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Two Decades After Iraq War Began, China Colonizes Iraq’s Oilfields


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A worker is seen at Iraq's Majnoon oilfield near Basra

A worker is seen at Iraq's Majnoon oilfield near Basra, Iraq, March 31, 2021. Picture taken March 31, 2021. REUTERS/Essam Al-Sudani

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  • Iraq persuaded Lukoil to halt sale to Sinopec - sources
  • Baghdad concerned China becoming too dominant - sources
  • Western firms not happy with terms of Iraqi deals

LONDON/BASRA, May 17 (Reuters) - Iraq's oil ministry thwarted three prospective deals last year that would have handed Chinese firms more control over its oilfields and led to an exodus of international oil majors that Baghdad wants to invest in its creaking economy.

Since the start of 2021, plans by Russia's Lukoil (LKOH.MM) and U.S. oil major Exxon Mobil (XOM.N) to sell stakes in major fields to Chinese state-backed firms have hit the buffers after interventions from Iraq's oil ministry, according to Iraqi oil officials and industry executives.

 

Selling a stake to a state-run Chinese company was also one of several options being considered by Britain's BP (BP.L), but officials persuaded it to stay in Iraq for now, people familiar with the matter said.

China is Iraq's top investor and Baghdad was the biggest beneficiary last year of Beijing's Belt and Road initiative, receiving $10.5 billion in financing for infrastructure projects including a power plant and an airport.

 

But when it comes to further Chinese investment in major oilfields, Baghdad has drawn a line in the sand.

Iraq's government and officials at state-run firms are concerned that further consolidation of fields in the hands of Chinese companies could accelerate an exodus of Western oil companies, a total of seven Iraqi oil officials and executives with companies operating in Iraq told Reuters in interviews.

 

Supported by state-run oil company officials, Iraq's Oil Minister Ihsan Abdul Jabbar dissuaded Lukoil last year from selling a stake in one of the country's largest fields, West Qurna 2, to Chinese state firm Sinopec , three people familiar with the matter said.

Iraqi officials also intervened last year to stop Chinese state-backed firms buying Exxon's stake in West Qurna 1 and to persuade BP (BP.L) to stay in Iraq rather than offloading its interest in the giant Rumaila oilfield to a Chinese company, people familiar with the matter said.

Combined, Rumaila and West Qurna produce about half of the crude coming out of Iraq, which sits on the fifth-largest oil reserves in the world.

Iraq's oil ministry did not respond to requests for comment about the deals or the minister's role in any interventions.

The government worried that China's dominance could make Iraq less attractive for investment from elsewhere, two government officials said.

China's strengthening relationship with Iran has helped its position in Iraq due to Tehran's political and military influence there, but the oil ministry is wary of ceding more control over the country's key resources, some officials said.

"We don't want the Iraqi energy sector to be labelled as a China-led energy sector and this attitude is agreed by government and the oil ministry," another Iraqi official said.

RISKY STRATEGY

The interventions over BP, Exxon and Lukoil's positions in Iraq come after British oil major Shell (SHEL.L) decided in 2018 to withdraw from Iraq's vast Majnoon oilfield.

The interventions also mark a shift in stance after Chinese companies won most energy deals and contracts awarded over the past four years. Iraqi oil officials said Chinese firms have accepted lower profit margins than most rivals.

"All the rules regarding tenders were formulated jointly by the Chinese and Iraqi sides and were conducted under transparent and fair principles," said state-owned China National Offshore Oil Corporation (CNOOC) (0883.HK) in an emailed statement.

Pushing back against further Chinese investment is a risky strategy, though, as there's no guarantee others will step up and the government needs billions of dollars to rebuild the economy after the Islamic State insurgency was defeated in 2017.

Over the past decade, oil revenue accounted for 99% of Iraq's exports, 85% of the country's budget and 42% of its gross domestic product, according to the World Bank.

While oil majors jostled to get access to Iraq's vast oilfields after the U.S.-led invasion in 2003, they are increasingly focused on the energy transition and more profitable plays elsewhere. They also want better terms to develop fields, oil executives said.

China is among the biggest buyers of Iraq's crude and Chinese state firms have built up a dominant position in its oil industry.

But when Lukoil notified the government last summer that it was considering selling some of its stake in West Qurna 2 to Sinopec, the oil minister intervened, people familiar with the matter said.

