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KristiD

FOR BREITLING FOLLWERS

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I remember reading the dinar forums back in 2004 and they used to say Iraq could pull a barrel of oil out of the ground and put on a transport ship for $1/bbl. Years later that number was revised to $3/bbl. Now the break even price is supposed to be $45 or $54/bbl? Not hardly....

 

$45 is the supposed break even price for WTI drillers where they drill 9,000 vertical ft. down to the mighty Wolfcamp formation, then another 9,000 ft. (or whatever length) lateral leg thru the middle of the shale zone, then spend many many millions more on a 35 stage frac....then the expenses continue with drilling out 35 plugs and flowback operations etc... A very expensive process !!

 

Iraq is more like drill down 9,000 ft. and run 9 5/8" casing in the hole and produce right thru that casing...if that cost $45/bbl to get it on the ship it must be caused by more massive corruption....IM opinion.

 

 

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11 minutes ago, dinardiggerisme said:

I remember reading the dinar forums back in 2004 and they used to say Iraq could pull a barrel of oil out of the ground and put on a transport ship for $1/bbl. Years later that number was revised to $3/bbl. Now the break even price is supposed to be $45 or $54/bbl? Not hardly....

 

$45 is the supposed break even price for WTI drillers where they drill 9,000 vertical ft. down to the mighty Wolfcamp formation, then another 9,000 ft. (or whatever length) lateral leg thru the middle of the shale zone, then spend many many millions more on a 35 stage frac....then the expenses continue with drilling out 35 plugs and flowback operations etc... A very expensive process !!

 

Iraq is more like drill down 9,000 ft. and run 9 5/8" casing in the hole and produce right thru that casing...if that cost $45/bbl to get it on the ship it must be caused by more massive corruption....IM opinion.

 

 

That's about the way I remember it dinardiggerisme.:tiphat:

As I recall, the cost to extract a barrel from the ground in Iraq to the ship = less than $10.00 per barrel and the revised 2019 budget for Iraq is calling for/needed $56.00 per barrel, up from the 2018 budget number of $46.00 or so.

 

There is no way Iraq needs to drill 9000'. 

Iraq is like Uncle Jed in the Beverly Hillbillies, scratch the surface and "up from the ground comes the bubbling crude".

 

The US frackers / WTI  need $45.00 or so to break even.

Further more everyone should remember not all crude sells for the same price and the numbers shown on the business news channels reflect the value of the futures contracts. For example  "Bunker Crude" for cargo ships sells for a lot less than "light sweet crude".

 

Lots of smoke and mirrors at this point, hopefully we are at  the end of this roller coaster ride.

Semper Fi :salute:

RV there yet ?:pirateship:

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5 hours ago, KristiD said:

1-5-2019  Newshound Guru Breitling    Iraq can not function…they need $54 per barrel to survive…they’re telling us…in two years it’s going to be $25 per barrel.  That means they’re in the negative.  They need $54 to stay even.  That’s just to make it.  To survive…They are going to be below that by half…it makes me happy cause you and I are sitting on their currency What are they going to do devalue it more No.  They are going to add value and you and I are sitting on it.  You should be happy.  It’s real…that’s the way it works.  No body can get around this math…You have a hundred years of how countries devalued and valued their currencies and Iraq is no different.  They are going to be forced to do it.  Nothing can stop them from doing it.  That’s what’s so neat about what’s coming up.  

Here is the only flaw in Breitling's philosophy. So I understand if the oil price gets too low for Iraq they will have to revalue their currency. However, Breitling never takes into account other countries loaning Iraq money to which they recently have done. It's not a breaking point if there is another way to relieve the pressure. This is why other countries need to demonstrate some tough love for Iraq and stop loaning the college kid money and tell them to get a job ... err revalue.

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Adam mention on January 02/19

 

“We'd all like to think that Iraq can pull off an RV with lower oil prices, but the current market needs to change for Iraq and everyone else to be confident”

 

Breitling mention this on January 05/10

 

  Iraq can not function…they need $54 per barrel to survive…they’re telling us…in two years it’s going to be $25 per barrel.  That means they’re in the negative.  They need $54 to stay even.  That’s just to make it.  To survive…They are going to be below that by half…it makes me happy cause you and I are sitting on their currency.  What are they going to do devalue it more?  No.  They are going to add value and you and I are sitting on it.  You should be happy.  It’s real…that’s the way it works.  No body can get around this math…You have a hundred years of how countries devalued and valued their currencies and Iraq is no different.  They are going to be forced to do it.  Nothing can stop them from doing it.  That’s what’s so neat about what’s coming up.  

