency.

    The step to delete zeros from the currency has been postponed several times, leading the parliamentary Economic Committee to demand that the CBI accelerate this project, as Al-Sharqiya reported. In a news conference held July 6, the Economic Committee confirmed that the deletion of zeros will lead to an increase in the value of the Iraqi dinar and will have positive repercussions, including a reduction in unemployment and poverty rates in the country.

    ARTICLE LINK

    Crush Expected When Kuwaiti Banks Reopen Today

    March 24, 1991|From Reuters



    KUWAIT CITY, Kuwait — Thousands of Kuwaitis are expected to jam the country's banks today when they open for the first time since the end of the Iraqi occupation.

    Customers will be allowed to withdraw funds and to swap pre-invasion money for a new currency issued to make more than $1 billion in pre-invasion dinars stolen by the Iraqis worthless.

    "We expect a rush of people," said Issam Asousi, an executive with the Bank of Kuwait. He said it could be a chaotic first week because customers have a lot of questions about their accounts.

    Kuwaiti banks continued operating during the seven-month Iraqi occupation under managers brought in from Iraq, but they have been closed since the U.S.-led alliance ousted the Iraqi army from Kuwait a month ago.

    When the banks reopen today, customers will be able to withdraw up to 4,000 Kuwaiti dinars, equivalent to about $14,000 at pre-invasion exchange rates from their accounts, and to exchange a like amount for foreign currency.

    Balances of customers' accounts will go back to what they were on Aug. 1, a day before the invasion.

    Clients will not be able to exchange Iraqi currency issued during the occupation, when Baghdad pegged the rates of the strong Kuwaiti dinar to the far less valuable Iraqi dinar.

    The new Kuwaiti money will be exchanged for old at a one-to-one rate.

    https://articles.latimes.com/1991-03-..._kuwaiti-banks


    BGG ~ Thanks to wmawhite for some facts on the subject.

    Hi BGG,

    Just thought I would drop you an email. I listened to the call, and was interested in what was said about Kuwait, if I may - I will add my 2 cents worth.

    You were spot on with what you said, I have a close friend who's father made a killing on the KWD. He bought from people who had fled the country and he paid pennies on the dollar (we are in Australia). He took the chance that Iraq would be kicked back out and he was right.

    When the money was reinstated, he exchanged it for AUD at a rate in the mid 3s. The interesting thing about it is, Iraq invaded in November 1990 (I think), they were kicked back out at the end of Feb 1991, the banks reopened with a brand new KWD in late March, that's not a bad time frame to get a currency designed, printed and made ready to use, also the time that the old KWD was valid was initially only for 2 months, then extended to 6, so it was valid until Sept 1991, interesting I think.

    Also the other thing that seems to be a "fact" in Dinar land is Bill Clinton used the Kuwait RV to pay off the debt. However, Clinton was not President in 91, he did not take office until 93, even I know that and I am an Aussie.

    Anyway thanks for the site and enjoy listening to your calls.

    Kind Regards,
    Kevin



  2. #2

    Re: The Dinar Daily, MONDAY March 16, 2015

    CENTRAL BANK OF IRAQ

    CURRENCY CODE SELL BUY
    US dollar USD 1166.000 1164.000


    CURRENCY CODE SELL BUY
    US dollar USD 1166.000 1164.000
    Euro EUR 1232.695 1232.079
    British pound GBP 1725.913 1725.050
    Canadian dollar CAD 910.724 910.269
    Swiss franc CHF 1157.205 1156.627
    Swedish krona SEK 135.388 135.320
    Norwegian krone NOK 142.913 142.842
    Danish krone DKK 165.252 165.169
    Japanese yen JPY 9.602 9.597
    Special
    Drawing Rights
    SDR 1598.481 1597.682

    Indicative rates - 16.03.2015


    https://www.cbi.iq/

  3. #3

    Re: The Dinar Daily, MONDAY March 16, 2015

    Parliamentary Finance: Central Bank sent an appeal to the Federal Court on the articles in the draft budget



    Author: af Editor: br reporter: ms Number of Views: 48

    Tomorrow Press / Baghdad: the Finance Committee in the House of Representatives revealed, on Monday, providing the central bank appealed to the Federal Court on some of the project budget, which issued the Ministry of Finance instructed all ministries granted the right to exchange the law materials.

