Iraq fully cancels pre-paid oil deal with China's Zhenhua, sells crude to other customers

[yota691]

Here your article PP...

 

 

China prepared to bail out cash-tight Iraq with multibillion oil deal

If the deal goes through, Iraq will repay China in oil, not cash.

Matthias Ang |  December 10, 2020, 08:44 PM

 

 10 December 2020 - 22 December 2020

 103 Defu Lane 10, Level 1, FNA Group Building S (539223)

 

 

China is prepared to bail out Iraq by having the Middle Eastern country sign a multibillion deal with Chinese state-owned company ZhenHua Oil, Bloomberg reported.

Under the deal, Iraq's government will receive cash upfront in exchange for providing long-term oil supplies.

 

 

Gulf News further reported that the Iraqi agency overseeing petroleum exports, SOMO, had selected ZhenHua Oil after requesting for bids by oil traders.

 

A final decision has yet to be made by Iraq's Prime Minister Mustafa Al-Kadhimi, however, as "several offers" are being studied, a spokesperson for Iraq's Cabinet stated.

 

Should deal go through, China will buy 4 million barrels per month from Iraq

 

According to SOMO, should the deal go through, it will entail:

 

• ZhenHua Oil buying 4 million barrels per month from Iraq, or 130,000 barrels per day,
• A one year upfront payment of over US$2 billion (S$2.6 billion), and
• The deal itself running for a period of five years.

Iraq's economy is struggling

 

The deal will provide a crucial lifeline to help the country stay afloat.

Iraq, which has the world's fifth-largest oil reserves, has been been particularly hard-hit by a crash in oil prices triggered by Covid-19, given that crude oil accounts for almost all of the government's revenue.

Its economy has since been estimated to contract by 12 per cent, according to the International Monetary Fund.

Bloomberg further reported that Iraq's government suffers from a monthly shortage of US$3.5 billion (S$4.7 billion) to pay for salaries, pensions, debts and imports.

As such, the government has failed to pay teachers and civil servants on time.

In November, the government approved a funding deficit law, thereby enabling them to borrow up to 12 trillion Iraqi dinars (S$13 billion) to pay the salaries of state employees, which were delayed by nearly two months at that time, Al-Monitor reported.

The government is also mulling introducing a value-added tax of 12 per cent to help raise revenue. However this has raised concerns that the tax would further burden the poor, with companies raising the prices of goods, and that the taxes would be used to finance the parties and militias running the country instead.

[screwball]

Oil for cash who would have thought! 

[yota691]

{Selling oil by prepayment} .. A decision that faces opposition in Parliament

Monday 14th December 2020 66

 

 Baghdad: Hoda Al-Azzawi 

 

The decision to “sell oil with prepayment” announced by the “SOMO” company affiliated with the Ministry of Oil, “was rejected by the parliament, as the Parliamentary Oil and Energy Committee said that this decision violates the constitution and bears great burdens for future governments.

While the company believes that this trend comes to support the financial resources of the Iraqi state’s treasury during the current period by diversifying and expediting the collection of financial revenues from selling Iraqi crude oil to global markets.

A member of the Parliamentary Committee, Sadiq Al-Sulaiti, told Al-Sabah: “Selling oil by pre-payment method is against the law, as oil wealth cannot be wasted in this way, and the current government is for conducting business and has no right to enter into contracts for future years and receive sums that may implicate future governments. With unresolved problems ».

He added that "the country is going through a difficult financial and economic crisis due to the Corona pandemic and the reduction of Iraqi oil exports by nearly one million barrels per day caused a decrease in revenues," explaining that "all oil-exporting countries have reduced the quantities exported by about 23 percent. 

He pointed out that "countries have taken methods to adapt themselves by reducing expenditures and increasing revenues, but unfortunately the Iraqi government is unable to find effective solutions, so it has gone to sell oil and receive the money in advance." 

Al-Sulaiti said, "This decision is dangerous, as it is considered a disposal of the wealth of the Iraqis in accordance with Article 111 and 112 of the Constitution, as it is not permissible to sell oil and receive money before exporting because this will constitute financial and economic burdens and carry out the crises, just as money cannot be received at the low prices at the present time." .

The company, "Sumo", had confirmed in a statement, "This decision comes as a continuation of the measures of the Ministry of Oil represented by the Oil Marketing Company to support the financial resources of the Iraqi state treasury during the current period and for the purpose of diversifying and accelerating the collection of financial revenues from the sale of Iraqi crude oil to global markets in a way that achieves the interest Country supreme ».

