Thursday, 19 Apr 2018
Business

Iraq pays debt to contractors after rising oil prices

he decided Iraq To pay part of its debts to contractors, taking advantage of the large increase in oil revenues after the rise in prices due to regional tensions and the decline in stock in the market.
Local newspapers reported that Prime Minister Haider Abadi ordered on Monday to monitor all amounts allocated to contractors by 30 percent in the form of government bonds.
“According to the directives of Prime Minister Haider Abadi, Acting Minister of Finance, all amounts allocated according to the national bonds of contractors were monitored by 30% according to the federal budget law of 2018 and all governorates, ministries and non-affiliated bodies.
According to the site “Alsumaria” that the Ministry of Finance has already started monitoring 30% of the receivables of contractors’ bonds in implementation of the federal budget law.
Article 38 / III of the Financial Budget Law of 2018 stated that “the allocations of receivables of contractors that have not been financed in the fiscal year 2017 shall be carried out and shall be settled by bonds issued for this purpose.”
However, Iraqi officials have recently disclosed that the total amount of arrears owed to contractors amounted to about 4.7 trillion dinars ($ 3.9 billion) accumulated as a result of the government’s failure to pay a large part of the entitlements of contractors executing government projects in the past years because of the crisis Iraq’s financial crisis caused by low oil prices and high war costs.
Last year officials estimated the amount of arrears at $ 6.4 billion, but the estimates were largely revised after the GAO disclosed that a large number of contractors had filed fraudulent applications or exaggerated estimates.
The improved oil prices have led to a significant increase in Iraq’s revenues to about $ 6.4 billion in March, which is almost double the monthly average in 2016 and is expected to increase revenues to $ 70 billion this year.
Revenue rose sharply last year to about $ 60 billion from less than $ 50 billion in 2016 after the average price of the OPEC basket of crude rose to about $ 50 a barrel in 2017 from $ 39 in 2016.
Iraq produces more than 4 million barrels per day, about 3.5 million barrels per day is exported and plans to increase production capacity to 6.5 million barrels per day and Iraq has the fifth largest Oil reserves After Venezuela, Saudi Arabia, Canada and Iran, more than 140 billion barrels, according to official estimates.

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