Increased oil revenues have allowed Iraq to add around $9 billion to its 2012 budget bringing the total budget for the year to above $110 billion, a government spokesman said Tuesday.

Ali Al Dabbagh said in a statement the cabinet approved a budget increase of 10.875 trillion Iraqi dinars during a meeting held Tuesday in Baghdad.

Of the newly added money, some IQD2 trillion would go to badly needed power projects, IQD1.4 trillion would be allocated for foodstuffs that come within the food ration basket distributed by the government to Iraqis, IQD1 trillion for the ministry of defense and IQD830 billion as compensation to Kuwait for the Iraq war in 1990, Mr. Dabbagh said.

The new added amount of budget still needs the approval of the country’s parliament, he added.

In February this year, the parliament approved a national budget of $100.5 billion for 2012.

During the first five months of this year, Iraq earned from oil sales some $45.3 billion. Oil prices have started to slide over the last few months, after they reached a peak of around $123 a barrel earlier this year.

Iraq’s 2012 oil revenues are expected to exceed last year’s which were $82.9 billion, officials said.

Iraq’s oil revenues have been growing over the last few months as the country’s crude oil exports have been picking up since the start of operations of two Single Point Mooring buoys in the Gulf.

Iraq is currently exporting around 2.4 million barrels a day up from around 2.1 million barrels a day last year. Iraq is targeting to raise exports to 2.6 million barrels a day by the end of this year.

Finance ministry officials have said that Iraq’s 2013 budget is expected to rise to around IQD130 trillion ($109 billion) based on an oil price of $85 a barrel and crude exports of 2.9 million barrels a day.

Source: Dow Jones & Rigzone