2 Mar 2009

Iraq seeks to boost oil sales

9:48 am on 2 March 2009

Iraq is to try to revive a national oil company and wants to attract foreign investors to speed up an increase in oil output.

Oil Minister Hussain al-Shahristani said on Sunday he would ask cabinet to approve setting up a national oil firm and a central oil and gas council "as soon as possible" to boost output by 500,000 barrels per day within two years.

This is faster than previously targeted.

In addition, Iraq would invite select foreign oil companies to compete for engineering, procurement and construction contracts, similar in format to a contract in the southern Nassiriya field.

Current output is below pre-war levels and exports are lower than the 2 million bpd pumped in May last year. Oil revenues comprise 90% of government income.

Iraq faces a budget deficit this year as a result of a collapse in global oil prices since last summer.

The government has twice lowered its 2009 spending plans due to falling oil prices. A third draft of the plans, which envisages $US62 billion in spending, is currently before parliament.