 

One is saying NO RV with low oil prices. The other one is saying low oil prices will put pressure to RV

 

Who is right?

 

Go RV with high oil prices

Go RV with low oil prices

Go RV asap

 

 

 

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If oil prices stay low then they are eating their reserves...if reserves get to around 30 billion then they will be forced to revalue in order to save their economy...research it....;)

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As I recall there was a recent series of articles on DV indicating that -  Iraq had sold, via contract, its entire oil production capacity for the year 2019.

That being said, we all know it is almost impossible at this point, in this environment,  to determine and or derive - what is real news vs. fake news ?

If it is in fact true, that the entire 2019 Iraqi oil production is under contract, then this discussion of current oil prices and or fluctuation  in regard the 2019 budget is null, void and a distraction.

On the other side of the coin, as we have again been told, if 2019 budget is based on the $56.00 and thus subject to the oil market price movement, then, as mentioned above,  the Iraqi assets held in reserve will be venerable to make up the budget shortage or Iraq  will continue to take on additional debt.

 

Personally, I cannot make the math work in trying to equate the oil price fluctuation (up or down) thus forcing the RV. But that is just me.

 

Again, a lot of current smoke and mirrors and distracting information being produced. 

 

As we try to determine what is REALLY happening, Iraq continues to pump XXX M ?  barrels per day.

 

Semper Fi:salute:

RV there yet ?:pirateship:

PS to the above - I have always liked the Breitling's perspective.

Edited by Hotcurl
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***///   Good job of it there, HOTCURL:tiphat:Thanks! 

We hear The US is the major oil producer at the moment....

You see any impact on the M.E. market as a result...?

:salute::salute:

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Thank you guys for your input. I always enjoy reading different opinions and point of view.

 

Go RV 

Go $1:1

 

 

 

 

 

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14 hours ago, dinardiggerisme said:

I remember reading the dinar forums back in 2004 and they used to say Iraq could pull a barrel of oil out of the ground and put on a transport ship for $1/bbl. Years later that number was revised to $3/bbl. Now the break even price is supposed to be $45 or $54/bbl? Not hardly....

 Now that you mention it,  remember something like this too.  Also, after listenting to Breitling's recent auddio, I now think that I probably misunderstood him when he he said Iraq needs $55/barrel to breakeven.  I had assumed he meant that was the cost to pull it out of the ground and process it for sale, but now I believe it is their NET cost - what it costs to manufacture a barrel of oil plus the profit/income from selling it that they need to run their country.  Also, I would think with the damaged infrastructure from ISIS (after it was already decimated in 2 gulf wars), it is perhaps more costly for them to produce a barrel of oil these days.  Anyway, Breitling quoted that figure ($55/barrel) from the Wall Street Journal, and for what it's worth Breitling also said that he had figured the number was around $58-59 himself, so I'm thinking there's a pretty good chance that that figure is correct. 

 

8 hours ago, SgtFuryUSCZ said:

We hear The US is the major oil producer at the moment....

You see any impact on the M.E. market as a result...?

Yes I'm sure the increased US oil production has a major impact in the current, low price-per-barrel of oil.

 

9 hours ago, Hotcurl said:

Personally, I cannot make the math work in trying to equate the oil price fluctuation (up or down) thus forcing the RV. But that is just me.

I have trouble with this too.  But apparently when a country changes the value of their currency, it does not directly transfer over to prices.  For example, say a coca cola costs 100 dinar when the value of that dinar is $.001 (tenth of a penny).  Then the dinar is RVd to say $.10.  After the RV, the cost of a coca cola does NOT go to 10,000 dinars - maybe it goes to 1500 or 2000 or something (and I'm pulling these numbers out of the air but apparently there is a significant differental between the increased value and its new purchasing power).  So let's say an Iraqi has 1 million of IQD.  Currently it's not in everyday use so most of the time, to spend it. he has to convert it to USD.  At 1/10 of a penny, that would give him $1000 USD.  But if the IQD is revalued and then is worth say $.10 USD, since it now has value, it will be used in everyday transactions and this Iraqi will no longer have to convert it to USD to spend it.  So if he uses his newly RV'd IQD  to purchase goods, that 1 million IQD may let him buy $15,000 or $20,000 worth of goods.  I honestly don't have any idea what the amount/percentage of that differential is.  But it's somewhere between 0% and 100% and I gather that it's pretty significant.  But the bottom line is that it's that differential that is the motivation for Iraq to RV when they're losing money from their oil production.  Anyway, this is my understanding of how Breitling has explained it.  If anyone one else can explain it better, please do!

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Great explanation.....I was thinking it was referring to "net cost" after posting my reply.

