BAGHDAD (AP) – Iraq’s prime minister on Friday urged an end to his country’s dependence on oil and gas as the country’s main source of revenue.
Nouri al-Maliki said the country must diversify its economy or risk being vulnerable to drops in oil prices such as the recent fall, which has forced Iraq to trim its budget and could shrink plans for reconstruction.
“It is a hard fact that oil and gas have become the sole source and the basis of our economy,” al-Maliki said at a conference examining new options for Iraq’s economy.
The government is scrambling as Iraq has been hit hard by plummeting oil prices, which have dropped from a summertime high of $150 a barrel to under $45 per barrel. Oil revenues account for more than 90 percent of Iraq’s budget.
The Iraqi government was forced to slash its 2009 budget twice, first from $79 billion to $68.6 billion and then to $64 billion. The parliament has yet to approve the budget because it is still considering further cuts.
The prime minister blamed Saddam Hussein’s regime and the insurgency that followed its collapse for destroying Iraq’s agriculture and much of the oil infrastructure. He also announced that a committee would be formed to oversee development of the devastated oil industry and increase exports.
“Time is crucial … development that has been halted for decades has been hurting the Iraqi people,” he said. Iraq’s Deputy Prime Minister Barham Saleh also warned about the problems facing the oil industry itself. “It is time to make a wide-ranging review of our oil policy,” Saleh said. “We should not stay motionless, doing nothing.”
Iraq, which sits on the world’s third-largest oil reserves of at least 115 billion barrels, has recently offered 19 oil and gas fields to international companies for development in two major bidding rounds.
Iraq plans to add 4 million to 4.5 million barrels a day to its current daily production of 2.4 million barrels over the next four to six years.