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China Dominates in Bids to Explore for Iraq Oil and Gas

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China Dominates in Bids to Explore for Iraq Oil and Gas

China-based companies have received five more bids to explore Iraqi oil and gas reserves, Iraq’s oil minister announced on Sunday, as the country’s hydrocarbon exploration licensing round entered its second day.

Chinese businesses have been the only international players to win bids thus far, winning licenses for ten oil and gas fields since Saturday, while Iraqi Kurdish company KAR Group took two.

More than 20 firms, including European, Chinese, Arab, and Iraqi groups, have pre-qualified for oil and gas licenses for 29 projects, with the primary goal of increasing output for domestic use.

Iraq requested this licensing round, the country’s sixth, to enhance natural gas output, which it intends to use to fuel power plants that rely largely on Iranian gas imports.

However, no bids were submitted for at least six gas-rich areas, possibly weakening their efforts.

Notably, no US oil corporations have been participating, despite Iraqi Prime Minister Mohammed Shia meeting with leaders from US companies during an official visit to the US last month.

China Iraq Ties Strengthened

China’s CNOOC Iraq won a bid to develop Iraq’s Block 7, which spans the country’s center and southern provinces of Diwaniya, Babil, Najaf, Wasit, and Muthanna, according to oil minister Hayan Abdul Ghani.

The minister announced that ZhenHua, Anton Oilfield Services, and Sinopec had won bids to develop the Abu Khaymah oilfield in Muthanna, the Dhufriya field in Wasit, and the Sumer field in Muthanna, respectively.

China’s Geo-Jade has won the bid to develop Iraq’s Jabal Sanam field for oil exploration in Basra province, according to Iraq’s oil ministry.

Iraq, OPEC’s second-largest oil producer after Saudi Arabia, has been impeded in its oil sector development by contract terms deemed unfavorable by many major oil corporations, as well as periodic military conflicts and a growing investor emphasis on environmental, social, and governance factors.

China has recently strengthened commercial and political connections with Iraq. As a major oil importer, China seeks consistent energy supply from the oil-rich country. Iraq, in turn, welcomes Chinese investment to repair its infrastructure following years of conflict.

Beijing has offered loans and construction contracts to Baghdad, strengthening its position in the area. Major Chinese corporations, such as Zhenhua Oil, have won contracts to develop Iraqi oil reserves. This mutually beneficial partnership allows China access to resources while also assisting Iraq’s reconstruction efforts.

However, there are fears about China’s expanding influence in the Middle East. Critics claim that Beijing’s “no-strings-attached” partnerships harm democracy and human rights. As ties strengthen, the world observes how this dynamic between an economic giant and a resource-rich country plays out.

Iraq Backs OPEC’s Oil Output Cuts

Meanwhile, Iraq’s oil minister told the state news agency on Sunday that the country is committed to voluntary oil production cuts agreed upon by the Organization of Petroleum Exporting Countries (OPEC) and is eager to collaborate with member countries in efforts to achieve greater stability in global oil markets.

The minister’s comments came after he said on Saturday that Iraq had made enough voluntary reductions and would not accept to any more cuts recommended by the larger OPEC+ producing group at its meeting in early June.

“The oil ministry is eager to work with member states to achieve more stability in the global oil market by agreeing on voluntary reduction programmes,” Hayan Abdul Ghani told the state news agency.

Abdul Ghani told reporters on the sidelines of an oil and gas licensing round in Baghdad that OPEC’s voluntary reduction are subject to member agreement, adding that Iraq is an OPEC member and will follow its choices.

“It is necessary that we adhere to and agree with any decisions made by the organization,” he stated.

According to sources familiar with the situation, the OPEC+ group, which includes OPEC, Russia, and other non-OPEC producers, may extend some voluntary output cuts if demand does not improve.

Source: Reuters

 

 

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