Iraq has restarted talks with IMF for a $4 billion loan

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Iraq has recently restarted talks with the International Monetary Fund for a loan after earlier halting such efforts at securing aid, Finance Minister Ali Allawi told reporters Thursday.

Talks between the IMF and Iraq began last year amid the pandemic-related demand shock that sent oil prices tumbling but the discussions were tabled as crude and the country’s foreign reserves recovered. The government now is preemptively looking ahead for help to cover its budget deficit.

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“I don’t think we’ll reach an agreement with IMF before end of this year, Allawi told reporters in Baghdad. With national elections coming up Oct. 10, both the government and the parliament will be sidelined.

Regarding commercial ventures, Iraq, OPEC’s second-biggest producer, is expected to sign an agreement with TotalEnergies SE before the current government’s term ends, though finalizing the contract could extend into the next administration, Allawi said.

On July 25, Iraq’s cabinet gave approval for TotalEnergies SE to develop a natural-gas field and help boost the country’s oil output. The French energy company aims to capture and process 600 million standard cubic feet a day of gas from the Ratawi field, according to the government.

The finance ministry has begun the 2022 draft budget with the price of oil assumed at $50 per barrel, thought that level is not fixed. The ministry in cooperation with the central bank next month plans to issue 1.5t dinar of government treasuries.

On oil, Allawi sees current price levels as good for producers and balanced for consumers. Looking ahead, he expects that the next battle in OPEC won’t be about prices but over who exports more, and if all members boost exports, prices will definitely suffer.

The minister voiced regret over the withdrawal of Exxon Mobil Corp., but said he accepts that the company must answer to its policies.

For the agreement Iraq signed with Lebanon last month to export 1 million tons of heavy fuel oil annually -- to be paid for in services and commodities -- Allawi said Iraq will look to tap Lebanese expertise in the fields of banks, education, tourism and transport.

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