Thread: Iraq/Dinar News. (before Jan.20,2007)

The prime minister's statement to the press -

17-01-2007(Voice of Iraq) - 17-01-2007
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الأربعاء 17/1/2007Wednesday, January 17, 2007


يPress statement


ق.Prime Minister Nuri al-Maliki that the national unity government was keen to develop Iraq's foreign relations with the countries of the world and expand the common goals with the international community. He pointed out that the support of Iraq by the State of the best love, peace and democracy that would help them succeed in the face of challenges.
.He said sovereignty today in his office when he received the official ambassadors accredited in Baghdad that the security plan, which will begin by Iraqi forces in the coming days will be under Iraqi command and the attribution of the multinational forces.
.And, Mr. Prime Minister, that the security plan would not allow any safe haven outside the law regardless of their ethnic or political affiliation. Although this plan involving army and police forces are inclusive in all locations. He added that the sovereignty of this plan depends focus on the security side and not to allow political interference, which would confuse the security men.
.He continued : that this plan, which we called the "imposition of the law" so that neither one is immune to them.
.He said sovereignty that the plan will be launched from areas depopulated and the arrest of immigrants occupied homes, and to clean Baghdad of terrorism and the conflict with the law, there will be no sanctuary in Baghdad, outside any law in any home, office or location.
.And Mr. Prime Minister, that there are aspects of political, media and service to ensure the success of the security plan, and said that committees had been formed to support the security plan, which the political, economic, media and the provision of services.
.And Mr. Prime Minister : soldiers and officers recommended the importance of decisiveness and firmness in the face of terrorist groups and death squads with respect for the controls and rules, and to take maximum discipline during inspections and raids dens.
ة.Turning sovereignty to the role played by countries participating in the International Covenant with Iraq and the assistance that could be provided by him and its importance to its success in the face of challenges and improve its internal affairs.

www.iraqi-pm.orgWww.iraqi-pm.org

It has been very encouraging to me to read the various posts here since
Rolclub's return from the virus/spam attack wars.

Mike5200 reported from his source that SGS's sources have basically been
sound since July but that each time an r/v date was planned something
intervened to postpone the event. Interestingly, the CBI wanted to r/v in
October but was disuaded by "economist experts." In retrospect it appears
to me that these economist experts were absolutely right is counseling for a delay, because Iraq now finds itself with approximately three (3) trillion
fewer dinars to contend with since November. The CBI has been able to
pull these dinars out of circulation basically for peanuts, whereas after the
r/v doing so would have been very expensive indeed. Postponing the r/v
in my opinion has also exerted positive pressure on the GOI to complete the FIL and HCL.

I remember reading last summer that one of the main keys to Kuwait's
successful r/v after the first Gulf War was that it was able to keep the
amount of Kuwaiti dinars in circulation at a very static and constrained
level. Until the last two and ahalf months Iraq had very little of such
constraint. Recently, that has all changed.

Socatta's dutiful and excellent chronicles of the pulling out of three (3)
trillion dinars shows us that the CBI has in fact followed the counsel of the
economist experts. And when this action is coupled with the information
from wciappetta yesterday that the amount of dinars in circulation in
November of 2005 was only 4.62 trillion, it appears possible that the actual
amount in circulation now is approaching a number south of one (1) trillion;
especially since I have read recently that the amount taken out of circulation
in all of 2006 may have been closer to five (5) to seven (7) trillion. I know
that this math does not work, but it does tend to lead to the conclusion
that we are approaching a very manageable amount of dinars in Iraq - not
unlike the amount that was in circulation in Kuwait in 1991.

Originally Posted by Ranger III

It has been very encouraging to me to read the various posts here since
Rolclub's return from the virus/spam attack wars.

