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The first and second oil licensing deals could raise production capacity, in Iraq, to somewhere between 9.4 and 12.3 million barrels per day (mbd) by 2020; up from 2.5 mbd in 2009. Revenues from proportionate oil (and gas) exports will surpass budgetary and balance of payments requirements. Consequently, foreign exchange and fiscal surplus would accumulate. Setting the production/exports level according to economic needs will reduce the tendency for excessive production and budgetary surplus. After 2040, however, oil production will start to decline. Exports will decline faster as a result of growing domestic consumption. Uncertainty about long-term oil use and fiscal deficits, after 2040, necessitate higher oil production and budgetary surplus before 2040. Through an oil fund, accumulated surplus can be managed efficiently and transparently. Its investments provide a source of income. It can also contribute to the smoothing out of annual public expenditures. Hence, it is a saving/stabilization fund. Therefore, the existence and sound management of an oil (saving/stabilization) fund are required for the preservation of sustainable public expenditures and maintenance of standards of living. Furthermore, social reconciliation and effective institutions could pave the way to reduce rentierism and enhance governance by agreeing on ways and means to rationally share and use oil income, including that from saving/stabilization fund.