Iraq government releases $150-mil emergency funds to oil ministry

Iraq government releases $150-mil emergency funds to oil ministry

Baghdad (Platts)--3Jun2005


The interim Iraqi government of prime minister Ibrahim al-Jaafary has
allocated and released $150-mil in emergency funds to the ministry of oil to
enable it to initiate the implementation of some vital purchases as well as
some tasks and projects tabulated in the 2005 oil sector development plan,
ministry sources said Friday. 

The original plan was approved in late 2004 by the then provisional government
of Iyad Allawi and the then provisional assembly. The total allocation for the
oil sector was set at $2.7-bil and Iraqi dinars 450-bil in local currency
($300-mil), of which $1.7-bil and dinars 255-bil was set for the upstream
sector and the rest to finance projects in the downstream and distribution
sectors. Although the $150-mil allocation represents a small proportion of the
required funds, the ministry of planning recommended the release of
$650-mil--25% of the dollars portion as a first installment--and comes five
months late in the budget year.

"At least it is a start and it will enable us to start opening the letter of
credits to purchase the multitude of necessary items to keep the industry
working, such as manifolds, pipes, control panels, pumps, switchgear and so
on," said a senior planning source in the ministry. "But we will not use the
allocated funds at this stage to finance the large projects which have been
signed previously and awaiting funding such as the Hamrin oilfield development
project, till more funds become available and we are definitely going to keep
on demanding more allocations to get these projects moving forward as well as
the other projects which should be signed and ready in the future such as the
Subha/Luhais oilfield development project." The Southern Oil Company is also
expected to demand, and receive, the lion's share of any funds that become
available to allow the company to carry out work to reverse the decline in
production it suffered during the past six months and to lay the foundation
for an actual increases in future production.

The complete story was originally published in Platts Global Alert
http://www.globalalert.platts.com

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