It has not previously been reported that Sinopec was the potential buyer of Lukoil's stake. The Chinese company did not respond to a request for comment.

To encourage Lukoil to stay, Iraq offered a sweetener, a person with direct knowledge said.

A few months after Lukoil signaled it was considering a sale, Baghdad finally approved its plan to develop a field known as Block 10, where the Russian company had discovered an oil reservoir in 2017. Afterwards, Lukoil dropped the idea of selling its stake in West Qurna 2, the source said.

Lukoil did not respond to a request for comment.

BP AND EXXON

Over the past few years BP has also spoken to the government about its options - including leaving Iraq altogether - before settling on spinning off its stake in Rumaila into a standalone company last year, two people familiar with the matter said.

Oil minister Abdul Jabbar led efforts to convince BP not to leave as the government was concerned its partner in the field, China National Petroleum Corporation (CNPC), would buy BP's stake, the people said. Baghdad was also keen to keep such a high-profile international oil major in the country, they said.

BP declined to comment.

When Exxon flagged its intention to leave Iraq in January 2021, meanwhile, U.S. officials told Exxon they were unhappy with the prospect of the biggest U.S. oil major pulling out – for reasons that echoed Iraqi concerns.

State department officials said Exxon's departure could create a vacuum for Chinese companies to fill, a person familiar with the conversations said.

U.S. officials then asked Exxon what it would take to stay in Iraq, the person said, declining to give further details.

A State Department spokesperson said: "We regularly engage with our Iraqi counterparts on fostering an environment conducive to private sector investment."

Exxon had signed an agreement for the sale of its interest in West Qurna 1 to CNOOC and PetroChina (601857.SS), the listed arm of CNPC, people familiar with the matter said.

Neither CNOOC nor CNPC responded to requests for comment about the deals.

Exxon's stake was valued at $350 million to $375 million, said people familiar with the matter.

Iraq has veto power over oilfield deals, however, and did not approve the transaction.

Exxon filed for arbitration with the International Chamber of Commerce against Basra Oil Co., arguing that it had followed the terms of its contract for West Qurna 1 and had a good deal on the table, people familiar with the matter said.

The oil ministry then took the unusual step of trying to broker a deal on Exxon's behalf. The ministry offered Exxon's stake to other Western companies including Chevron Corp (CVX.N).

No one was interested. Rather than let the stake go to the Chinese companies, Baghdad said the state-run Iraq National Oil Company (INOC) would take it instead, though INOC is still in the process of being revived after being defunct for many years.

"(Exxon) will continue to work closely and constructively to reach an equitable resolution," said a spokeswoman.

SERVICE CONTRACTS

Iraq's oil industry is mostly based on technical service contracts between the state-backed Basra Oil Co. and foreign companies that are repaid costs plus a fee per barrel to develop fields, while Iraq retains ownership of the reserves.

Oil majors typically prefer deals that allow a share in profits rather than a set fee.

The priority for Chinese firms, however, is achieving secure oil supplies to feed China's growing economy, rather than returns for investors, said a Chinese oil executive with direct knowledge of CNPC's global investments.

There are some signs, however, that Iraq is attempting to make its terms more appealing.

France's Total Energies (TTEF.PA) signed a $27 billion deal in September that included payment of 40% of revenue from one field. The deal has stalled, however, due to disputes over terms and it still needs approval from some Iraqi government agencies, Reuters reported in February. read more

Total Energies said it was fully committed to the project.

One oil company executive said they were skeptical Iraq would introduce more attractive terms. But unless they improve significantly, analysts say it is hard to imagine Iraq will be able to stem the exodus as the energy transition accelerates.

"Many of the energy majors are looking at the carbon emissions, their ability to generate cash flows if commodity prices are low, and they're looking at improving returns," said Ian Thom, research director at consultancy Wood Mackenzie.

"As the priorities of the energy companies are changing, the relative attractiveness of Iraq is changing."

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  • Time: 05/18/2022 07:44:28
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The Iraqi government thwarts plans to sell oil stakes to China and dominate it
 

2020 01 09T115720Z 1702908623 RC2BCE9WXMIP RTRMADP 3 IRAQ SECURITY OIL

 

2021 05 03T000000Z 1416958211 RC2C8N9J9XPN RTRMADP 3 IRAQ OIL

 

2019 06 17T121757Z 1044271828 RC1AED5EEBA0 RTRMADP 3 IRAQ OIL EXXON MOBIL

 

2019 06 01T103213Z 18724233 RC1236EABE00 RTRMADP 3 USA IRAN IRAQ EXXON

  
{Economic: Al Furat News} The Iraqi Oil Ministry thwarted three potential deals last year that would have given Chinese companies more control over Iraq's oil fields, and lead to the displacement of major international oil companies that Baghdad wants them to invest in its faltering economy, according to a Reuters report.