The bottom line is there is huge profit in every barrel sold wether it is $70, $50, or $30/bbl. Supposed no OPEC quota due to oil for food scam of the 1990s? Sell more if needed.

 

I sure hope this is not the same Brietling as the one who calls himself FRACMASTER. That one was indicted and pled guilty to running "working interest" scams on oil well investors in Texas recently.

Naaa, it couldn't be the same one...lol

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Great explanation.....I was thinking it was referring to "net cost" after posting my reply.

The bottom line is there is huge profit in every barrel sold wether it is $70, $50, or $30/bbl. Supposed no OPEC quota due to oil for food scam of the 1990s? Sell more if needed.

 

 

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My likely imperfect understanding here.

 

Likely, the cost of production of a barrel of crude oil on average is around $9/barrel considering all the factors of cost of drilling, the infrastructure, and direct maintenance and operating costs to Freight On Board the Crude Oil Carrier or some pipeline somewhere outside of the Bicraqi Iraqi assets. So, rate of depreciation and end of life salvage values play a role in how the actual cost of producing a barrel of crude oil on average.

 

Ernst & Young and Deloitte And Touche have both been in Iraq a few years ago so I assume the necessary accounting practices were put in place to aid Nationally and Internationally for valuations and International accounting practices.

 

The kicker for the cost of crude oil is the cost of the National Social Programs associated with nearly the sole income of crude oil for the Bicraqi Iraqi. A reasonable assessment could be the Total Yearly Budgeted Costs / Total Yearly National Bicraqi Iraqi Income. For the Bicraqi Iraqi, 90%+ of THEIR National Income is from the sale of Crude Oil. So, subtracting off incomes from other sources, the necessary price of the crude oil (minus the cost of production) per barrel is derived for budgeting purposes.

 

This is a reason why I think the crude oil futures have nose dived since October 1, 2018:

 

image.png.641874249aefd2257a093259fca408a8.png

 

http://quotes.ino.com/charting/index.html?s=NYMEX_CL.G19&t=&a=&w=&v=dmax

 

My opinion is the Bicraqi Iraqi, among OTHER entities, were having THEIR arms twisted to Git 'R Dun to get the show on the road. With the recovering crude oil futures, it looks like things, whatever they are, are back on track.

 

Thankfully, crude oil futures have been rocketing upward with maybe BABY hitting the $56/barrel of crude oil noted in the 2019 Bicraqi Iraqi Budget being some sort of trigger provided other necessary things are in place. One thing could be the seating of the remaining Bicraqi Iraqi Cabinet members. Another could be the activation of the National Oil Company with the associated pay outs of the HCL proceeds. The rest, who knows???!!!

 

Cap'n Adam recently suggested $55/barrel of crude oil being favorable with $60/barrel of crude oil being even MORE favorable. He is VERY likely right or, at least, MUCH MORE Correct!!!

 

For comparison, I am unaware of ANY The United States Of America Nationalization of raw materials for direct income. The vast majority of the income for The United States Of America is derived from Non Nationalized sources. Except, of course, taxation sources of The United States Of America Citizens NOT owned by The United States Of America.

 

Necessarily so, the Bicraqi Iraqi are looking to privatize a WHOLE LOTTA Bicraqi Iraqi Gubmint functions to off load the Bicraqi Iraqi Gubmint costs. So, rocketing the Private Sector is a keen interest in the news for the Bicraqi Iraqi AND Rightly SO. My opinion is a WHOLE LOTTA foreign investment infusion is necessary to jump start the Private Sector. With the local employment requirements, the Bicraqi Iraqi will be employed AND have a TAXABLE income without necessarily, You know, having to WORK in THEIR "jobs". This will offset more of the current Bicraqi Iraqi Gubmint employment costs to the TAXABLE Private Sector where the Bicraqi Iraqi were NOT doing ANY Bicraqi Iraqi Gubmint "Work" Anyway.

 

The activation of the National Oil Company could be a key indicator, too, for the IMPLEMENTATION of the HCL since the Bicraqi Iraqi Gubmint would NOT be paying the HCL proceeds to the Bicraqi Iraqi directly thereby reducing direct costs to running the Bicraqi Iraqi Gubmint.

 

 

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3 hours ago, KristiD said:

 Now that you mention it,  remember something like this too.  Also, after listenting to Breitling's recent auddio, I now think that I probably misunderstood him when he he said Iraq needs $55/barrel to breakeven.  I had assumed he meant that was the cost to pull it out of the ground and process it for sale, but now I believe it is their NET cost - what it costs to manufacture a barrel of oil plus the profit/income from selling it that they need to run their country.  Also, I would think with the damaged infrastructure from ISIS (after it was already decimated in 2 gulf wars), it is perhaps more costly for them to produce a barrel of oil these days.  Anyway, Breitling quoted that figure ($55/barrel) from the Wall Street Journal, and for what it's worth Breitling also said that he had figured the number was around $58-59 himself, so I'm thinking there's a pretty good chance that that figure is correct. 