Mike5200 reported from his source that SGS's sources have basically been
sound since July but that each time an r/v date was planned something
intervened to postpone the event. Interestingly, the CBI wanted to r/v in
October but was disuaded by "economist experts." In retrospect it appears
to me that these economist experts were absolutely right is counseling for a delay, because Iraq now finds itself with approximately three (3) trillion
fewer dinars to contend with since November. The CBI has been able to
pull these dinars out of circulation basically for peanuts, whereas after the
r/v doing so would have been very expensive indeed. Postponing the r/v
in my opinion has also exerted positive pressure on the GOI to complete the FIL and HCL.

I remember reading last summer that one of the main keys to Kuwait's
successful r/v after the first Gulf War was that it was able to keep the
amount of Kuwaiti dinars in circulation at a very static and constrained
level. Until the last two and ahalf months Iraq had very little of such
constraint. Recently, that has all changed.

Socatta's dutiful and excellent chronicles of the pulling out of three (3)
trillion dinars shows us that the CBI has in fact followed the counsel of the
economist experts. And when this action is coupled with the information
from wciappetta yesterday that the amount of dinars in circulation in
November of 2005 was only 4.62 trillion, it appears possible that the actual
amount in circulation now is approaching a number south of one (1) trillion;
especially since I have read recently that the amount taken out of circulation
in all of 2006 may have been closer to five (5) to seven (7) trillion. I know
that this math does not work, but it does tend to lead to the conclusion
that we are approaching a very manageable amount of dinars in Iraq - not
unlike the amount that was in circulation in Kuwait in 1991.

I would like to present a different perspective to your post which by the way I feel is good and informative.

Interestingly, the CBI wanted to r/v in
October but was disuaded by "economist experts." In retrospect it appears
to me that these economist experts were absolutely right is counseling for a delay, because Iraq now finds itself with approximately three (3) trillion
fewer dinars to contend with since November. The CBI has been able to
pull these dinars out of circulation basically for peanuts,

What I would like to point out is at what cost has this been to the Iraqis? If they would have r/v'd in Oct., could it not be argued that even though the r/v might not have been as high as it is likely to be whenever they get around to showing up and voting, how many lives could have been saved if their economy would have gotten a positive shot in the arm in Oct or 3 months ago?

One of my problems with the GOI is not their calculating or manipulating skills, but their lack of compassion for their fellow countrymen (& women). Their economic plan would have already been underway 3 months ago, their security would have had an extra 3 months to begin to improve, the Iranians would have faced less cooperation from a desperate population to feed and clothe themselves and willing to kill their fellow countrymen just so they could get paid by the insurgents & Iranians a few hundred bucks planting roadside bombs and car bombs.

IMO the economists are seldom satisfied. They always want to tweak the economy this way or that. Look at the US and the Fed. Arguably when Greenspan was the fed chairman, he messed around with economy all the time because he didn't like this or that on a spreadsheet. This caused many Americans needless pain especially when other experts pointed out the flaws in his logic and manipulations.

Since we didn't r/v in Oct there is no way of determining if my opinion would have proved correct. Unfortunately for the Iraqis, we have history that will show thousands of innocent lives lost during this time period. Again I appreciate your post. It is well laid out and thought through. I would imagine the economist that are pushing it are patting themselves on the back. My only question is at what cost?

I sincerely hope they quit facking around and r/v now. They have bled their economy dry of dinars, caused chaos in the market place because of the constantly changing value and lack of the dinar. Now they need to r/v and r/v big (and I am not talking 1260 or 1000 but rather .25 - 1/1) and then hold it for a while (6 months or so) and let the economy settle down and the Iraqis increase their purchasing power to where it should have been all along. Then they can allow it to float upwards towards where it was before (3.22) or even higher. They have the assets it is worth it. imo

worf

I believe this is the reason why we are moving forward now!

Iraq Amended Draft Law Sets Out New PSA Model
by Hassan Hafidh
Dow Jones Newswires
Tuesday, January 16, 2007


Jan 16, 2007 (Dow Jones Commodities News)
An amended copy of a draft Iraq hydrocarbon law sets out a new model for production-sharing agreements, or PSAs, with Western companies, a senior Iraqi oil official said Tuesday.