[horsesoldier]

A China Bailout . . . comes as no surprise. Expected this for quite some time. Iraq doesn't know it ( perhaps they do/Their greed is their downfall ) . . . China OWNS Iraq now; it's been China's plan all along. 

[Shelley]

52 minutes ago, horsesoldier said:

A China Bailout . . . comes as no surprise. Expected this for quite some time. Iraq doesn't know it ( perhaps they do/Their greed is their downfall ) . . . China OWNS Iraq now; it's been China's plan all along. 

China’s goal is world domination !!!

The Biden’s will help them anyway they can , they think they’ll be sitting pretty, not even knowing once China gets what they want , they’ll be done with them also ... who knows maybe the CCP will let loose another Virus !

[rvmydinar]

3 hours ago, horsesoldier said:

 China OWNS Iraq now

china isn"t only owning iraq, but also owning billions and billions and billions of iqd. do you all think iraq will give the authority to china to push the rv button and determine the exchange rate since china is owning iraq? and then, will the iqd peg to china"s currency? 1 us= 6.5467 rmb and then,  1 rmb ( china currency )=0.1527 us. actually, according to adam"s prediction, 1 iqd=0.10 us. and 1 rmb=0.1527 , so the rate is just a little bit higher.

anyway, since most still prefer 1:1, so forget about iraq peg to china currency.

[yota691]

Representative Energy: Selling oil on credit is against the constitution and bears heavy burdens for future governments

 

energy Economy News _ Baghdad On Monday, the Parliamentary Oil and Energy Committee promised to sell oil in advance a decision that violates the constitution and bears heavy burdens for future governments. Committee member Sadiq Al-Sulaiti said in a press interview, "Selling oil by prepayment is against the law, as oil wealth cannot be wasted in this way, and the current government is for the conduct of business and it has no right to enter into contracts for years to come and receive sums that may implicate future governments with problems. Solve her. "   He added that "the country is going through a difficult financial and economic crisis due to the Corona pandemic and the reduction of Iraqi oil exports by approximately one million barrels per day has caused a decrease in revenues," explaining that "all the oil-exporting countries have reduced the quantities exported by about 23 percent."   He pointed out that "countries have taken measures to adapt themselves by reducing expenditures and increasing revenues, but unfortunately the Iraqi government is unable to find effective solutions, so it has turned to selling oil."   Al-Sulaiti believed that “this decision is dangerous, as it is considered and received in advance the disposal of the wealth of the Iraqis in accordance with Articles 111 and 112 of the Constitution, as it is not permissible to sell oil and receive the money before export because this will constitute a financial and economic burden and carry out crises, just as money cannot be received at low prices. in this time".

Number of observations 105   Date of addendum 12/14/2020

[screwball]

17 hours ago, rvmydinar said:

china isn"t only owning iraq, but also owning billions and billions and billions of iqd. do you all think iraq will give the authority to china to push the rv button and determine the exchange rate since china is owning iraq? and then, will the iqd peg to china"s currency? 1 us= 6.5467 rmb and then,  1 rmb ( china currency )=0.1527 us. actually, according to adam"s prediction, 1 iqd=0.10 us. and 1 rmb=0.1527 , so the rate is just a little bit higher.

anyway, since most still prefer 1:1, so forget about iraq peg to china currency.

china has nothing to do with the rate....and i am quite sure they will secure oil deals because they are one of the biggest consumers...but TRUMPS rules. 

[screwball]

IQd will peg to the USD in the short term....or a basket of currencies in a managed float.

Edited December 15, 2020 by screwball

[yota691]

Advisor Al-Kazemi announces the details of the pre-payment sale of oil to support the budget

 

 

- 12-16-2020 08:46 AM - Number of readings: 9697

 

The financial advisor to the Prime Minister, Mazhar Muhammad Salih, announced today, Wednesday, the details of the agreement to be signed between Baghdad and Beijing to sell 48 million barrels by pre-payment method, explaining that it aims to support the budget, which is a type of borrowing in exchange for oil.

In an interview with the official Al-Sabah newspaper, Saleh said, "The agreement to be signed by the Ministry of Oil and Chinese governmental oil companies includes the Finance Ministry receiving 48 million barrels immediately for the sale of oil that is delivered 6 months after receiving the sums, with exported quantities of 4 million barrels per month. 12-month period.