 

Yes I'm sure the increased US oil production has a major impact in the current, low price-per-barrel of oil.

 

I have trouble with this too.  But apparently when a country changes the value of their currency, it does not directly transfer over to prices.  For example, say a coca cola costs 100 dinar when the value of that dinar is $.001 (tenth of a penny).  Then the dinar is RVd to say $.10.  After the RV, the cost of a coca cola does NOT go to 10,000 dinars - maybe it goes to 1500 or 2000 or something (and I'm pulling these numbers out of the air but apparently there is a significant differental between the increased value and its new purchasing power).  So let's say an Iraqi has 1 million of IQD.  Currently it's not in everyday use so most of the time, to spend it. he has to convert it to USD.  At 1/10 of a penny, that would give him $1000 USD.  But if the IQD is revalued and then is worth say $.10 USD, since it now has value, it will be used in everyday transactions and this Iraqi will no longer have to convert it to USD to spend it.  So if he uses his newly RV'd IQD  to purchase goods, that 1 million IQD may let him buy $15,000 or $20,000 worth of goods.  I honestly don't have any idea what the amount/percentage of that differential is.  But it's somewhere between 0% and 100% and I gather that it's pretty significant.  But the bottom line is that it's that differential that is the motivation for Iraq to RV when they're losing money from their oil production.  Anyway, this is my understanding of how Breitling has explained it.  If anyone one else can explain it better, please do!

 

Great thread.......page 2 kills it........my understanding is Iraqi oil is abundant and shallow.........so extraction is cheap......

 

Transportation more costly.....rose quite a bit the past 2 years because of ISIS.......

 

ISIS stole oil and damaged infrastructure...........so I believe these prices we are reading today are inflated because of this........and they should come down.........

 

JMO.....CL

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This has been an informative and great discussion. Thanks to all that participated.:tiphat:

 

While this thread is still alive and fresh, I have a question related to the $56.00 / barrel budget number ;

 

I have always thought and or believed that all for the OPEC and related oil valuations were quoted under "Brent" or North Sea Brent market.

While the West Texas Intermediate and NYMEX futures markets reflected primarily the North American oil producers / valuation.

In addition, I have never been clear as to the price difference between the two markets (Brent vs WTI / NYMEX) of approx. $10.00.

Thank you in advance,

 

Semper Fi:salute:

RV there yet ? :pirateship:

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I been led to believe anything over $45.00 they were putting lots of money in the bank! JMHO!

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This is just my observation. If the majority of Iraq's economy is done in oil exports (which brings in US dollars) and the price oil drops thus affecting your cash supply. This you would think would force an increase in IQD to open your economy to other sources of income. As long as the price of oil is high, there is no need for them to increase the IQD because they are running on the US dollar.  

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My opinion is Brent and WTI (West Texas Intermediate) are just benchmarks. Refineries are typically limited on the types of crude oil they can process based on how the Refinery was built and/or modified. There are a wide range of characteristics that make crude oil from different sources extremely different. Specific gravity (noted as API) and sulfur content are some more significant characteristics. So, a particular refinery usually has a band on the crude oil characteristics that can be processed in the Refinery that make the Refinery more profitable to run than the bench marks since "discounted crudes" with exceptionally different characteristics than Brent and WTI are processed.

 

There is the market price of the crude oil then there is the cost of production of the crude oil. Brent, if I understand correctly, is more costly to produce since it is offshore. Brent, as a whole, is on the decline in production since the crude oil reserve Brent is taken from is becoming exhausted. Brent and/or WTI may be replaced as bench marks in different parts of the world on different exchanges. If I remember right, a small amount of Bicraqi Iraqi crude oil has been, and maybe is being, sold on the Abu Dhabi exchange and is bench marked against a crude that I forget what the name of it is. So, depending on what a person is looking at and for, the pricing and profitability of processing that particular crude can vary depending on logistics and the refinery configuration compared to a bench mark.

 

Another factor that could play a role is what Refineries do to hedge their losses since it takes a couple months or so to receive crude oil once it is ordered from a source.