    The committee member said Masood Haider for "tomorrow Press", "The Ministry of Finance has issued all the instructions that the ministries granted the right to exchange within the federal budget for 2015," pointing out that "the Finance Committee will discuss these instructions and study in a detailed and accurate for total knowledge to the mechanism of exchange the terms of the paragraphs of the budget. "

    He added that "the paragraphs and provisions of the law the general budget valid and can not be disabled because of the appeal of the Federal Government intends to submit it to the Federal Court on some budget items."

    He pointed out that "the central bank introduced an appeal to the Federal Court on the material (46 and 50) of the budget bill in the atheist th of this month."

    https://translate.googleusercontent.com/translate_c?depth=1&hl=en&rurl=translate.google.com&sandbox=0&sl=ar&tl=en&u=https://www.faceiraq.com/inews.php%3Fid%3D3621737&usg=ALkJrhgtOsAjGG8Mq39zwupPgBJ6OvkK5Q

  4. #4

    Re: The Dinar Daily, MONDAY March 16, 2015



    RE-POST FROM YESTERDAY...THE REFERENCED BOX NUMBERS, ARE FROM IMF RELEASES IN YESTERDAYS NEWS FORUM....

    sczin11- COMMENTS AND OBSERVATIONS ON THE IMF MEETINGS, CONSULTATIONS, FROM YESTERDAY.... PLEASE READ BOXES 10, 25, 29 IN TODAYS NEWS FORUM!!! NOTE THE ITEMS OF CONCERN, REDUCING BUDGET DEFICIT, BY IMPOSITION OF TAXES....DONE, DONE, DONE....WE WERE TOLD!!...ARE THEY??? MOST OF WHAT WAS DISCUSSED, HAS BEEN STATED MULTIPLE TIMES, WRITTEN ABOUT MORE, AND WE WAIT TO SEE ACTIVATION/IMPLEMENTATION...

    LOOK WHO WAS AT THE MEETING??? ZABARI, MAHDI, AND........DRUM ROLL PLEASE.......THE GOVERNOR OF THE CENTRAL BANK,!!!!! DOES HE HAVE A NAME? THREE DIFFERENT VERSIONS, AND THE KEY HOLDER TO THE MONETARY REFORM OF THE NEW IRAQ, THE DEMOCRATIC SOVEREIGN, POWERHOUSE OF THE WORLD, THE COUNTRY SUPPOSEDLY TO HAVE THE MOST VALUABLE CURRENCY IN THE WORLD....NO NAME.??

    THE GOVERNOR OF THE CENTRAL BANK OF IRAQ... I GUESS HE IS NOT THAT IMPORTANT, AND DOESN'T DESERVE THE SAME RESPECT..... JUST SAYING!!!

    I WONDER WHO WAS REALLY THERE? IS IT POSSIBLE IT WAS.........


  5. #5

    Re: The Dinar Daily, MONDAY March 16, 2015

    Political Government surprise parliament draft a new law to Federal Court


    Deputies said they were surprised by the new B'msudh 'for the Law of the Federal Court by the Government Abadi, after the House of Representatives first reading of the draft law earlier.

    Revealed members of the Parliamentary Legal Committee on the most important changes that have taken place on the new draft, which summarized by making the presidency of the Federal Court of the powers of the Judicial Council, in contrast to attempts were the end of the previous session of the separation between the two positions, as well as to increase the number of members of the Court of 13, including 4 of Muslim Jurists who will be given the right to veto laws that are contrary to law.
    The former minister also said that the new draft states that the decisions taken by consensus within the court and not the majority.

    The Cabinet, headed by Haider al-Abadi, had voted on 24 February, the draft of the Federal Supreme Court Act to the House of Representatives after reviewed and audited by the competent ministerial committee.

    See more at: https://translate.googleusercontent.com/translate_c?depth=1&hl=en&rurl=translate.google.com&sandbox=0&sl=ar&tl=en&u=https://www.ikhnews.com/index.php%3Fpage%3Darticle%26id%3D137713&usg=ALkJrhgo2z6va94ActenoWUGZJ1eH82pOQ#sthash.H30A OnpI.dpuf

  6. #6

    Re: The Dinar Daily, MONDAY March 16, 2015

    Kuwait receives its consulate building in Basra, in preparation for the resumption of work in the coming days



    Long-Presse / Basra
    Said the governor of Basra Majed Nasraoui, on Monday, for the delivery of the Kuwaiti Consulate building in the province to the Kuwaiti ambassador to Iraq, Ghassan Al-Zawawi in preparation for the exercise of its work soon, with Zawawi expressed his intention to bury their differences and remove the "negative effects" caused by the former regime between the two countries policy.