He added, "The price of oil sold to the foreign company is determined one month after the signing of the agreement, and the average price of oil in that month is taken as a standard for the purchase price of quantities. The amounts are delivered to the Ministry of Finance on this basis in cash, that is, six months before export."

The financial advisor explained, "After determining the selling price at the average oil price in the month following the signature, the sums are received in cash, and the foreign company receives quantities of crude oil regardless of the value."

And Saleh indicated that "the agreement is a kind of borrowing in exchange for oil, and this type is called pre-financing to export oil in order to support the liquidity of the general budget," noting that "the Ministry of Oil is studying offers made by participants in a pre-paid oil deal."

He pointed out that "the aforementioned loan comes within the framework of the borrowing law that was voted on in recent months, which granted the executive authority the power to obtain external loans to help support the implementation of strategic investment projects."

[rvmydinar]

On 12/13/2020 at 2:59 AM, screwball said:

Oil for cash

Back up. change the deal. Oil for cash is a very bad deal. Actually, It is wrong really really wrong. It should be " rv worldwide at least 1:1 for cash ". This is more like it and everyone will love it.

[rvmydinar]

On 12/15/2020 at 8:01 AM, screwball said:

china has nothing to do with the rate

I am just glad you said that because the china's currency is pretty low=0.1527us and rate at least 1:1 is more like it.

[screwball]

6 hours ago, rvmydinar said:

I am just glad you said that because the china's currency is pretty low=0.1527us and rate at least 1:1 is more like it.

what they are guilty of is manipulating the USD!!!!

[yota691]

Disclosure of the contents of an expected agreement between Iraq and China

Economie

2020-12-16 | 1:38

 

 

9,669 Views

 

The financial advisor to the Prime Minister, Mazhar Muhammad Salih, revealed, on Wednesday, the content of an agreement to be signed between Baghdad and Beijing to sell 48 million barrels by prepayment.

In an interview with the official Al-Sabah newspaper, Saleh said, "The agreement you will sign Oil Ministry And Chinese state oil companies include delivery Ministry of Finance The value of 48 million barrels immediately for the sale of oil that is delivered after 6 months of receipt of the sums, with exported quantities of 4 million barrels per month over a period of 12 months.

 

He pointed out that "the price of oil sold to the foreign company is set a month after signing the agreement, and the average price of oil in that month is taken as a standard for the price of purchasing quantities, and the amounts are delivered to Ministry of Finance On this basis, in cash , that is, six months before the export. ”

He added,“ After determining the selling price at the average oil price in the month following the signature, the sums are received in cash and the foreign company receives quantities of crude oil regardless of the value, ”indicating that“ the agreement is a kind of borrowing In exchange for oil, this type is called pre-financing for oil exports in order to support the liquidity of the general budget.

He continued, "Oil Ministry Examines the offers submitted by participants in a prepaid oil deal, explaining that "the aforementioned loan comes within the framework of the borrowing law that was voted on in recent months, which granted the executive authority the power to obtain external loans to help support the implementation of strategic and important investment projects."

[SocalDinar]

A Quantum Leap Forward: Chinese Influence Grows in Iraq’s Oil Market

A Chinese company is nearing a multibillion-dollar deal with Iraq’s state-run oil marketing company.

By Sophie Zinser

December 23, 2020

 

 

Chinese ZhenHua Oil Company is finalizing a rare multibillion-dollar deal with Iraq’s state-run oil marketing company (SOMO), in which ZhenHua would agree to a monthly purchase of 4 million oil barrels over five years. ZhenHua plans to pay SOMO $2 billion up front, enough to significantly boost Iraq’s depressed and crude-oil reliant economy. The deal is still being debated in the Iraqi parliament, and newly appointed Iraqi Prime Minister Mustafa al-Kadhimi will have the final approval. But regardless of whether or not ZhenHua gets the deal, all the other major contenders are state-owned Chinese companies, as all have the liquid cash on-hand that the deal’s terms require. A multibillion dollar agreement at such a low point in Iraq’s economy would mark a quantum leap forward for Sino-Iraqi relations.