Since the beginning of 2021, Russia's Lukoil (LKOH. MM) and major US oil company ExxonMobil (XOM.N) have planned to sell stakes in key fields to Chinese state-backed companies, the agency said, citing Iraqi oil officials and industry executives.

The agency quoted people it described as familiar with the matter as saying that selling a stake to a Chinese state-run company was also one of several options being studied by British Petroleum, but officials persuaded it to stay in Iraq for the time being.

China is the largest investor in Iraq, and Baghdad was the biggest beneficiary last year of the Belt and Road Initiative launched by Beijing, which received $10.5 billion in financing for infrastructure projects including a power plant and an airport.

However, Reuters says, the Iraqi government and officials in state-run companies are concerned that more fields in the hands of Chinese companies may accelerate the exodus of Western oil companies, a total of seven Iraqi oil officials and executives of companies operating in Iraq told Reuters in interviews. .

Backed by officials of the state-run oil company, Iraq's Oil Minister Ihsan Abdul-Jabbar prevented Lukoil from selling a stake in one of the country's largest fields, West Qurna 2, last year to China's state-run Sinopec, three people familiar with the matter said. command.

People familiar with the matter said that Iraqi officials also intervened last year to prevent Chinese state-backed companies from buying Exxon's stake in West Qurna 1 and to persuade BP to stay in Iraq instead of transferring its stake in the giant Rumaila oil field to a Chinese company.

Rumaila and West Qurna together produce about half of the crude coming from Iraq, which has the fifth largest oil reserves in the world.

The Iraqi Oil Ministry did not respond to Reuters requests for comment on the deals or the minister's role in any interventions, according to the agency.

Two government officials told Reuters the government was concerned that China's dominance could make Iraq less attractive for investment than elsewhere.

Some officials said China's strengthening relationship with Iran has helped its position in Iraq due to Tehran's political and military influence there, but the Oil Ministry is wary of ceding more control over the country's key resources.

Another Iraqi official said, "We do not want the Iraqi energy sector to be described as an energy sector led by China, and this position is agreed upon between the government and the Ministry of Oil."

The interventions over the BP, Exxon and Lukoil sites in Iraq come after British oil major Shell (SHEL. L)8 decided to withdraw from Iraq's vast Majnoon oil field in 2018.

The interventions also represent a turnaround after Chinese companies won the most energy deals and contracts awarded over the past four years.

Iraqi oil officials said the Chinese companies had accepted lower profit margins than most competitors.

It quoted a statement from the state-owned China National Offshore Oil Corporation that "all the rules related to tenders were jointly formulated by the Chinese and Iraqi sides and conducted under transparent and fair principles."

However, giving more Chinese investment is a risky strategy, says Reuters, and the government needs billions of dollars to rebuild the economy after the defeat of ISIS in 2017.

Over the past decade, oil revenues have accounted for 99 percent of Iraq's exports, 85 percent of the country's budget, and 42 percent of its gross domestic product, according to the World Bank.

As oil majors scrambled to gain access to Iraq's vast oil fields after the US-led military intervention in Iraq in 2003, they are increasingly focusing on energy transitions and better terms for developing the fields, oil executives said.

China is among the largest buyers of Iraqi crude oil, and Chinese state companies have built a dominant position in the oil industry.

But when Lukoil notified the government last summer that it was considering selling some of its stake in West Qurna 2 to Sinopec, the oil minister stepped in, people familiar with the matter said.

It was not previously mentioned that Sinopec was the potential buyer of Lukoil's stake. The Chinese company did not respond to a request for comment.

To encourage Lukoil to stay, Baghdad finally agreed to its plan to develop a field known as Block 10, where the Russian company discovered oil reserves in 2017.

After that, Lukoil abandoned the idea of selling its stake in West Qurna 2, according to the source.

Lukoil did not respond to a Reuters request for comment.

BB and Exxon

Over the past few years, BP has also spoken to the government about its options - including leaving Iraq entirely - before settling on converting its Rumaila stake to an independent company last year, two people familiar with the matter said.

