» Home » Business News Iraq Directory Services Plans Subscription Contact us Site Map Help About Iraq Iraq plans $4bn oil investment Dubai Iraq plans an investment of approximately $3.75 billion in its oil sector, according to a strategy paper prepared by the Iraqi government. The investment for the country's reconstruction has been estimated at $36 billion through 2007, said the Minister of Planning and Development Cooperation, and chairman of the Iraqi Strategic Review Board (ISRB). "Available internal resources can only finance roughly half of the stated amount in the budget for the period 2005-07. However, the needs are greater than what Iraq can provide for itself," Dr Mehdi Hafedh, Minister of Planning and Development Cooperation, and chairman of the Iraqi Strategic Review Board (ISRB) said, according to a report in the Gulf News. He said that the government is currently not collecting any revenues for the crude oil being supplied to the refineries, which alone is estimated at approximately $5.2 billion annually. Furthermore, the strategy paper said imports of gasoline made necessary by the shortage of refining capacity are projected to cost the country $2.4 billion (Dh8.8 billion) during 2005, said the report. Therefore, the total budget cost arising from the lack of proper refining capacity is close to $8 billion annually - more than 40 per cent of the country's total revenue. "For this reason, the rehabilitation and creation of new refining capacity should take first priority during 2005, in order to reduce the budgetary cost," the minister added. Noting that during 2007 the banking and financial sector and the oil refining sector are expected to generate more than $1 billion (Dh3.67 billion), forming at least 3.6 per cent of government revenues in 2007, the strategy paper pointed out that the introduction of new taxes and the revival of the economy with the key participation of the private sector should expand the revenue base further. The IMF has estimated Iraq's external debt at $125 billion (Dh458.75 billion) of which about one-third ($42 billion, or Dh154 billion) is owed to Paris Club creditors, with Japan, Russia, France, Germany and the United States being the largest creditors. Only 12 per cent of the debt, mostly short term, is owed to commercial creditors. The IMF has found that Iraq's external debt burden is highly unsustainable and that its reduction by anything less than 95 per cent is bound to leave a financing gap, the report said. An amount of $29.8 billion (Dh109.36 billion) has been budgeted for the period 2005-07, to be financed roughly equally from the resources of Iraq and from grants and preferential long-term loans from donor countries." It is estimated that the revenues of the budget during the next three years (2005-07) will be $73.8 billion (Dh270.85 billion), with an yearly average of $24.6 billion (Dh90.28 billion), constituting nearly 97.9 per cent of the expected GDP. Source: Trade Arabia © 2002-2004 Iraq Directory - All Rights Reserved