The COVID-19 pandemic and March’s subsequent oil price crash has led to Iraq’s economy contracting by 12 percent — more than any other OPEC country — this year. In Iraq, crude oil exports account for most of the government’s annual income. And despite China’s checkered attempts at “greening” its Belt and Road Initiative — including touting an ambitious carbon-neutral 2060 plan while bankrolling much of the developing world’s coal production — China still remains the largest crude oil importer globally, importing $238.7 billion, or 22.6 percent of overall crude oil imports as of 2019. Elected after months of political instability, Prime Minister Mustafa al-Kadhimi optimistically frames China as a robust partner for economic growth in Iraq, reaffirming the nation’s prominent role in the Middle East’s oil markets.

This is not the first time that ZhenHua and SOMO have embarked on large-scale collaboration. In 2018, Iraq aimed to supply China with more crude oil in another deal that nearly passed but was struck down at the eleventh hour. But on December 17, the Iraqi Cabinet agreed to renew a contract with ZhenHua, drilling three new directional oil wells in the oil field of East Baghdad, located about 10 kilometers to the east of Baghdad city. The field has approximately 8 billion barrels worth of oil. If the multi-billion dollar deal is approved, this recent contract could serve the first step towards ZhenHua’s investments’ broader impact on Iraq’s economy. 

Meaning “Revitalize China” in Chinese, ZhenHua oil operates a total of 11 oil exploration and production projects in six countries and is deeply involved in implementing the CCP’s “Going Global” energy security strategy. The company already works with several countries in the Middle East, and notably has acquired a 4 percent stake in Abu Dhabi National Oil Company’s (ADNOC)’s onshore concession. 

DIPLOMAT BRIEF

 

Get briefed on the story of the week, and developing stories to watch across the Asia-Pacific.

Originally set up in 2003 as a subsidiary of Chinese defense contractor Norinco, ZhenHua Oil is 100 percent indirectly owned by the Assets Supervision and Administration Commission of the State Council (SASAC). The SASAC manages hundreds of state-owned enterprises (SOEs), brings in over $3.6 trillion in revenue annually, and appoints all high-level executives across each SOE. If Iraq signs on with ZhenHua — or any of the other SOEs vying for the bid — cash loans will be liquidated as Chinese government funding, putting the governments directly in contact. 

 

Bailing out a strained economy via SOE oil-backed loans is not a first for the CCP. In Angola and Venezuela, for example, loans from Chinese banks have looked like a good idea during the heydays of high oil prices. But global oil price declines have recently trapped both countries deeply in debt to China. Each now owes China over $20 billion. But analysts cite ZhenHua’s prospective deals with Iraq as more narrowly focused in their terms when compared to those of Angola or Venezuela, and only involve specific Iraqi commercial banks rather than federal funds.

But what of the loan’s promise to boost Iraq’s economy? With reconstruction needs estimated at around $88 billion, a loan from China has great potential to boost Iraq’s liquid capital. But with such a major loan up front and a checkered history of government corruption, the deal will likely end up merely as a salary bonus for those working in Iraq’s inflated public sector, with little to show across Iraq’s economy as a whole. Wages for Iraq’s government employees increased nine times from 2003 to 2018, while Iraqi public servants are estimated to work for an average of just 17 minutes during an eight-hour day. The 2020 postponement in passing of Iraq’s annual federal budget further stalled a measure for even more spending on federal salaries, set to reach nearly $45 billion. With most of Iraq’s government income from oil and spending on public sector salaries, it’s more likely that China will fuel further corruption in this sector.

And just as a large loan may trap Iraq’s government in debt, ZhenHua fears losing its cash should the security situation deteriorate within the country. A source told trade publication Energy Intelligence last week that: “Zhenhua is very worried that it won’t be able to take the oil and will lose all the advance payment if Iraq encounters output cuts or war or something else. Zhenhua has no solutions to avoid the risk if Iraq takes the money and doesn’t pay back the oil.” Chinese investments in Iraq go beyond oil, including cement factories, power plants, and water treatment facilities. It seems a risky bet for China to deepen its fiscal ties with Iraq during this period of economic turbulence if they have no stopgaps in place ensuring that their loans will actually be paid back.

 

 

While the new Biden administration in Washington may bring with it a new wave in Middle East policy later next month, the United States is unlikely to reverse a Trump-era retreat from its previous military and diplomatic presence in the nation. There are also rumors that another Chinese state-owned oil company — China National Petroleum Corporation — might attempt to buy out American MNC Exxon Mobil’s stake in the West Qurna-1 Oil field, further deepening ties between China and Iraq.

