Financing problems deal another blow to Iraq oil

[Robbien]

Fri Apr 30, 2004 08:24 AM ET
By Khaled Yacoub Oweis

BAGHDAD, April 30 (Reuters) - Iraq has lost the only short-term option to finance oil projects by scrapping a $1.4 billion borrowing plan, raising more doubt about its ability to sustain output, industry insiders said on Friday.

The occupied country has quietly rejected the debt offer from a U.S.-led banking consortium, which involved mortgaging oil exports, as consensus is lacking on how to invite foreign companies and political instability discourages investment.

"It was a good borrowing plan, based on technical needs and lacking the political interference we usually experience in Iraq," a well-connected Western oil executive told Reuters. "They basically had no other option. Foreign investors will not come and invest in oil field development until there is an energy law they could rely on," he added.

Iraq needs to finance dozens of projects designed to help double production to five million barrels per day in the next five years. The plans include setting up a national oil company to run the sector as a new government works out how to invite foreign investment without compromising national ownership.

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=5000965

[jmcgowanjm]

1. "Simply not accurate," on amount claimed to be exported-UPI

exports are down from 2.5 million barrels a day to around 1.5 million barrels a day, according to these sources.

http://www.occupationwatch.org/article.php?id=4435