BAGHDAD – Iraq Warns Foreign Oil Companies of Cut In Funds; Iraq informed the foreign companies that develop oil fields in the south of the country that they may need to cut spending next year on the development activities due to the lack of what he has dedicated to repay those companies because of falling crude prices funds.
The Iraqi Oil Ministry in a letter dated the sixth of September sent to international oil companies and seen by Reuters, “due to the lower revenues from oil sales Iraqi government greatly reduced the funds available to the Ministry of Oil.”
The statement added, “This will result in reductions in spending within the Ministry of oil and would also reduce the funds available to pay the costs of petroleum contractors with us.”
And affected government revenue negatively fall in crude oil prices to around $ 46 a barrel from $ 115 in June in June 2014 at a time when Iraq faces the second largest oil exporter in the Organization of Petroleum Exporting Countries (OPEC) an economic crisis caused by high spending on the military campaign waged by the militants the organization of the Islamic state.
And it operates international companies such as BP and Royal Dutch Shell, Exxon Mobil, Eni and Lukoil in the oil fields in southern Iraq under contracts whereby the service you get on a fixed-dollar fees in exchange for production.
And impose huge strains on the financial situation of Baghdad, where he earned a sharp drop in crude prices since last year from the sale of oil revenues.
The Ministry has asked oil companies to provide work programs and budgets for 2016 by the end of this month, which “should reflect the sharp decline in steel costs, services and equipment currently prevailing in the market.”
The ministry said in her speech that it does not expect that this will lead to “decline in production from the levels set out in the work programs and budgets for 2015.”