Enhanced reliance on China has been on the table for Iraq since before current Prime Minister Mustafa al-Kadhimi’s term. Bullish on China’s power to support Iraq’s economy, Former Prime Minister Adel Abdul-Mahdi led a September 2019 delegation to Beijing wherein Iraq signed a series of Memoranda of Understanding (MOUs) to officially join China’s Belt and Road Initiative. Abdul-Mahdi famously referred to the visit as a “Quantum Leap” in Iraq-China Relations. As Iraq’s number one trading partner and the agent of its latest oil bailout, China could end up triggering a quantum leap forward for Iraq’s floundering economy; on the off chance that Iraq can quell the corruption rampant at its highest ranks.

Sophie Zinser is a researcher focusing on China’s role in the Middle East, South and Central Asia. A former Schwarzman and Fulbright Scholar, Sophie has worked with refugees and migrants on developing community-focused policy solutions for five years across the Middle East and Asia  https://thediplomat.com/2020/12/a-quantum-leap-forward-chinese-influence-grows-in-iraqs-oil-market/

[horsesoldier]

China and its quest for global domination-they’re doing a great job by the way. Rosetta Stone’s sale of its Mandarin language course should be going through the roof “ in the near future “

[yota691]

Official in the Cabinet: We pump daily sums to the Chinese Agreement Fund and he talks about the amount of "visiting dollars" for the provinces of Karbala and Najaf

• MONDAY, 28-12-2020, PM 12:13
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• KARRAR AL-ASADI
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• 326

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http://non14.net/public/images/large/8-1609149309.jpg

An official source in the Cabinet revealed, on Monday, the Chinese agreement concluded between Iraq and China, explaining that the project is still active by pumping daily amounts to it, indicating that the agreement will include various sectors affecting the lives of Iraqis.

The source said in an interview with Noon news agency, "The Chinese agreement is the establishment of a fund in which sums of money that amounted to 100 thousand barrels of oil are placed per day, and that this fund is used in some infrastructure and services projects."

The source, who asked not to be named, added, "The draft of the Chinese agreement is activated in Iraq, and the money is pumped to it daily, as the project will include building schools and the new Nasiriyah airport that entered into the agreement, in addition to the presence of work within the General Secretariat of the Council of Ministers, on a project Development of Sadr City in Baghdad. "

And he continued, "Iraq needs about 3 million housing units in order to solve the housing problem in the country, and this project will solve some of this problem."

The source revealed, "The Reconstruction and Government Services Committee is trying to activate the agreement (the visitor is a dollar) for the governorates of Karbala and Najaf, under the title (visit fee), which is one dollar for every visitor entering the two holy cities, and that this amount will be used in the development of the two cities and their services."

The responsible source described, "Karbala Governorate is an oppressed province in terms of financial allocations regarding the development of the regions, given that the sums of developing regions are spent according to the population census, and that this governorate did not include population expansion, so its population remained according to the last official population census that took place decades ago." And that the city receives tens of millions of visitors annually, and it provides untold free services to the visitors. "

[yota691]

SOMO announces an agreement to export oil with pre-payment

• SAT, 02-01-2021, PM 6:45
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• KARRAR AL-ASADI
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• 256

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The director of the National Oil Marketing Company SOMO, Alaa Al-Yasiri, announced today, Saturday, that an agreement has been reached to export oil by payment in advance.

The official news agency quoted Al-Yasiri as saying that "SOMO is an intermediary company, not the owner of oil," noting that "SOMO is the only company authorized to export and import petroleum products and crude oil in excess of need."

He stressed that "Iraq is the second largest source of crude oil in OPEC, and that the OPEC agreement positively affected Iraq."

He pointed out by saying, "We have specialized bodies that conduct a technical study on the target markets and expected revenues," noting that "Iraq was able to contract with the largest government companies in the Indian, Chinese and Korean markets."

He cautioned that "Iraq got two billion dollars at zero interest with a premium over the price due to the prior sale," adding that "a Chinese company won the pre-sale contract for oil."

He continued, "Most of the contracts indicate that the region's oil is sold at a price less than 6 to 9 dollars than what is sold through SOMO," indicating that "the quantities of oil exported from the region through the Turkish port of Ceyhan amount to 430 thousand barrels per day."

He warned that "SOMO has the ability to absorb quantities of the region's oil for the purpose of export," saying that "the 2021 draft budget obliges the regional government to deliver 250 thousand barrels."

He said, "The oil marketing company does not have differential prices, but rather fixed prices according to the market."