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3 hours ago, KristiD said:

 Now that you mention it,  remember something like this too.  Also, after listenting to Breitling's recent auddio, I now think that I probably misunderstood him when he he said Iraq needs $55/barrel to breakeven.  I had assumed he meant that was the cost to pull it out of the ground and process it for sale, but now I believe it is their NET cost - what it costs to manufacture a barrel of oil plus the profit/income from selling it that they need to run their country.  Also, I would think with the damaged infrastructure from ISIS (after it was already decimated in 2 gulf wars), it is perhaps more costly for them to produce a barrel of oil these days.  Anyway, Breitling quoted that figure ($55/barrel) from the Wall Street Journal, and for what it's worth Breitling also said that he had figured the number was around $58-59 himself, so I'm thinking there's a pretty good chance that that figure is correct. 

 

Yes I'm sure the increased US oil production has a major impact in the current, low price-per-barrel of oil.

 

I have trouble with this too.  But apparently when a country changes the value of their currency, it does not directly transfer over to prices.  For example, say a coca cola costs 100 dinar when the value of that dinar is $.001 (tenth of a penny).  Then the dinar is RVd to say $.10.  After the RV, the cost of a coca cola does NOT go to 10,000 dinars - maybe it goes to 1500 or 2000 or something (and I'm pulling these numbers out of the air but apparently there is a significant differental between the increased value and its new purchasing power).  So let's say an Iraqi has 1 million of IQD.  Currently it's not in everyday use so most of the time, to spend it. he has to convert it to USD.  At 1/10 of a penny, that would give him $1000 USD.  But if the IQD is revalued and then is worth say $.10 USD, since it now has value, it will be used in everyday transactions and this Iraqi will no longer have to convert it to USD to spend it.  So if he uses his newly RV'd IQD  to purchase goods, that 1 million IQD may let him buy $15,000 or $20,000 worth of goods.  I honestly don't have any idea what the amount/percentage of that differential is.  But it's somewhere between 0% and 100% and I gather that it's pretty significant.  But the bottom line is that it's that differential that is the motivation for Iraq to RV when they're losing money from their oil production.  Anyway, this is my understanding of how Breitling has explained it.  If anyone one else can explain it better, please do!

You have a USD. To you its worth 1 dollar or 100 pennies. But what if that dollar or those 100 pennies were worth only 90 pennies in Canada? The currency you hold in your hand to be used in the country it originates from is given a stated value. If I took one dollar bill into the local bank in the US, I would get in exchange 100 pennies, not 90 pennies. However, if I took that dollar bill to someplace outside of the USA but inside of Canada and then exchanged it for pennies, I wouldn't get 100 pennies, I would get 90 minus the exchange fees. Now let's postulate the dollar bill I hold in "my formerly nicotine-stained fingers" (so says Rush Limbaugh) is worth 1.16 in Canada, if I exchange that US dollar bill inside of the US it is still worth only 100 pennies. When I go to exchange that dollar bill in Canada, it is worth 116 pennies minus exchange fees. The lesson here is that inside of Iraq, 25,000 dinars today will be 25,000 dinars after the RV. Outside of the borders of Iraq, it is whatever the exchange rate is when it RVs, so it could be 25,000 multiplied by the rate of its worth in US dollars. You may not grasp this concept but in reality, you do. Here's why, because in the US, the Feds have stated it has a predetermined value within the borders of the US and you know this value. It's ingrained into our skulls since we started first learning about money, adding money and subtracting money. You learn in first, second or third grade a dime is ten pennies, two nickels. A nickel is five pennies and a quarter is worth5 nickels, 2 dimes and a nickel or a combination thereof. You have been taught that whenever you ask for the change of a dollar it will always be the same amount in New Mexico to Colorado, to Michigan to Florida. In all 50 states, a dollar will all yield 100 pennies. It is only outside of those 50 states is the dollar worth more or less based on the currency you are exchanging it with. Exchange fees are the cost of doing business with the person who exchanges the currency and for another discussion.

 

So a gallon of milk today is worth 1.00 and tomorrow it is worth 1.25 this has to do with so many variables from the weather when the feed was grown to feed the cows, to the cost of feed, to the transportation of the milk and finally to when it is put on the shelf which pays the store clerk and operating expenses of the store like electricity and whatnot. Sometimes a raise in cost has nothing to do outside of the country but everything do with what happens inside a country. There are laws, rules and regulations on certain products, goods and services that it is illegal to exploit a phenomenon, its called price gouging. Gasoline is one of those products. Let's say a hurricane is about to hit 

Georgia, the east coast. The gasoline price before the hurricane rises gradually because demand rises far above the supply to replace it. Now after the hurricane the cost of gasoline spikes up 5 times. One would assume this would be only natural since there is ar greater demand than there is supply. The government has determined this would be a case of price gouging in which the owner tried to exploit the event for financial gain. Think a bottle of water going for 50 bucks after a hurricane. This has been tried, people paid for the bottle water at that prce, the sellers were caught and went to jail 

Edited by Theseus
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Theseus, it seems to be such an easy concept to grasp but I think a lot of people get hung up on the exchange part. What they can't seem to understand for some reason is that the Iraqis won't be exchanging anything. 