Kurdish and Baghdad officials will meet this week to tackle their dispute over the paper, the official said.

The amended copy of the controversial law dated Dec. 15, seen by Dow Jones Newswires, doesn't refer directly to PSAs, as the first draft did a few months ago.


"We have changed the text of the law from PSA to development and production contract in order to avoid (media) fuss," said the senior official, who is close to the committee entrusted with drafting the law.
The new draft law recommends the Iraqi government sign "development and production contracts," or DPCs, along with service or risk production contracts with foreign companies to upgrade the country's war-ravaged oil industry.

The 38-page document states: "A model contract could be based on service contract, development and production contract or risk contract."

An older copy of the draft from August stated: "A model contract could be based on service contract, buyback or PSA."

Iraq's hydrocarbon law is crucial as a basis for international oil companies to begin discussions on investing in the country's under-exploited and run-down oil sector, and to generate much-needed reconstruction revenues.

U.K. newspaper The Independent reported this month that Iraq's massive oil reserves may be thrown open for large-scale exploitation. Western oil companies "could end up grabbing up to 75% of the beleaguered nation's oil profits under an oil law," the paper reported.

The Iraqi oil official rejected The Independent's report, saying it is baseless. "The law states that the government should make the utmost returns from our oil and gas resources and that Iraq owns all its (oil and gas) resources," he said.

Negotiations with Western companies could start immediately after parliament approves the draft law, which could be in "the first quarter of this year," the official said.

New PSA Model

The official said the draft law doesn't spell out what kind of PSAs Iraq would sign with Western oil companies, but officials have agreed that the Iraqi government should have its own model of PSA. The new model is based on both PSAs and buyback contracts, he said.

The official said the new Iraqi PSA model, or DPC, would state the following terms:

--Companies cannot book crude oil reserves of any given oil field in their own market capitalizations, as is the case with ordinary PSAs.

--Iraq will pay the costs of the contract in cash, rather than paying back the money through produced crude oil or products, he said.

--All equipment brought by the company to carry out the contract is the property of Iraq. The company, however, has the right to use this equipment to carry out work in Iraq.

--Any extension of the contract beyond the original timeframe should be approved by the Iraqi cabinet.

--Profit received by the company is to be agreed on by both sides, for example, one dollar on each barrel produced for a certain period of time, the official said.

The official said the Iraqi government wants to sign DPCs to develop undiscovered oil fields, rather than to discovered oil fields.

The new draft law also recommends signing service and risk production contracts. A risk production contract allows a company to explore and develop a particular location, but doesn't give it the right to claim back expenses from the Iraqi government if it doesn't find oil.

The draft law recommends setting up model, or prototype, contracts after the approval of the law.

It also recommends the establishment of an Iraqi National Oil Company, and a Federal Oil and Gas Council. The latter would approve oil contracts and set the country's petroleum policies, and would include ministers of oil, finance, and planning, plus the governor of the Iraqi Central Bank and a representative from each region or province.

Disputed Points

Officials from Kurdistan Regional Government, or KRG, and the federal government in Baghdad are to meet this week to discuss disputed points in the law, the Iraqi oil official said.

Under the draft law, the Iraqi cabinet would have the final say on contracts signed with companies, he said. "The Kurds want to change that and propose that the law should state instead: 'The Iraqi cabinet can review signed contracts.'"

The other point the Kurdish government disagrees with is that the draft calls for reviewing existing contracts, including some signed by the KRG with Western companies, to bring them in line with the new law.

"The Kurds want to review the contract they have signed themselves, and not a federal council set up by the Iraqi government," the official said.

However, he said he believes these are minor issues and can be settled easily.

The draft law recommends that all contracts signed by the KRG are "valid provide that they are reviewed and made in accordance with the provision of this (oil) law."

