Iraqi Oil Minister Adel Abdul-Mahdi said on Sunday that his country owes more than $20 billion to the oil companies operating in the south, news agencies report. He told journalists at a press conference that in 2014 Iraq paid what was owed for 2013 and delayed other payments. “On top of that, there’s what we owe for 2015,” he said.
Besides a budget allocation of close to $12 billion to pay what is due, Mahdi said that he planned to ask the government to issue the same amount in treasury bonds. “Fulfilling those commitments is important to our relationship with these companies and the future of the country’s oil industry.”
Iraq’s 2015 budget is based on an average oil price of $56 a barrel. “There will be sanctions if we do not pay these sums,” said the minister. “The companies will reduce their production.”
He said that he expects the price of crude oil, which dropped to a six-year low in January, to continue to recover. “I do not think they [the prices] will return to their former levels immediately… We expect them to rise more, probably to $64 or $65 per barrel.”
Brent North Sea crude, the global benchmark, tumbled to $45 per barrel at the beginning of the year, less than half the level reached six months earlier. It surged to $62 on Friday
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