As your example states a Dinar is a Dinar but with a different buying power, to simple....

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Very interesting and informative article.

Sound the alarm “Iraq’s debts”, betting the oil country to creditors.
 
 
 
 
 

%D8%AF%D9%8A%D9%88%D9%86-%D8%A7%D9%84%D8

Shatha Khalil *
Iraq is entering the circle of danger because of the doubling of debts and the rise of them , where the expert and economist , Iraqi professor Dr. Abdul Rahman Najm Mashhadani confirmed the warning of the Deputy President of the International Monetary Fund to the Iraqi government in the “Kuwait Conference for the reconstruction of Iraq” that the policy of borrowing has become dangerous to Iraq and the interests that Iraq must pay it in the year 2022 about (60%) of its revenues, i.e. it will be unable to repay its debts and the payment of the interests on them also, Iraq is moving towards a real disaster that the government does not care about it .
Mashhadani stressed that Iraq during 2014 and 2016 wasted $ 202 billion, which came from $ 36 billion in foreign loans; $ 23 billion from the decrease of reserve in central bank, $ 33 billion comes from the rise of in domestic debt, and (120) Billion dollars of oil revenues.
Mashhadani added that Iraq needs 30 years to repay its internal and external debts, which will put Iraq’s oil resources for many years under the mortgage of banks and creditor countries.
In the same context, specialists stressed what was reported in a recent and important news , confirmed that there are more than (4) million government employees and (3.7) million retirees, plus 2 million Iraqis registered under the so-called social welfare network that they receive monthly salaries to lift them out of poverty.
The Ministry of Planning, according to figures and statistics, sounded the alarm that began to threaten the body of the Iraqi state and the future of development, in a country that its government was forced to borrow for the third year in a row to secure (42) Billion ” dollars annually to cover its operating budget, and experts described the private sector as the savior, in the event that the State has started to support it and urge it to work again in the local market.
Mashhadani criticized the budget of 2019 because it is illogical, and there is an exaggeration of operational figures, surprising the context of the distribution of proportions to the provinces and ministries, and pointed out that he was expected to press the expenses, not to maximize, adding that the budget needs to be significantly modified because the large increase is suicidal, because of the large deficit and borrowing, stressing that in (2022) Iraq will not be able to repay its external debt only by paying (60%) of its imports !!
Economists and experts said that the proposed draft bill (2019) , shows any follower that Iraq is steeped in its debts and the interests of previous debts, which may amount to the extent that Iraq would lose more than (15%) of its budget to pay these debts, if oil prices did not increase , It would be possible that these debts and their payments would amount to 70 percent of Iraq’s annual budget.
A member of the Iraqi Finance Committee in the Iraqi parliament Rahim Darraji, said that since 2003 and to date, Iraq resulted in many debts due to the wrong policies of successive governments, and that the governments that took power has no wisdom in managing the financial and monetary policy of the country, and the budgets of Iraq’s previous budgets were exaggerated and lack of good management and not based on study and planning, but on the basis of so-called fill-in spaces, that future generations will bear the current debt burden.
A member of the economic committee in the Iraqi parliament, Nora al-Bajari, said that the debts that have burdened the Iraqi economy caused by rampant corruption in the country, and the fight against the terrorist organization ISIS, in addition to the seizure of officials and parties affiliated to take over projects in the deals of corruption.

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The total amount of these benefits and repayments to Iraq about 12423.5 billion Iraqi dinars, equivalent to about 12770 billion dollars.
When borrowing is positive?
State borrowing can be useful and positive in many situations, most notably:
• States should have plans and objectives for borrowing, with their causes, dimensions and sources, and not for patchwork.
• The borrowing should not be based on sovereign guarantees in a way that guarantees the unity of the country and non-interference in its affairs.
• The borrowing should be for urgent necessities such as wars or investment to maximize returns.
• The State should have the proven capacity to serve the debts and repay the debts within their deadlines without renewal.
• The lending state should be easy and can give some permissiveness such as reprogramming loans.
• Not to borrow with greedy countries or to have hostile objectives or to save grudges with borrowers.
• Prior intentions must be made to restore the loan schedule or to extinguish it or settle it amicably without acquiescence.
• Borrowing is a unanimous collective decision and not based on an individual opinion and involves corruption.
• There is a real will to pay loans on time and not to beg to postpone them year after year.

