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

[ChuckFinley]

Now Iraq politicians sell out their own country. In 10 years China will be running that country and have millions of its citizens there.  It will be engulfed by China's buddy Iran.  

[yota691]

Iraq grants a Chinese coalition to implement projects worth 20 billion dollars

•  Time: 01/17/2021 12:39:22
•  
•  Read: 4,303 times

  

{Baghdad: Al Furat News} The head of the Muthanna Provincial Investment Commission, Adel Al-Yasiri, announced today, Sunday, that Iraq has granted a consortium of Chinese companies approval to implement construction projects in the province.

Al-Yasiri said in a statement that the Euphrates News Agency received a copy of, that "the coalition of companies of Holder, Nakir and San Yan of China, will implement several industrial projects worth 20 billion dollars."
He added, "The first phase of the projects amounts to two billion dollars, as two sites have been prepared near the Samawah refinery to be presented to companies and to complete the rest of the procedures."
And the Iraqi official continued, "The consortium of companies was granted the initial approval to establish the projects."
The projects include the construction of a power station, a factory for floors and porcelain with a production capacity of 32 thousand square meters / day, and a factory for the production of ceramic walls and façades with a capacity of 36 thousand square meters / day.
In addition, the projects include a sanitary ware factory with a capacity of 360 m3 per day, a ceramic factory for accessories with a capacity of 108 thousand square meters / month, and a factory for paper and cardboard with a capacity of 125 million cartons per month. "
Ammar Al-Masoudi

[yota691]

Iraqi official: Legislating the budget law will reveal the start of implementation of the Chinese agreement

Advisor to the Iraqi Prime Minister - Mazhar Muhammad Saleh

 February 13, 2021 12:37 PM

 

Mubasher: Advisor to the Iraqi Prime Minister Mazhar Muhammad Salih confirmed today, Saturday, that the budget legislation enacted will reveal the start of the implementation of the Chinese agreement.

Saleh told the Iraqi News Agency (INA), that project financing in the framework agreement with China is stabilized through the credit facilities provided by the Chinese side to the investment projects contracted, according to the same agreement, in the interest of Iraq, especially when oil revenues are low and Iraq's share in the Iraqi fund is low. The same chinese.

He added, "There are two positive indicators for the work of this agreement, which extends for about 20 years. The first is to place allocations in the federal general budget 2021 on the government investment side and about two billion dollars in favor of the agreement and its projects.

The advisor to the prime minister pointed out that "the second indicator, announced a good intention to implement 2000 model schools according to the Iraqi-Chinese agreement."

Saleh pointed out that "the legislation of the federal budget law for the year 2021 will disclose the start of implementation of the agreement and the resumption of work with it."

The Prime Minister’s Adviser for Financial Affairs, Mazhar Muhammad Salih, had previously confirmed to the Iraqi News Agency (INA): "The Iraqi-Chinese agreement is still in effect and extends to twenty years."

He pointed out that "the Iraqi sovereign funds accumulated in favor of the agreement, may have amounted to about one billion dollars since the implementation of it in mid-October of last year."

[yota691]

Iraqi Oil Minister: Talks to build oil storage facilities in China

Iraqi Oil Minister, Ihssan Abdul Jabbar Ismail, Archives

 February 14, 2021 6:07 PM

Mubasher: Oil Minister Ihssan Abdul Jabbar Ismail said that Iraq is holding advanced talks with Chinese state companies. To discuss the construction of crude oil storage facilities in China; As part of a plan to increase oil sales to Asia .

The minister added, according to Reuters today, Sunday, that Iraq is also discussing plans proposed by Pakistan to build facilities for storing crude oil.

Ismail indicated that the Iraqi Oil Ministry has other plans to build storage facilities in some other countries to serve Iraq's interests in marketing its oil.

[yota691]

Iraq back down from selling oil prepaid

Feb 22, 2021 | 10:02 AM   -   Readings: 39 views

 

http://www.al-mawqif.com/wp-content/uploads/2021/02/1-105.jpg

Iraqi position network
 

 

Iraqi Oil Minister Ihssan Abdul-Jabbar announced, on Monday, the freezing of the pre-payment agreement for crude oil after oil prices rose than they were when the prepayment decision was taken, which was aimed at boosting revenues.

Abdul-Jabbar said in a press statement, "With the beginning of this year and the economic stability resulting from the stability of oil prices, we decided to freeze this attempt and freeze this option, and we have not done it until today."

He added, "The fear was that oil prices would not rise above forty dollars when we announced for the first time in the history of Iraq the prepayment decision."

Brent crude was trading above $ 60 a barrel recently.

The (Shenhua Oil Corp.) for the Chinese oil trade had emerged as the most prominent company in a five-year bid for the purchase of Iraqi oil by the Iraqi Oil Marketing Company (SOMO) after it submitted the most competitive bidding, and international oil companies, trading houses and Chinese and Indian refineries participated in the bidding.

Iraq, which is a member of the Organization of Petroleum Exporting Countries (OPEC), was seeking a five-year prepayment agreement that begins in January 2021 and ends in December 2025 for shipments of Basra crude, according to a letter from SOMO to its clients.