[yota691]

Iraq confirms $2bn oil prepayment agreement with Chinese firm

 

The Chinese firm will pay for a full year's worth of crude prior to loading shipments

 

/image/policy:1.1139590:1609669893/Iraq.jpg?f=16x9&w=1200&$p$f$w=1676c6a

Oil tankers load crude oil at Iraq's Al-Basra Offshore Terminal. The Chinese firm will pay for a full year's worth of crude before loading shipments. AP 

Iraq signed a $2 billion agreement on Sunday with a Chinese buyer who has agreed to prepay for crude exports as the cash-strapped producer looks for ways to raise funds.

Alaa Al Yasiri, general manager of the State Organisation for Marketing of Oil, said a mechanism "that does not affect Iraq" has been set up, providing greater flexibility over the marketing of its crude.

"Several offers have been made by the companies and there was intense competition between two European and Chinese companies, and the Chinese company won," Mr Al Yasiri told the Iraq News Agency.

 

He did not disclose the name of the company but said that the Iraqi state will receive "$2bn at zero interest" through the sale. Media reports last month said Iraq had entered into a supply agreement with ZhenHua Oil, a subsidiary of China's largest state-owned defence contractor.

Under the agreement, the Chinese firm will pay for a full year's worth of crude before loading shipments. Usually, payments are made 30 days after crude exports are loaded.

 

"The flexibility that Iraq has granted to companies is the freedom to determine the day of loading the shipments, the export destination, the possibility of resale and a set of marketing benefits in return," Mr Al Yasiri said.

His comments come as Iraq navigates a debilitating economic crisis compounded by falling oil prices in 2020 caused by the Covid-19 pandemic, as well as an ongoing health crisis.

Baghdad last month devalued its currency by around 23 per cent against the US dollar, the first adjustment in the currency peg since 2015.

Under the country’s provisional budget, an allocation of 150 trillion dinars ($103bn) was earmarked for spending, against expected revenue of 92tn dinars, leaving the government with a gaping deficit.

Opec’s second-largest producer depends on oil revenue to meet 90 per cent of government expenditure, including $5bn spent on monthly salaries for public servants.

Iraq's sovereign debt is rated as B- by Fitch Ratings, six notches below investment grade. The country has almost exhausted its borrowing options and is looking for prepayment for oil exports as an immediate and cost-effective way to help plug its budget deficit.

Monetary support from the Central Bank of Iraq increased to 28.5tn dinars by the end of August, from 14.1tn dinars at the end of May, Fitch said in a note in December.

Borrowing has plateaued because the government requires parliament’s approval to sanction more spending.

The Iraqi government is also considering wide-ranging reforms, which including halving the share of wage bills in spending. Currently, about a quarter of government spending goes on paying civil servants.

Updated: January 3, 2021 02:31 PM

[yota691]

Oil in return for loans ... China is expanding in the region in a deal with Iraq

 

Alhurra - Washington

January 03, 2021

 

 

Fears of the Chinese - Iraqi oil deal

After China concluded strategic agreements with Iran, Beijing readjusted its compass to Baghdad, following the same approach to strengthening its presence in the Middle East, through agreements and trade deals.

For the first time, Iraq, the second largest oil exporter in OPEC, begins to export crude to China, so that it will be pre-paid, which Bloomberg said that the deal was concluded between "SOMO", which is the Iraqi oil company, and the Chinese company, "Chenhua Oil", which is a subsidiary of "Akbar." A Chinese "defense contractor", according to Bloomberg .

The Iraqi News Agency "INA" had quoted the general manager of "SOMO", Alaa Al-Yasiri, as saying that it is an intermediary company and not the owner of oil, and all revenues go to the account of the Ministry of Finance with the Central Bank. 

According to a previous Bloomberg report, the "rare" deal would be to pay China more than two billion dollars in advance for 48 million barrels of oil, which will be supplied during July 2021 through June 2022.

The deal allows Iraqi crude to be shipped to any destination for a year. Usually, Middle Eastern crude is sold under strict conditions that prevent traders and refiners from reselling the barrels to different regions. 

Loan policy 

China is pursuing a loan policy to impose its sovereignty

The deals that China is making in the Middle East are not purely economic, as the monetary support it provides is accompanied by what amounts to a massive erosion of sovereignty, according to a previous analysis of the Vice President of the American Foreign Policy Council, Ilan Berman.