The Kurdish authority has already signed agreements with several small oil and gas companies, including U.S.-based Calibre Energy Inc. (CBRE), Canada's Addax Petroleum Corp. (AXC.T), Norway's Det Norske Oljeselskap (DNO.OS) and Turkey's Petoil.

The draft law recommends that all contracts signed under Saddam Hussein's regime should be reviewed and re-negotiated.

They include the $1.2 billion contract signed with China's National Petroleum Corp. in 1997 to develop al-Ahdab oil field in southern Iraq, and a $3 billion contract signed with Russia's OAO Lukoil Holdings (LKOH.RS) to develop the giant Majnoon oil field in the south.

"In order to make it valid, any contract related to exploration and oil production signed in the past should be reviewed, rewritten and renegotiated in a manner that should be in line with the provision of the new Iraqi constitution and this law," the draft says.

Copyright (c) 2007 Dow Jones & Company, Inc.

RIGZONE - Iraq Amended Draft Law Sets Out New PSA Model

Originally Posted by worf

I would like to present a different perspective to your post which by the way I feel is good and informative.

Interestingly, the CBI wanted to r/v in
October but was disuaded by "economist experts." In retrospect it appears
to me that these economist experts were absolutely right is counseling for a delay, because Iraq now finds itself with approximately three (3) trillion
fewer dinars to contend with since November. The CBI has been able to
pull these dinars out of circulation basically for peanuts,

What I would like to point out is at what cost has this been to the Iraqis? If they would have r/v'd in Oct., could it not be argued that even though the r/v might not have been as high as it is likely to be whenever they get around to showing up and voting, how many lives could have been saved if their economy would have gotten a positive shot in the arm in Oct or 3 months ago?

One of my problems with the GOI is not their calculating or manipulating skills, but their lack of compassion for their fellow countrymen (& women). Their economic plan would have already been underway 3 months ago, their security would have had an extra 3 months to begin to improve, the Iranians would have faced less cooperation from a desperate population to feed and clothe themselves and willing to kill their fellow countrymen just so they could get paid by the insurgents & Iranians a few hundred bucks planting roadside bombs and car bombs.

IMO the economists are seldom satisfied. They always want to tweak the economy this way or that. Look at the US and the Fed. Arguably when Greenspan was the fed chairman, he messed around with economy all the time because he didn't like this or that on a spreadsheet. This caused many Americans needless pain especially when other experts pointed out the flaws in his logic and manipulations.

Since we didn't r/v in Oct there is no way of determining if my opinion would have proved correct. Unfortunately for the Iraqis, we have history that will show thousands of innocent lives lost during this time period. Again I appreciate your post. It is well laid out and thought through. I would imagine the economist that are pushing it are patting themselves on the back. My only question is at what cost?

I sincerely hope they quit facking around and r/v now. They have bled their economy dry of dinars, caused chaos in the market place because of the constantly changing value and lack of the dinar. Now they need to r/v and r/v big (and I am not talking 1260 or 1000 but rather .25 - 1/1) and then hold it for a while (6 months or so) and let the economy settle down and the Iraqis increase their purchasing power to where it should have been all along. Then they can allow it to float upwards towards where it was before (3.22) or even higher. They have the assets it is worth it. imo

worf

I appreciate your response and believe that all of your points are well taken.

My analysis was purely clinical and financial; yours is more humanistic, political and empathetic.

I agree with you that is high time for the CBI and GOI to forget about squeezing the last dinar out of the economy at the expense of and on the backs of the common Iraqi citizen, twelve million of whom risked their lives
to vote for a govenment that takes too many vacations, can't seem to
muster a quorum and has forgotten about from whence it draws its power.

It seems to me that a convergence of our posts here leads to the inescapable conclusion that an r/v today is the right thing to do.

Originally Posted by Ranger III

I appreciate your response and believe that all of your points are well taken.

My analysis was purely clinical and financial; yours is more humanistic, political and empathetic.