Representatives of the sources said that Oil Minister Abdul-Jabbar led efforts to persuade BP not to leave because the government was concerned that its partner in the field, China National Petroleum Corporation, would buy BP's stake. They said Baghdad is also keen to keep such a leading international oil company in the country.

BP declined to comment to the agency.

And when Exxon indicated its intention to leave Iraq in January 2021, US officials said they were unhappy with the prospect of withdrawing the largest US oil company — for reasons similar to Iraqi concerns.

US State Department officials said Exxon's departure could create a vacuum for Chinese companies to fill, a person familiar with the talks told Reuters.

US officials then asked Exxon what it would take to stay in Iraq, the person said, declining to give further details.

"We regularly engage with our Iraqi counterparts in promoting an enabling environment for private sector investment," a State Department spokesman said.

Iraq has a veto over oil field deals and has not agreed to this deal.

Exxon has applied for arbitration with the International Chamber of Commerce against the Basra Oil Company, arguing that it followed the terms of the contract for West Qurna 1 and had a good deal on the table, people familiar with the matter said.

The Oil Ministry took the unusual step of trying to broker the deal on behalf of Exxon, and the ministry offered Exxon's stake to other Western companies including Chevron Corp. (CVX.N).

Rather than letting the stake go to Chinese companies, Baghdad said the state-run Iraq National Oil Company would take it instead, even though the Iraq National Oil Company is still in the process of reviving after its hiatus for many years.

"(Exxon) will continue to work closely and constructively to find a just solution," a company spokeswoman said.

Iraq's oil industry relies mostly on technical service contracts between the state-backed Basra Oil Company and foreign companies that are paid for in addition to fees per barrel to develop the fields, while Iraq retains ownership of the reserves.

The major oil companies usually prefer deals that allow a share in the profits rather than a set fee.

However, the priority for Chinese companies is to achieve safe oil supplies to fuel the growing Chinese economy, rather than generating returns for investors, said a Chinese oil executive with direct knowledge of CNPC's global investments.

Reuters says that there is some indication that Iraq is trying to make its terms more attractive to companies.

It quoted analysts as saying that unless Iraq's conditions improve significantly, it is difficult to imagine that Iraq will be able to stop the exodus of companies with a change in the global trend towards carbon emissions.

And the agency quotes Ian Thom, director of research at consultancy Wood Mackenzie, as saying that "many major energy companies are looking at carbon emissions, their ability to generate cash flows if commodity prices are low, and are looking to improve returns," adding, "With the changing priorities of energy companies, The relative attractiveness of Iraq is changing.

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Reuters: Iraq is concerned about the Chinese encroachment in its oil fields
 

  

Baghdad - people  

The Iraqi Oil Ministry thwarted three potential deals last year that would have given Chinese companies more control over Iraq's oil fields, and lead to the displacement of major international oil companies that Baghdad wants them to invest in its faltering economy, according to a Reuters report.  

 

  

  

Since the beginning of 2021, Russia's Lukoil (LKOH. MM) and major US oil company ExxonMobil (XOM.N) have planned to sell stakes in key fields to Chinese state-backed companies, the agency said, citing Iraqi oil officials and industry executives.  

  

The agency quoted people it described as familiar with the matter as saying that selling a stake to a Chinese state-run company was also one of several options being studied by British Petroleum, but officials persuaded it to stay in Iraq for the time being.  

  

Reuters says the Iraqi government and officials in state-run companies are concerned that more fields in the hands of Chinese companies may accelerate the exodus of Western oil companies, a total of seven Iraqi oil officials and executives of companies operating in Iraq told Reuters in interviews.  

Backed by officials of the state-run oil company, Iraq's Oil Minister Ihsan Abdul-Jabbar prevented Lukoil from selling a stake in one of the country's largest fields, West Qurna 2, last year to China's state-run Sinopec, three people familiar with the matter said. command.  

  

People familiar with the matter said that Iraqi officials also intervened last year to prevent Chinese state-backed companies from buying Exxon's stake in West Qurna 1 and to persuade BP to stay in Iraq instead of transferring its stake in the giant Rumaila oil field to a Chinese company.  

  

Rumaila and West Qurna together produce about half of the crude coming from Iraq, which has the fifth largest oil reserves in the world.  

  

The Iraqi Oil Ministry did not respond to Reuters requests for comment on the deals or the minister's role in any interventions, according to the agency.  