Iraqi Finance Committee:
The Parliamentary Finance Committee has not classified foreign loans that its value is more than $ 70 billion, some of which are bad debts that were considered debt despite being subsidized during the first Gulf War. Some of them can also can be settled at the Paris Club for Debt. Other debts can be negotiated to extinguish them or convert them into investments or any formula agreed upon, as part of their political and military goalsand as done with a political system that has ended and can not pay any dollar. According to data provided by Iraq in 2012, Iraq ranked (60) between countries in terms of indebtedness, which is a good rank if there have been serious policies to address the debt, but the reality is not telling good news l, as external loans and internal indebtedness multiply year after year, noting that in the draft federal budget for the year 2018, it was planned to address the budget deficit of (12) trillion dinars, by authorizing the Ministry of Finance to find External sources of borrowing, as well as the inclusion of expenditure paragraphs to be financed through loans previously agreed, leaving the door open to borrow from the Central Bank by treasury bills, bonds, credit and other available means.
This means that loans are generated annually in the hope of rising oil prices, a possibility that is difficult to achieve , if not impossible, because alternatives to oil are possible and can prevent any crises to supply black gold (oil), after there are more possibilities for export, and to limit the crisis of hgh prices , a the most serious issue is that the IMF has long hands in Iraq and can influence the government to make decisions that do not take into account the interests of the poor, which are increasing annually. The measures for economic reform and increasing national income need an administration and will that are not currently available, There is a real need for (200) billion dollars, in order to put things back to normal, which requires attention before it is too late.

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Just wanted to update this with information from Breitling's audio from last week.  Someone asked him if, since it makes sense for Iraq to increase the value of their currency because oil prices will continue to go down, then why wouldn't they do that now and take advantage of the current oil prices before they go even lower.  Breitling replied that he agreed with this and that he thought Iraq should have done this in November.  Breitling never gives a date or rate, but to me that fact that he thinks Iraq could have/should have RVed already is a really good sign.

 

He confirmed his belief that oil prices will continue to fall because the US is cointinuing to ramp up its oil production.  They opened up Anwar in Alaska, found new oil in West Texas last fall, and last year some new oil extraction technology was developed that allows them to extract from several layers of shale at the same time thereby reducing the cost.  So all these things will push the price of oil down even lower so we don't need to be concerned about the curent bump up in price.  Also, he said we should be looking at the Brent price of oil (and not WTI which I had been using).  fyi, Brent oil is at $61 as I write this.

 

He also said that Iraq could easily RV at $.10 since without even blinking.  Adam has always said $.10 too, though of course we're all hoping for higher.  But Breitling did say if it comes in low, it would likely go up in significant increments (like $.10 and $.20 increments).  

 

While I respect Breitling and trust that he's a good man sincerely trying to help people, I realize that he won't always be right.  But he does try to look at all angles and form the most logical opinion he can considering all the information he has obtained.  So, I see the latest things he shared as very encouraging.  

 

 

 

 

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For people who agree with Breitling's position that lower oil prices will put pressure on Iraq to RV soon, this is good news.  A large oil field has been discovered off the coast of South Africa.  More oil producers will mean lower prices and this should make Iraq nervous about the future.  Go RV!!   https://oilprice.com/Energy/Crude-Oil/South-Africa-Oil-Discovery-Could-Be-A-Game-Changer.html

 

South Africa Oil Discovery Could Be A Game-Changer

By Tsvetana Paraskova - Feb 10, 2019, 10:00 AM CST

Exploration

One of the promising hotspots for oil and gas exploration drilling this year—South Africa’s offshore—has just yielded a massive natural gas and condensate find that could open a new exploration province for oil majors and change the energy fortunes of South Africa.

France’s major Total said this week that it had made a significant discovery on the Brulpadda prospects off the southern coast of South Africa.

“With this discovery, Total has opened a new world-class gas and oil play and is well positioned to test several follow-on prospects on the same block,” said Kevin McLachlan, Senior Vice President Exploration at Total.

According to Total’s chief executive Patrick Pouyanne, the discovery could hold 1 billion barrels of oil equivalent of gas and condensate resources.....

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And more good news for those of use who believe lower oil prices will put pressure on Iraq to RV.  OPEC looks like it's in trouble, the US may soon pass legislation making OPEC members subject to antitrust regulation (about time I say).  This will undoubted lead to lower oil prices. https://oilprice.com/Energy/Energy-General/Washington-Eyes-Crackdown-On-OPEC.html

 

Washington Eyes Crackdown On OPEC 

Legislation targeting OPEC is suddenly gaining steam in the U.S. Congress, raising alarm bells for the cartel.