In his analysis, he pointed to the dynamics of Chinese relations in the region closely linked to Xi Jinping's foreign efforts, known as the Belt and Road Initiative, through which China has greatly expanded its presence in the Middle East. 

Bloomberg had indicated that the Sino-Iraqi agreement is an example of the Chinese loan policy, through commercial companies and banks controlled by Beijing, in exchange for payment in oil barrels.

And she warned of the Chinese loan policy, whereby Beijing controls and confiscates some of the assets and assets of other countries when borrowing governments fail to fulfill their obligations, and countries such as Sri Lanka, Pakistan, and recently Laos, which will hand over the largest share of their electric power grid to a company, have fallen victim to this policy. Southern China National Electricity, due to its failure to pay off Chinese debt.

Iranian portal

The agreement will allow Beijing a military presence in the Middle East under the pretext of joint exercises

Despite the importance of the deal, it is also clouded with ambiguity, and its reasons are not known, similar to the Sino-Iranian agreement, whose provisions are still unknown, except that it created an entrance for China to the Middle East.

A spokeswoman for the US State Department, last July, had commented on the Iran-China agreement that "the United States will impose additional burdens on Chinese companies that help Iran, which is the largest state sponsor of terrorism."

She added that allowing or encouraging Chinese companies to carry out sanctioned activities with the Iranian regime, this means that the Chinese authorities are undermining their stated goal of promoting peace and stability.

The Chinese-Iraqi deal comes at a time when Iraq's GDP is expected to contract by 12 percent this year, more than any other member of OPEC, according to the International Monetary Fund's projections.

And Iraq had lowered the official exchange rate in December for the dinar to 1460 against the dollar, instead of 1182, which means reducing the currency exchange value by about a fifth.

[yota691]

SOMO announces that Iraq gets two billion dollars from the pre-sale
 01/02/2021
 
 1239
Baghdad / Al-Mawred News

The National Oil Marketing Company "SOMO" announced, on Saturday, that Iraq has obtained two billion dollars from the pre-sale of oil.

The director of the company, Alaa Al-Yasiri, said in a statement to the official agency, "An agreement was reached to export oil by prepayment," indicating that "Iraq got two billion dollars at zero interest with a premium over the price due to the pre-sale."

Al-Yasiri indicated that "a Chinese company won the oil pre-sale contract."

He added, "SOMO is the only company authorized to export and import petroleum products and surplus crude oil," noting that "Iraq is the second largest source of crude oil in OPEC."

He continued, "The OPEC agreement positively affected Iraq, and we have specialized bodies that conduct technical studies on the target markets and expected revenues."

He stressed that "Iraq was able to contract with the largest government companies in the Indian, Chinese and Korean markets."

Regarding the region’s oil, Al-Yasiri said, “Most of the contracts indicate that the region’s oil is sold at a price less than 6 to 9 dollars than what is sold through SOMO,” explaining that “the quantities of oil exported from the region through the Turkish port of Ceyhan amount to 430 thousand barrels per day. ".

And Al-Yasiri, that "SOMO has the ability to absorb quantities of the region's oil for the purpose of export."

"The oil marketing company does not have differential prices, but rather fixed prices according to the market," he concluded.

SOMO is the institution responsible for marketing oil in Iraq, and it is the only official body authorized under the applicable laws to conclude contracts for the export of crude oil as well as contracts for the export and import of petroleum products .

[gregp]

Great....you sold your soul to the dragon. Now RV your currency!!!

This is really good news!!!!

 Thanks!!

 

[yota691]

Economic Achievements in 2020..China Agreement, Industrial Cities, Self-sufficiency and Development Ambitions

Thursday 07 January 2021 74

 

 Baghdad: the pillar of the emirate

 

The year 2020 witnessed a set of economic events, some of which were achieved, such as the agreement with China, the initiation of industrial cities and the completion of advanced proportions of them, as well as the achievement of self-sufficiency of 25 articles of agricultural crops. On the agreement with China, Economic Advisor in the Prime Minister, Dr. Mazhar Muhammad Salih said, "The Chinese agreement focuses on development projects and infrastructure, especially since the Chinese side has practical advantages and characteristics consistent with Iraq's need for projects."

He explained that "the agreement includes obliging Iraq to produce 100 thousand barrels of oil to a Chinese company and the approved selling and pricing mechanisms, not outside OPEC's share," indicating that "Iraq has a surplus of 500 thousand barrels, but it does not work to export it to avoid flooding the market with oil."