  

Two government officials told Reuters the government was concerned that China's dominance could make Iraq less attractive for investment than elsewhere.  

  

Some officials said China's strengthening relationship with Iran has helped its position in Iraq due to Tehran's political and military influence there, but the Oil Ministry is wary of ceding more control over the country's key resources.  

  

Another Iraqi official said, "We do not want the Iraqi energy sector to be described as an energy sector led by China, and this position is agreed upon between the government and the Ministry of Oil."  

  

The interventions over the BP, Exxon and Lukoil sites in Iraq come after British oil major Shell (SHEL. L)8 decided to withdraw from Iraq's vast Majnoon oil field in 2018.  

  

The interventions also represent a turnaround after Chinese companies won the most energy deals and contracts awarded over the past four years.  

  

Iraqi oil officials said the Chinese companies had accepted lower profit margins than most competitors.  

  

It quoted a statement from the state-owned China National Offshore Oil Corporation that "all the rules related to tenders were jointly formulated by the Chinese and Iraqi sides and conducted under transparent and fair principles."  

  

However, giving more Chinese investment is a risky strategy, says Reuters, and the government needs billions of dollars to rebuild the economy after the defeat of ISIS in 2017.  

  

Over the past decade, oil revenues have accounted for 99 percent of Iraq's exports, 85 percent of the country's budget, and 42 percent of its gross domestic product, according to the World Bank.  

  

As oil majors scrambled to gain access to Iraq's vast oil fields after the US-led military intervention in Iraq in 2003, they are increasingly focusing on energy transitions and better terms for developing the fields, oil executives said.  

  

China is among the largest buyers of Iraqi crude oil, and Chinese state companies have built a dominant position in the oil industry.  

  

But when Lukoil notified the government last summer that it was considering selling some of its stake in West Qurna 2 to Sinopec, the oil minister stepped in, people familiar with the matter said.  

  

It was not previously mentioned that Sinopec was the potential buyer of Lukoil's stake. The Chinese company did not respond to a request for comment.  

  

To encourage Lukoil to stay, Baghdad finally agreed to its plan to develop a field known as Block 10, where the Russian company discovered oil reserves in 2017.  

  

After that, Lukoil abandoned the idea of selling its stake in West Qurna 2, according to the source.  

  

Lukoil did not respond to a Reuters request for comment.  

  

BB and Exxon  

Over the past few years, BP has also spoken to the government about its options - including leaving Iraq entirely - before settling on converting its Rumaila stake to an independent company last year, two people familiar with the matter said.  

  

Representatives of the sources said that Oil Minister Abdul-Jabbar led efforts to persuade BP not to leave because the government was concerned that its partner in the field, China National Petroleum Corporation, would buy BP's stake. They said Baghdad is also keen to keep such a leading international oil company in the country.  

BP declined to comment to the agency.  

  

And when Exxon indicated its intention to leave Iraq in January 2021, US officials said they were unhappy with the prospect of withdrawing the largest US oil company — for reasons similar to Iraqi concerns.  

  

US State Department officials said Exxon's departure could create a vacuum for Chinese companies to fill, a person familiar with the talks told Reuters.  

  

US officials then asked Exxon what it would take to stay in Iraq, the person said, declining to give further details.  

  

"We regularly engage with our Iraqi counterparts in promoting an enabling environment for private sector investment," a State Department spokesman said.  

  

Iraq has a veto over oil field deals and has not agreed to this deal.  

  

Exxon has applied for arbitration with the International Chamber of Commerce against the Basra Oil Company, arguing that it followed the terms of the contract for West Qurna 1 and had a good deal on the table, people familiar with the matter said.  

  

The Oil Ministry took the unusual step of trying to broker the deal on behalf of Exxon, and the ministry offered Exxon's stake to other Western companies including Chevron Corp. (CVX.N).  

  

Rather than letting the stake go to Chinese companies, Baghdad said the state-run Iraq National Oil Company would take it instead, even though the Iraq National Oil Company is still in the process of reviving after its hiatus for many years.  

  

"(Exxon) will continue to work closely and constructively to find a just solution," a company spokeswoman said.  

  

Iraq's oil industry relies mostly on technical service contracts between the state-backed Basra Oil Company and foreign companies that are paid for in addition to fees per barrel to develop the fields, while Iraq retains ownership of the reserves.  