The crude oil prepayment agreement stipulated that the winner of the bid would pay Sumo about $ 2.5 billion for 48 million barrels of crude between July 1, 2021, and June 30, 2022.

[gregp]

Poe China

Edited February 23, 2021 by gregp

[3n1]

Iraq Pauses Massive Prepaid Oil Deal With China As Prices Soar

By Charles Kennedy - Feb 22, 2021, 10:30 AM CST

 

Iraq has put on hold an oil supply deal with a Chinese company that featured an advance payment of several billion dollars as higher oil prices make the deal less lucrative than it was a couple of months ago.

Iraq’s oil minister, Ihsan Abdul Jabbar, said in an interview for BBC Arabic that “We had concerns that oil prices would not rise above $40 when we announced this deal for the first time in the history of Iraq,” as quoted by Reuters.

Yet shrinking global inventories of crude oil and the production and refining disruption in Texas last week caused prices to rebound more strongly than OPEC or any of its members might have reasonably expected.

News of the advance payment deal—the first of its kind in Iraqi history—first emerged last November. At the time, Reuters cited a letter by Iraq’s oil marketing company, SOMO, that seeks a five-year prepayment deal that was supposed to start in January 2021 and end in December 2025. Iraq will supply the taker or takers with Basrah crude, the report said.

“Prepaid oil cargoes are part of an urgent plan to boost state budget and overcome financial crisis. We have obligations towards OPEC to cut output, we have to repay foreign companies debts and also to keep our economy standing and this is why we need cash in advance for some of our oil sales,” an oil ministry official told the news agency.

Later reports revealed that the size of the five-year deal was $2 billion, and it was sealed with Chinese Zhenhua, a division of state-owned defense corporation Norinco. Norinco operates a 120,000-bpd refinery, so the deal was quite positive for Zhenhua as it allowed it to lock in low oil prices for the next five years. If the deal is canceled, however, Iraq could lose a prospective buyer for its crude should it need to resort to advance payment deals again.

By Charles Kennedy for Oilprice.com

 

https://oilprice.com/Latest-Energy-News/World-News/Iraq-Pauses-Massive-Prepaid-Oil-Deal-With-China-As-Prices-Soar.html

[yota691]

The Minister of Oil announces the freezing of the pre-payment agreement to sell crude oil

 

energy Economy News _ Baghdad Iraqi Oil Minister Ihsan Abdul-Jabbar announced, on Monday, that the pre-payment agreement for the sale of crude oil, which began about two months ago, has been frozen.     "Iraq decided to freeze the pre-payment agreement for crude oil, which was aimed at boosting its revenues due to improved crude prices and the stability of its market," Abdul Jabbar said in a televised interview.   He added, "With the beginning of this year and the economic stability resulting from the stability of oil prices, we decided to freeze this attempt and freeze this option, and we have not done it until today."

Number of observations 381   Date added 02/22/2021

[yota691]

AL-KAZEMI ADVISOR REVEALS THE REASONS FOR SUSPENDING THE PRE-SALE PROGRAM FOR OIL

Monday, 15 March 2021 10:15 PM

 

 

Private / National News Center

On Monday, the financial advisor to the Prime Minister, Mazhar Muhammad Saleh, revealed the reasons for suspending the pre-sale program for oil.

In a special statement to the National News Center, Saleh said, “The government and the Federal Ministry of Oil have suspended work on the oil pre-sale program, which was intended to benefit from it by providing the highest possible liquidity to overcome the financial crisis that the country went through during the last period due to its low Oil prices and the Corona pandemic ”.

He added that “suspending work in the program is due to two main reasons, the first is the pressure of the foreign party funded under the aforementioned financing program (meaning future supplied oil in return for money paid immediately) and in quantities that were estimated at the time at about 48 million barrels of crude oil withdrawn over a year and a half as well. He mentioned at the time, and was priced at an average price of a month after the signing of the contract, which came in the direction of pressure from the foreign financier to obtain additional bank or sovereign guarantees that can be collected at any time (i.e. in addition to the guarantee of the same quantities of oil that the financing company will receive over the course of days in the future), which is a requirement. In our opinion, there is some compliance, as well as the risks of an experiment in financing that Iraq has never entered into. ”
He pointed out that “the second main reason: is bearing the risks of high oil prices, which are accelerating at a sensitive stage in energy markets, as the cycle (oil assets) began to shift from the turning point of the lower oil price towards an accelerated rise, which means that the price differences are due to the preparation of "Iraq for oil to the foreign company over the course of a year and a half at the prices of depressed oil market conditions, means losing the opportunity to sell at high prices with the passage of days, and the oil market is rapidly heading towards détente or boom."

And that "this means the loss of large financial returns that exceed even the cost of direct cash borrowing from any alternative financial source, whether the lender is a local or foreign banker, with the offer that the need for an emergency leverage to support the budget has ceased under relatively good financial optimistic conditions."

Saleh emphasized that “it is wise to neglect the agreement, especially since the global oil futures market positions have changed from (short) to (long) positions, which means (buying oil at low immediate prices in order to resell oil in the future at high prices) future prices), a situation today called the condition of oil futures markets by the term (contango-kantanko) ”.

