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Page added on February 27, 2009

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Iraq needs more oil production to rebuild country

BAGHDAD: International companies have been chomping at the bit for years to tap Iraq’s vast oil wealth. But Iraqi officials are the ones who have stepped up efforts to get firms on the ground quickly

Low crude prices have not diminished foreign oil companies’ desire to tap into Iraq after years of sanctions and other restrictions. But negotiations between the two sides have been complicated by disagreements over deal terms, persisting concerns about security and the absence of a national law regulating Iraq’s oil industry.

The sense of urgency has spiked in Iraq as officials have watched oil prices fall from a record high near $150 per barrel in July to around $40 today.

The Iraqi government relies on oil sales for more than 90 percent of its revenue. Falling oil prices have reduced the projected 2009 budget from $79 billion to $64 billion and have forced Iraqi officials to slash rebuilding plans by 40 percent.

International Herald Tribune

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