    The governor of Basra Majed Nasraoui in an interview with the (long-Presse), said that "the province handed Kuwaiti former consulate building in Basra, which is located in the tax collector area to the Kuwaiti ambassador to Iraq, Ghassan Al-Zawawi," Moked that "Kuwaiti Consul in Basra will exercise its work during the next few days and will work to consolidate the political, economic and social relations between the two countries. "

    For his part, the Kuwaiti ambassador to Iraq, Ghassan Al-Zawawi in an interview with the (long-Presse), "The opening of the consulate in Basra will contribute to re-establishing ties such as patchwork in the seventies of the last century," he said, adding that "Kuwait have a relationship with the province of Basra by virtue of geographical proximity." .

    Zawawi said he "will present his credentials in the coming days," pointing to "make unremitting efforts to eliminate the negative effects of the policy of the former regime between the two countries."

    The Kuwaiti consulate in Basra, in the case of the sixth in the order to open consulates in the province after Egyptian, Iranian, Russian, American and Turkish counterparts.

    https://www.almadapress.com/ar/news/45652/%D8%A7%D9%84%D9%83%D9%88%D9%8A%D8%AA-%D8%AA%D8%AA%D8%B3%D9%84%D9%85-%D9%85%D8%A8%D9%86%D9%89-%D9%82%D9%86%D8%B5%D9%84%D9%8A%D8%AA%D9%87%D8%A7-%D9%81%D9%8A-%D8%A7%D9%84%D8%A8%D8%B5%D8%B1

  7. #7

    Re: The Dinar Daily, MONDAY March 16, 2015

    Speaker of Parliament calls for MPs not to "climb to the platform of the presidency."



    Long-Presse / Baghdad The head of the Iraqi Council of Representatives Saleem al-Jubouri, on Monday, that duty protections personal is to protect the President of the Council, without prejudice to the MPs, and in preventing the entry protections own except escorts "unarmed" The Council, called for members of the House of Representatives not to climb to the "chairman of the parliament platform."

    Said Saleem al-Jubouri, through the House of Representatives 22 hearing, which was held today, said that "the duty of the protections of personal is to protect the President of the Council without prejudice to MPs", stressing that "preventing protections for the Presidency and the heads of parliamentary blocs to enter the parliament hall except escorts unarmed members of the body presidency. "

    He called al-Jubouri, the House of Representatives to "commitment not to climb to the platform Presidency of the Council of Representatives."

    Came claim Jubouri two days of altercation after signed through parliament the 21st session, which was held on Saturday, (March 14, 2015), with the MP of the Sadrist bloc Free Hussein al-Awadi on the back of organic resolved and the Presidency Services Committee and Parliamentary reconstruction as intervention in a timely manner a protect the President of the Parliament to prevent the MP-Awadi of boarding the platform, which raised the ire of Congress Sadrists, while the chairman of the parliament decided to adjourn the meeting to Monday, after the departure of al-Jubouri, the session following the argument.

    The Iraqi Council of Representatives held on Monday (March 16, 2015), its 22-second legislative term of the first legislative year, led by its President Salim al-Jubouri, and the presence of 230 deputies, while the agenda of the meeting included reading of the Youth and Sports Committee report on the work of the Committee and vote on bills and reading the first and second of five bills.

    https://www.almadapress.com/ar/news/45641/%D8%B1%D8%A6%D9%8A%D8%B3-%D8%A7%D9%84%D8%A8%D8%B1%D9%84%D9%85%D8%A7%D9%86-%D9%8A%D8%B7%D8%A7%D9%84%D8%A8-%D8%A7%D9%84%D9%86%D9%88%D8%A7%D8%A8-%D8%A8%D8%B9%D8%AF%D9%85-%D8%A7%D9%84%D8%B5

  8. #8

    Re: The Dinar Daily, MONDAY March 16, 2015


  9. #9
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    Re: The Dinar Daily, MONDAY March 16, 2015

    A BUDGETARY TIPPING POINT: IRAQI-KURDISH OIL DEAL POTENTIALLY 'UNRAVELING'

    A 4-month-old oil deal between Baghdad and the semi-autonomous Kurdistan region is close to unraveling after payments from the capital dried up, prompting Irbil to threaten to sue buyers and ramp up independent oil exports.

    The dispute highlights fundamental differences between the two sides over who controls oil resources and revenues and will reinforce the views of many Iraqi watchers that Kurdistan would seek bigger if not full independence from Baghdad one day.