[SocalDinar]

• OIL
•  
• 23 Jun 2021 | 10:02 UTC

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

HIGHLIGHTS

SOMO scraps deal due to rising oil prices

$2 billion deal would have been the first for SOMO

Zhenhua to continue previous term contracts with Iraq

 

Iraq has scrapped a $2 billion pre-paid oil supply agreement with China's state-owned Zhenhua Oil Co. and sold the crude earmarked for the deal to other customers, as Baghdad seeks to take advantage of rising prices, a top oil official told S&P Global Platts.

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Iraq's State Oil Marketing Organization earlier this year had selected Zhenhua as the winning bidder for the agreement, which included a one-year $2 billion prepayment and called for 4 million barrels of crude to be supplied each month.

Under the deal, the oil was supposed to be destination-free and Zhenhua would have been allowed to resell cargoes.

"For the time being we may say it is not applicable at this stage because of oil prices, which are high and we are in a better position and we are even generating additional profits in excess of what the Iraqi budget needs," SOMO's deputy director general Ali al-Shatari told Platts. "The oil has been allocated already. We have demand for our crude more than the availability of crude so at any time we have excess of crude, a number of customers would need to take it and to increase their contractual quantities based on it."

Iraqi oil minister Ihsan Ismaael had said Feb. 21 that SOMO had decided to "freeze" the deal, which would have been the state marketer's first such transaction.

SOMO sold its crude at an average oil price of $65.842/b in May, a 23.5% increase from its average oil price in January, according to oil ministry data.

 

Profit sharing

 

A Beijing-based source with knowledge of the matter confirmed that Zhenhua and SOMO had terminated the deal. However, Zhenhua's previous term contracts for Iraqi crude have not been affected, the source added.

Zhenhua supplies about 18 million barrels of Iraqi crudes each year to its sister refinery Huajin Chemical, in addition to cargoes to other Chinese refineries, market sources said.

"We have a good and even perfect business relationship with our Chinese customers including Zhenhua. They understand our position," said Shatari.

Zhenhua, owned by Norinco, has been lifting Iraqi crude for its refineries since early 2009. In 2019, SOMO signed a profit-sharing agreement with Zhenhua, under which SOMO gets a percentage of the earnings from resold Iraqi crude.

SOMO also has a similar profit-sharing agreement with state-owned Sinochem.

Usually SOMO's contracts with customers are for oil sold directly to their refineries, but these profit-sharing agreements allow companies such as Zhenhua and Sinochem to sell the Iraqi crude to other customers, mainly in the Far East.

Shatari declined to disclose the percentage of profit sharing, the majority of which goes to SOMO.

 

Storage facilities

 

SOMO is also exploring other business opportunities with a number of customers including Zhenhua, Shatari said.

"We have current business ideas, in general, to increase SOMO and Iraq's crude existence in the Chinese market and Asia in general," Shatari said. "This may include storage capacities, trading activities or facilitating trading activities in the market itself, not necessarily on FOB basis from Iraq. It could be even from there in China to sell our crude and to enter other products' business."

SOMO has been in discussions with companies in Asia, including China, to have storage for Iraqi crude there.

"There is progress in discussions, but not in taking the final decision or which one is more feasible than another," said Shatari. "But the number of companies offering this and the expansion of the way we are digging deep into the details in these discussions can be marked as progress."

In May, Iraq was the third biggest oil exporter into China, after Saudi Arabia and Russia.

India and China are Iraq's largest crude export markets.

---

•  

In a fast-changing landscape where energy transition is the most popular catch phrase, the trading community is looking for answers on what's in store for the oil market over the next decade.

 

https://www.spglobal.com/platts/en/market-insights/latest-news/oil/062321-iraq-fully-cancels-pre-paid-oil-deal-with-chinas-zhenhua-sells-crude-to-other-customers

 

[Laid Back]

“For the time being we may say it is not applicable at this stage because of oil prices, which are high and we are in a better position and we are even generating additional profits in excess of what the Iraqi budget needs,"

 

Can you say Budget Surpluss.!

[shixjr]

Hey Laid Back, I'll bet if oil had gone down, they would have kept that contract in place!  Can they legally cancel it simply because the price of oil went in their favor and created that surplus?

[Laid Back]

4 minutes ago, shixjr said:

Hey Laid Back, I'll bet if oil had gone down, they would have kept that contract in place!  Can they legally cancel it simply because the price of oil went in their favor and created that surplus?

We don’t know what kind of deal Iraq have with China, all depends on contract clauses.

[shixjr]

1 minute ago, Laid Back said:

all depends on contract clauses

The only Claus I like is Santa Claus!

[shixjr]

I think I will try this in my business.  I'll make the deal, and then if I don't like the way it is going, I'll cancel the deal.  If they throw me in jail, will someone on this forum bring me some cigarettes please?  Oh, I forgot, I don't smoke!  😁  I'll keep y'all informed on how this goes for me.  By the way, anyone on DV want to make a deal?  🤣🤣