I agree with you that is high time for the CBI and GOI to forget about squeezing the last dinar out of the economy at the expense of and on the backs of the common Iraqi citizen, twelve million of whom risked their lives
to vote for a govenment that takes too many vacations, can't seem to
muster a quorum and has forgotten about from whence it draws its power.

It seems to me that a convergence of our posts here leads to the inescapable conclusion that an r/v today is the right thing to do.

Agreed and thanks again for your analysis I thought it was insightful and well thought out.

worf

Iraq leaders agree draft oil law
17 Jan 2007 12:24:06 GMT
Source: Reuters

BAGHDAD, Jan 17 (Reuters) - Iraq's Oil Committee has agreed a final draft of an Oil Law that sets rules for sharing revenues and boosting output and aims to bring in billions of dollars of foreign investment, an Oil Ministry spokesman said on Wednesday.

The draft, drawn up senior national and regional leaders, calls for a federal committee headed by the prime minister to oversee all future contracts. It will have the power to review existing deals signed under Saddam Hussein or by the Kurdish regional government, spokesman Asim Jihad said.

Passing an oil law to help settle potentially explosive disputes among Iraq's ethnic and sectarian communities over the division of the world's third biggest known crude oil reserves has been a key demand of the United States in providing further military support to the national unity government.

The negotiating team, headed by Deputy Prime Minister Barham Salih, had finalised the draft late on Tuesday, Jihad said, and the bill would go to the full cabinet next week for approval. After that it will go to parliament. Officials hope that the broad base of the negotiating team means it will pass easily.

The final draft was in line with earlier versions described last month after a previous round of talks. A national oil company would be set up to develop production and exports and the law is intended to ensure balanced development of the oil industry across Iraq's regions, Jihad said.

It establishes a mechanism for centralising oil revenues and distributing them to the various regions.

The division of oil is a key factor in communal tensions in Iraq. The southern oil fields around Basra lie in territory controlled by competing factions of the dominant Shi'ite Islamist political forces, some of whom are close to Iran.

The northern fields lie on the edge of Iraqi Kurdistan around the city of Kirkuk. Kurds want to annexe the city as their regional capital and ethnic Arabs and Turkmen accuse the Kurdish militants of ethnic cleansing before a referendum on the city's future which, under the constitution, is due this year.

The Sunni Arab minority dominant under ousted president Saddam Hussein is concentrated in Baghdad and regions immediately to the north and west where there are few known hydrocarbon reserves -- though some potential future finds.

Sunnis have been particularly insistent that the central government in Baghdad control the oil industry, despite a new, U.S.-sponsored constitution, opposed by most Sunnis, which gives newly created federal regions some powers over oil and gas.

Washington and the government of Shi'ite Prime Minister Nuri al-Maliki are mounting a major security crackdown in the divided capital Baghdad over the coming months to avert an all-out civil war there between Sunni insurgents and Shi'ite militias.
http://www.alertnet.org/thenews/newsdesk/MAC743964.htm

To worf and ranger III. Both are excellent posts. And cover all of the relevent reasons for an RV. My only comment is that they the CBI can not continue this process of removing dinar for much longer. There is a finite limit as to how much can be removed. The more the better for us, but they have to be approaching the bottom of the pot. There is a limit. We might not kow exactly what that level is, but it is there. And I think they have to be reaching it very soon. Thank You.

Originally Posted by Wm.Knowles

To worf and ranger III. Both are excellent posts. And cover all of the relevent reasons for an RV. My only comment is that they the CBI can not continue this process of removing dinar for much longer. There is a finite limit as to how much can be removed. The more the better for us, but they have to be approaching the bottom of the pot. There is a limit. We might not kow exactly what that level is, but it is there. And I think they have to be reaching it very soon. Thank You.

One problem, Like I have said a hudred times before. You have no idea how many dinar are going back out. Its not all intake.

One thing that is PERFECTLY 100% CERTAIN is that NOBODY, even the Iraqi's know WTF is really going on. So keep up the speculations...why not, the GoI is....