  

The major oil companies usually prefer deals that allow a share in the profits rather than a set fee.  

  

However, the priority for Chinese companies is to achieve safe oil supplies to fuel the growing Chinese economy, rather than generating returns for investors, said a Chinese oil executive with direct knowledge of CNPC's global investments.  

  

Reuters says that there is some indication that Iraq is trying to make its terms more attractive to companies.  

  

It quoted analysts as saying that unless Iraq's conditions improve significantly, it is difficult to imagine that Iraq will be able to stop the exodus of companies with a change in the global trend towards carbon emissions.  

  

And the agency quotes Ian Thom, director of research at consultancy Wood Mackenzie, as saying that "many major energy companies are looking at carbon emissions, their ability to generate cash flows if commodity prices are low, and are looking to improve returns," adding, "With the changing priorities of energy companies, The relative attractiveness of Iraq is changing.  

 
"Reuters"
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Two Decades After Iraq War Began, China Colonizes Iraq’s Oilfields

FILE - In this Jan. 24, 2004 file photo, fires flare off the gas from crude oil at Iraq's oldest oil processing plant in the northern Iraqi town of Baba Gurgur, outside of Kirkuk, Iraq's Oil Ministry says Iraq has resumed exports from its oil fields around Kirkuk, one year …

Twenty years after the United States invested blood and treasure in liberating Iraq from the rule of Saddam Hussein, China is attempting to lock up control of Iraq’s oilfields.

The Western intervention in Iraq was denounced by critics as a “war for oil,” but in the end, the great authoritarian menace of the 21st Century is close to taking control of Iraq’s energy resources.

Reuters reported on Tuesday that Iraq’s oil ministry has repelled three attempts by Chinese firms to gain control of the country’s petroleum resources. If China had succeeded, it might well have triggered an “exodus of international oil majors” that would leave Iraq open to a more extensive takeover by Beijing:

Since the start of 2021, plans by Russia’s Lukoil (LKOH.MM) and U.S. oil major Exxon Mobil (XOM.N) to sell stakes in major fields to Chinese state-backed firms have hit the buffers after interventions from Iraq’s oil ministry, according to Iraqi oil officials and industry executives.

Selling a stake to a state-run Chinese company was also one of several options being considered by Britain’s BP (BP.L), but officials persuaded it to stay in Iraq for now, people familiar with the matter said.

China is Iraq’s top investor and Baghdad was the biggest beneficiary last year of Beijing’s Belt and Road initiative, receiving $10.5 billion in financing for infrastructure projects including a power plant and an airport.

For the rest of the article: https://www.breitbart.com/asia/2022/05/17/two-decades-after-iraq-war-began-china-colonizes-iraqs-oilfields/

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1 hour ago, bigwave said:

Two Decades After Iraq War Began, China Colonizes Iraq’s Oilfields

FILE - In this Jan. 24, 2004 file photo, fires flare off the gas from crude oil at Iraq's oldest oil processing plant in the northern Iraqi town of Baba Gurgur, outside of Kirkuk, Iraq's Oil Ministry says Iraq has resumed exports from its oil fields around Kirkuk, one year …

Twenty years after the United States invested blood and treasure in liberating Iraq from the rule of Saddam Hussein, China is attempting to lock up control of Iraq’s oilfields.

The Western intervention in Iraq was denounced by critics as a “war for oil,” but in the end, the great authoritarian menace of the 21st Century is close to taking control of Iraq’s energy resources.

Reuters reported on Tuesday that Iraq’s oil ministry has repelled three attempts by Chinese firms to gain control of the country’s petroleum resources. If China had succeeded, it might well have triggered an “exodus of international oil majors” that would leave Iraq open to a more extensive takeover by Beijing:

Since the start of 2021, plans by Russia’s Lukoil (LKOH.MM) and U.S. oil major Exxon Mobil (XOM.N) to sell stakes in major fields to Chinese state-backed firms have hit the buffers after interventions from Iraq’s oil ministry, according to Iraqi oil officials and industry executives.

Selling a stake to a state-run Chinese company was also one of several options being considered by Britain’s BP (BP.L), but officials persuaded it to stay in Iraq for now, people familiar with the matter said.

China is Iraq’s top investor and Baghdad was the biggest beneficiary last year of Beijing’s Belt and Road initiative, receiving $10.5 billion in financing for infrastructure projects including a power plant and an airport.