    Baghdad cut budget payments to the Kurds in January 2014 as punishment for their attempts to export oil independently, plunging the semi-autonomous region into economic crisis and forcing it to seek loans at home and abroad.

    Under a new deal, the Kurds committed to export an average of 550,000 barrels per day in 2015, in exchange for Baghdad resuming budget payments of over $1 billion a month to Kurdistan in 2015.

    The agreement was hailed as a breakthrough that would help Iraq increase oil exports at a time when revenues are strained by low global prices and the cost of financing a war against ISIS insurgents in the north and west.

    But so far this year, Baghdad has paid only a fraction of the money, arguing that the oil handed over to SOMO does not match the expected volumes.

    For its part, Kurdistan insists it has supplied almost 97 percent of the agreed volumes and is working to raise volumes further despite receiving no payments. Sources in Irbil are saying they will use all possible means to recoup the money.

    “We are not being treated as part of the country but as a commercial oil producer,” a high-level Kurdish oil source said. “In case we don’t get the payments, we will have to go after the buyers because this crude still belongs to us.”

    In the past few months, SOMO sold Kurdish crude to buyers including Turkey’s Tupras, Swiss-based trader Litasco, Spain’s Repsol, Italy’s Eni and BP.

    Last year, SOMO threatened to sue direct buyers of Kurdish oil and has successfully stopped some sales.

    The Kurds’ latest threat to do the same may pose legal challenges for companies who have bought oil through SOMO because the deal between Baghdad and Irbil was preliminary and did not give clarity over who owns the oil.

    According to shipping documents seen by Reuters, oil transferred to SOMO still belongs to the Kurdistan Regional Government.

    Another potential legal pitfall is that oil sold by SOMO from the Turkish port of Ceyhan is being marketed as Kirkuk under the name of the same field in northern Iraq. However, only a third of oil in the pipeline is Kirkuk while the rest is different grades from other KRG new fields.

    The preliminary deal in December also did not address debts owed to listed oil companies like Genel, which helped Kurdistan develop its fields. Baghdad sees those contracts as illegal even though SOMO is currently selling crude from those deposits to buyers in Europe and beyond.

    Tensions spilled into the open this week at a forum in the Kurdish city of Suleimaniyah, where Iraq oil minister Adel Abdel Mehdi said Kurdista n had handed only some of the oil it pumped to Ceyhan over to SOMO and was exporting the rest independently. Kurdish ministerAshti Hawrami said the region was committed to the deal, but since Baghdad was not sending enough money, the heavily indebted region was forced to sell some oil to repay creditors.

    “Can somebody please explain to me why we are still being punished?” Hawrami asked. “If we continue receiving this little, what will happen to this relationship?”

    Both tried to end on a conciliatory note saying they would make the deal work.
    Kurdistan has seen an inflow of over a million refugees from Iraq and Syria and had to raise billions of dollars via loans and oil export pre-payment deals with oil firms, trading houses, banks and Turkey to cover its budget shortfalls.

    If the oil deal between Baghdad and Irbil collapses, the chances are high the KRG, which under the December deal currently sells 80,000-100,000 bpd independently from SOMO, will be moving back to ramping up independent sales.

    “After April, the KRG would be technically able to export 825,000 bpd via its own pipeline system,” a source in the KRG said. “We would be able to fully cover our budget needs with those exports by tightening our spending and providing our fighting forces their salaries on time.”


    https://www.iraqdailyjournal.com/story-z10461086

  10. #10

    Re: The Dinar Daily, MONDAY March 16, 2015

    Oil Ministry: Iraq is obliged to pay dues of international oil companies



    Khandan -
    The spokesman for the Iraqi Oil Ministry, Assem Jihad, the ministry will continue to pay the debts of the international oil companies operating in Iraq dues. , said Assem Jihad, said that "the value of the amounts of those companies is $ 20 billion, has the Iraqi government worked on a new mechanism for the payment of this debt overhang" asserting that "the government's approval of the sale of treasury bonds worth $ 12 billion to pay off this debt."

    He said a spokesman for the Ministry of Oil of the Iraqi Media Network, that "Iraq is ready to fulfill its obligations of international oil companies," revealing "a meeting between the ministries of oil and Finance and the Central Bank to issue bonds $ 12 billion. " He pointed out that "these companies are working to develop the oil fields and increase production," noting that he would "pay the first bonds this month, and dues to be shaped according to the international oil prices."

    https://www.xendan.org/arabic/drejaA.aspx?=hewal&jmara=10124&Jor=2

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