China continues to expand its presence in the Iraqi oil industry, this time through an agreement with the Iraqi state-owned Midland Oil Company to develop the Mansuriya gas field. The Chinese-Iraqi consortium hopes to achieve production of 100 million cubic feet of gas in 18 months and 300 million in 4-5 years. This initiative is part of Iraq’s effort to increase its oil and gas production and reduce its dependence on Iran. China has become the main winner in the Iraqi auctions, leaving the US oil majors behind.
China sweeps Iraq
On the first day of the concessions round in Iraq, Chinese companies were awarded several oil and gas fields. Zhongman Petroleum and Natural Gas Group (ZPEC) won the northern expansion of the East Baghdad field, United Energy Group won the exploitation rights of the Al-Faw field, Zhenhua Oil won the tender to develop the Qurnain field, and Geo-Jade obtained the right to exploit the Zurbatiya deposit. In the following days, other important fields were awarded to these companies and to CNOOC and Sinopec. China has taken advantage of the opportunity left by the reduction of the United States presence in the region and has managed to position itself as one of the main players in the Iraqi energy industry.
investment agreement
In 2019, China and Baghdad signed an agreement called “Oil for Reconstruction and Investment,” which allowed Chinese companies to invest in Iraq’s infrastructure in exchange for oil. As part of this agreement, Chinese companies are close to completing the construction of a 300,000 barrels per day refinery in the port of Faw, in Iraq. This investment will contribute to the development of the Iraqi oil industry and further strengthen ties between China and Iraq.
