Iraq '09 Budget Could Reach $100B, Up $30B Over '08

IRAQ (Dow Jones Newswires), August 13, 2008

Iraq is expected to prepare a budget of up to $100 billion for 2009, an increase of $30 billion over 2008, if oil prices remain at their current level, head of the oil and gas committee at the Iraqi parliament said Wednesday.

"The finance ministry is expected to submit to the parliament in October an estimated budget of $80 billion to $100 billion for 2009," Ali Hussein Dali told the government's daily newspaper al-Sabaah.

Dali, however, said that budget could only be reached if oil prices remain high. World oil prices had fallen last week to $115 a barrel after reaching a record high of $147 at the beginning of July.

Revenues from oil sales usually finance around 95% of national budgets of Iraq, which is selling an average of 1.9 million barrels a day, he said. Iraq's total foreign currency assets were around $30 billion, he added.

The Iraqi parliament last week endorsed an additional $21 billion to the country's 2008 capital budget, bringing the total budget for the year to around $70 billion.

Iraq needs to spend billions of dollars to improve its aging infrastructure, which has been hard-hit by sanctions and wars.

The U.S. Government Accountability Office said recently Iraq was generating revenue of about $80 billion this year, mainly from oil sales, but spending only about 1% of the total on maintaining critical infrastructure projects.

However, data formulated by the country's planning ministry said the government was spending enough money to upgrade the oil, electricity and industry sectors.

It said that some $1.04 billion were invested during the first six months of 2008 to increase oil production, currently standing at 2.4 million barrels a day.

The Iraqi government data, however, showed that some ministries, such as the interior, were spending only 1% of the money allocated by the budget.

Copyright (c) 2008 Dow Jones & Company, Inc.