 

On Thursday, the House Judiciary Committee passed a bill that would allow the U.S. Justice Department to sue members of OPEC for manipulating the oil market. The so-called “NOPEC” bill would remove sovereign immunity, exposing member countries to antitrust regulation.

 

The bill has appeared in the past under prior administrations. But previous presidents from both political parties have opposed taking punitive action, fearing damage to the U.S.-Saudi relationship.

 

Times have changed. President Trump has repeatedly posted angry tweets about OPEC, blaming it for high gasoline prices. That led to a revived push for the NOPEC legislation. The murder of Saudi journalist Jamal Khashoggi may have also been a turning point, erasing a lot of goodwill for Saudi Arabia in Washington.

In theory, OPEC members could face confiscation of their assets in the United States. Saudi Aramco, for instance, controls Motiva Enterprises, which owns the largest oil refinery in the country in Port Arthur, Texas.

 

According to the Financial Times, the prospect of the NOPEC bill becoming law has raised alarm bells not just for OPEC, but also for international oil companies who fear reprisals abroad. Companies like ExxonMobil and BP have major stakes in projects in places like Nigeria and Iraq. These OPEC-member countries could retaliate if they face punitive action from the U.S. government. The FT reports that the oil majors, along with the American Petroleum Institute and the U.S. Chamber of Commerce, are lobbying against the NOPEC legislation.

 

Analysts speculate that Qatar exited OPEC in 2018 not just because of its rivalry with Saudi Arabia, but also because it has major interests in the U.S., and does not want to face antitrust action. Qatar Petroleum, along with ExxonMobil, just gave the final investment decision for the $10 billion Golden Pass LNG project in Texas

 

.Related: Chevron Looks To Double Permian Production By 2022

 

So, what are the odds of passage for the NOPEC bill? Joe McMonigle, senior energy policy analyst at Hedgeye, told Reuters that low oil prices have removed some of the urgency. “I don’t see any kind of groundswell for it,” McMonigle said.

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However, the takeover of the U.S. House of Representatives by the Democrats gave momentum to the bill. One of the first acts of the new House Judiciary panel was to take up the legislation, which it quickly approved on February 7. A full House vote is now possible.

In fact, there is suddenly quite a bit of bipartisan support for the bill, making it closer to becoming law than at any point in history. Senator Chuck Grassley, a Republican, has proposed a companion bill in the Senate. “The oil cartel and its member countries need to know that we are committed to stopping their anti-competitive behaviour,” Grassley said. Across the aisle, Sen. Amy Klobuchar of Minnesota, also representing a state with significant ethanol interests, came out in support of the bill.

 

“Given President Trump’s known hostile stance towards OPEC it now looks like a very good chance that the bill will be voted through,” Bjarne Schieldrop, chief commodities analyst at SEB, said in a statement. “The prospect of a passage of NOPEC legislation has added bearish pressure to Brent crude.”

 

It is still too early to say with any certainty, but if the NOPEC legislation were to become law, it could theoretically make it much more difficult for OPEC to set production limits with the aim of achieving certain price targets. It could also put in jeopardy the formalization of the OPEC/non-OPEC alliance with Russia, the so-called OPEC+ arrangement. OPEC and the non-OPEC group led by Moscow are currently negotiating such an entity.

 

Related: The Next Big Threat For Oil Comes From China

 

Still, countries could individually raise and lower production. Or, more specifically, Saudi Arabia – the only country that can make massive changes to production levels – could still tailor output to meet strategic goals. But it wouldn’t be able to call upon other countries to chip in. “The NOPEC legislation could end tactical, cooperative production cuts and increases orchestrated by OPEC,” Schieldrop said. “It will probably not hinder Saudi Arabia to move production up and down on its own in order to address tactical turns and imbalances in the global oil market.”

 

Othes see a more significant impact. “We are just a tweet away from Nopec becoming law,” Bob McNally of the Rapidan Energy Group told the FT. McNally said the legislation could lead to more volatility and lower prices if OPEC was unable to restrain supply. “After a good dose of Nopec, if it was successful, we would end up begging them to reunite, get back into business and start controlling supply,” he added.

 

Maybe. But outside of oil companies themselves, there isn’t a massive constituency in the U.S. for OPEC. The cartel is not exactly popular in the United States. Moreover, if the NOPEC legislation became law and pushed down oil prices, Trump could claim credit and millions of American motorists would probably be thankful. It seems unlikely that there would be a political price to pay in the U.S. for lower oil prices and a crackdown on OPEC, even if American oil companies faced reprisals. Nobody is going to shed a tear for ExxonMobil if the company suddenly runs into trouble in Iraq or Nigeria because of the NOPEC law.

 

 

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