IQD Todays: Kurdish Minister: “KRG, Exxon Mobil oil contract illegible”

Wednesday, 28 March 2012

Kurdish Minister: “KRG, Exxon Mobil oil contract illegible”

Baghdad (AIN) –The Minister of the Natural Resources in Kurdistan Regional Government Ashti Hurami assured that “The agreement between KRG and the US Exxon Mobil to explore oil in the region is going on without facing any hurdles.”

The Website of the Patriot Union of Kurdistan PUK quoted Hurami as saying “The agreement of the Natural Resources with Exxon Mobil is going on with any hurdles to develop six areas for exploring oil,” noting that “Discussions are held with other oil companies in order to reach new agreement within next months.”

He added “The KRG presented new amendments on the Oil Law draft which will be read and discussed in the parliament.”

The Parliamentary Oil and Energy Committee has revealed that there is “An initial agreement has been reached by the KRG and the Central Government over a new form of the Oil and Gas law Draft to be endorsed soon.”

Hurami expected to increase the oil production in the Region during the next few years.

For his part, the Advisor of the Premier for Energy Affairs Hussein al-Shahristani denied the reports over his approval to allow the US Exxon Mobil Company operating in the south of Iraq to explore oil in a number of oil fields in Kurdistan Region and some areas close to Nineveh province.

Meanwhile, the US Government warned the Exxon Mobil Company and other US Companies of concluding oil contracts without permission of the Iraqi Central Government.

On the other hand, The President of Kurdistan Region assured that “The Region will continue its agreement with Exxon Mobil despite the objections of the Iraqi Central Agreement in Baghdad,” describing the objections of Baghdad as “Unconstitutional.”

The Oil and Gas law draft is among the pending files between Erbil and Baghdad in a similar way to the Article 140 of the constitution related to the disputed areas.

Baghdad Central Government conditions its approval on any oil contracts concluded by the KRG or any other local authorities.

The oil revenues represent 95% of the Iraqi Federal Budget, but the country still lacks a law to regulate the oil affairs when the Parliament failed during its former term to endorse the oil and gas law draft.

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There are several reasons why you might wan to invest in the dinar, but with these comes several risks. Investors should be aware of both of these before investing in the dinar.

To help potential investors fully understand the situation surrounding the Iraqi Dinar Investment, we have provided a running list of the pros and cons of investing in the dinar.

PROS:

"All Time Low": The dinar is currently was at an "all-time low" just a few years ago when it was at war. Now, in its postwar state the currency is beginning to appreciate in value.

Progressing Economy: The Iraqi economy is progressing which has resulted in an increasing demand for the dinar. Recent events such as the following have contributed to stabilizing of the economy:

Iraq has a shrinking global debt. Because of the Paris Agreement, the majority of countries to which Iraq was in debt forgave a large amount of that debt. The US, for example, has forgiven all Iraqi pre-war debt.
Since 2004 six western banks have opened in Iraq, and six banks were in operation outside of the country
An estimated 33 billion dollars have been collected for the process of reconstruction of Iraq and companies such as Coca-cola, Chevron, Texaco and Alabama Blount4 Inc. are beginning to invest in Iraq
In 2007 the Iraqi Stock Exchange opened to foreign investors

International Support: Over 60 countries, including the US, Great Britain, Canada, Japan and India are providing financial support to help rebuild Iraq. Several industrial nations from around the world are present in Iraq, serving as military or civilian support to help Iraq establish stability and security.

Several nations are pledging billions of dollars for reconstruction of the infrastructure including power, water, road and highways, IT and phone systems, and health and human services
The US alone has pledged over $18 billion dollars for support, debt relief, and economic connections

Security Features: The New Iraqi Dinar notes have some of the most up-to-date security features help protect against counterfeiting and fraud, including, but not limited to, watermarks, a security thread, raised letters, and an optical variable ink.

CONS:

Speculative Investment: The investment is still very speculative and risky because of the following:
- It is uncertain when the economy will stabilize and become secure enough to invite further foreign investment and trade agreements
- Even once stabilized, it is impossible to predict how international markets will handle trading and the value of the dinar
Uncertain Future of Economy: While right now the economy of Iraq is progressing and there is increasing international support, there is always the risk that this might change. Foreign countries as well of the US may decide to pull out from Iraq if the economy takes a downturn. It is important that Iraq become stable enough to maintain order and security in its own economy without international support.
Long Term Investment: The Iraqi dinar investment is by no means a short term investment and you should not invest money that you do not have, with the expectation that you will get a quick return. It may take a month, a year, or 10 years for the dinar to produce a solid return. However this also may never happen, so remember that you may be sitting on this investment for a long time, and that you should only invest as much as you can afford to lose.
No Exchange Market: The dinar is not yet traded on the open foreign currency exchange market. We cannot predict if/when the dinars will be exchanged on the open market â€“ this again depends on the stability and security of Iraq. Until this happens, the only options you have to exchange the dinar are
- Through ebay
- At certain banks
- Back to dealers
- At currency/collector shows

Wednesday, 28 March 2012

Kurdish Minister: “KRG, Exxon Mobil oil contract illegible”

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