Saleh pointed out that "Iraq's experience with China is encouraging for such an agreement, as the volume of trade exchange between the two countries has reached 30 billion dollars annually, by 20 percent of it for oil, pointing out that 22 percent of Iraq's oil imports are from China's share."

 

Self-sufficiency 

On this subject, a government source revealed that Iraq had achieved self-sufficiency for about 30 agricultural materials, with efforts to support other industries to reach the same stage.

In turn, the Services and Reconstruction Committee in the House of Representatives stated that “supporting local products will be among the priorities of the ministerial curriculum of the government, and that Iraq has managed, at the agricultural level, to achieve self-sufficiency of about 25 agricultural materials as well as 4 animal products, and the competent authorities have prevented the import of these materials in support of the national product “.

The Border Ports Authority has taken several measures to protect the farmers of the tomato crop in Al-Zubair district, indicating that "the measure came due to the farmers’ appeal, against the backdrop of the abuse of the national product and the flooding of the market with crops from neighboring countries without adhering to the agricultural calendar. "

The head of the commission, Dr. Kazem Al-Uqabi, stated that his department had taken several measures after appealing to farmers of the tomato crop in Al-Zubair district.

 

Industrial cities 

The Ministry of Industry and Minerals announced the resumption of work to establish three industrial cities in Basra, Dhi Qar and Anbar, at a time when the industrial project in Nineveh is still suspended due to the reluctance of the implementing company.

The Industrial Development Directorate of the Ministry of Industry stated that “the industrial city in Basra is gaining its importance from its strategic location near the ports, and it is being built on an area of 2000 dunums.

She confirmed that the project will be implemented in phases and the completion rate has reached 33%. As for the second project in Dhi Qar, which extends over an area of 2000 dunums, the completion rate reached 98% and was implemented by the General Company for Industrial Design and Construction, as for the industrial city in Anbar Governorate, which is located on the gray highway. Heet, which is close to the Syrian border, extends over an area of 3000 dunums, and the completion rate has reached 31 percent.

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Iraq offers a new shipment of oil for sale through "prepayment"

 

An oil field in Basra. Reuters

energy Economy News - Baghdad A document revealed, on Thursday, that the Iraqi Oil Marketing Company (SOMO) has offered a total of four million barrels of Basra Light and Medium Crude through immediate bids on January 13th.   Reuters reported, in a report followed by Al-Iktissad News, that it had "seen a document, which showed that the Iraqi Oil Marketing Company (SOMO) offered a total of four million barrels of Basra Light and Medium Crude through immediate bids on January 13th."   The report added, "The total quantity appears to be greater than what the monthly immediate bids of SUMO have seen in recent times."   Two million barrels of Basra Light were offered for loading from the seventh to the ninth of February, and two million barrels of Basra Light crude were offered for loading from 25 to 27 February.   Bids will close on January 18.   Crude shipments have been offered on a free-of-destination basis and are permitted for resale.   Traders say that the SOMO bid will put pressure on the spot market at a time when Asia’s consumption is expected to drop in light of the refinery maintenance season.

Number of observations 11   Date added 01/14/2021

[yota691]

SOMO explains: Our offering of 4 million barrels for immediate sale does not affect the oil market

 

The headquarters of the oil marketing company "SOMO"

energy Economy News - Baghdad The oil marketing company "SOMO" responded to the news that it was increasing the supply of oil, in contravention of the OPEC Plus agreement. The company said, in news published by the "Baghdad Today" agency and seen by "Al-Eqtisad News," that "the shipment of Basra Light Oil is among the dues of service contractors' contracts, and the return on sale is included in the Basra Oil Company account for the cost of operating the Majnoon oil field," noting that " The Basra Medium Oil Shipment is an immediate shipment that falls within the 2021 allocations of crude oil intended for this purpose. " She noted that the quantities offered for sale above of Basra crude oil fall within the limits of production committed by Iraq within the agreement of OPEC and its allies and do not affect the quantities that were agreed upon under that agreement. She noted that the offered quantities do not lead to pressure on the Asian spot market, because the market depends on the mechanisms of supply and demand. Arab and local media published a news story, saying that SOMO had offered 4 million barrels of Basra Light and Medium Crude through immediate sale, which would lead to pressure on the Asian market.

Number of observations 292   Date added 01/14/2021