For the rest of the article: https://www.breitbart.com/asia/2022/05/17/two-decades-after-iraq-war-began-china-colonizes-iraqs-oilfields/

Two decades? Should read Three decades.. weird..

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1 hour ago, bigwave said:

Two Decades After Iraq War Began, China Colonizes Iraq’s Oilfields

FILE - In this Jan. 24, 2004 file photo, fires flare off the gas from crude oil at Iraq's oldest oil processing plant in the northern Iraqi town of Baba Gurgur, outside of Kirkuk, Iraq's Oil Ministry says Iraq has resumed exports from its oil fields around Kirkuk, one year …

Twenty years after the United States invested blood and treasure in liberating Iraq from the rule of Saddam Hussein, China is attempting to lock up control of Iraq’s oilfields.

The Western intervention in Iraq was denounced by critics as a “war for oil,” but in the end, the great authoritarian menace of the 21st Century is close to taking control of Iraq’s energy resources.

Reuters reported on Tuesday that Iraq’s oil ministry has repelled three attempts by Chinese firms to gain control of the country’s petroleum resources. If China had succeeded, it might well have triggered an “exodus of international oil majors” that would leave Iraq open to a more extensive takeover by Beijing:

Since the start of 2021, plans by Russia’s Lukoil (LKOH.MM) and U.S. oil major Exxon Mobil (XOM.N) to sell stakes in major fields to Chinese state-backed firms have hit the buffers after interventions from Iraq’s oil ministry, according to Iraqi oil officials and industry executives.

Selling a stake to a state-run Chinese company was also one of several options being considered by Britain’s BP (BP.L), but officials persuaded it to stay in Iraq for now, people familiar with the matter said.

China is Iraq’s top investor and Baghdad was the biggest beneficiary last year of Beijing’s Belt and Road initiative, receiving $10.5 billion in financing for infrastructure projects including a power plant and an airport.

For the rest of the article: https://www.breitbart.com/asia/2022/05/17/two-decades-after-iraq-war-began-china-colonizes-iraqs-oilfields/

Nvrmnd. 

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 2022-05-19 09:23
 

Shafaq News/ The Iraqi Drilling Company signed a contract with the Chinese company COSL to carry out the work associated with drilling 22 oil wells in the Maysan fields.

The contract signing ceremony took place at the company's headquarters in Barjisiya, according to a statement issued by the drilling company today, Thursday.

The statement quoted the Director General of the Iraqi Drilling Company, Basem Abdul Karim Nasser, as saying, "This contract is in support of the contract concluded by our company with the Chinese company CNOOC to drill 22 oil wells in the Maysan fields in a turnkey manner and for a period of no more than two years. Iraqi Drilling has allocated two devices with 2000 HP to fulfill this contract.

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Nowadays, China is trying to support its plan in the One Belt, One Road project or the so-called “New Silk Road” by not interfering with geopolitical tensions.

Supporting some countries that constitute a cornerstone in this path militarily, culturally and investment, particularly in the field of energy.

Among the most important of these countries that support it is Iraq, which is considered a key region in the export of oil, as 90% of the revenues of Iraqi imports come from crude oil.

On the other hand, China excels in many fields of technology and infrastructure development , especially that Chinese state-owned companies are the largest investors of oil in Iraq, whether in modernizing or developing infrastructure in this industry even during the extended period of the war and beyond.

After imposing sanctions on Iran, China is seeking today to cover the shortage of oil imports by searching for oil-exporting countries, in a move that would constitute a severe blow to the Iranian oil sector, as the two Chinese oil companies were buying nearly 600,000 barrels per day of Iranian production.

On the other hand, Iraqi oil exports to China increased from zero in 2007 to 270 million barrels annually by 2017, ranking second after Saudi Arabia in the Middle East, where Iraqi oil exports represent about 8.8% of the total Chinese oil imports.

And China found in “loan diplomacy” the best way to expand its influence, adopting the “carrot and stick” method, whereby countries are tempted to engage in the distinguished project of Chinese foreign policy, which is known with the participation of 138 countries and 30 international organizations, with a colossal value of up to eight trillion dollars, before For the governments of these countries to sink into the debt quagmire, by granting them billions of dollars in loans on special terms, they are well aware that many countries will not be able to pay the debts nor their interests, only to find themselves a victim of a “debt trap.”
The term “debt trap diplomacy” is attributed to Brahma Chellani, the Indian thinker and academic, and he used it in his criticism of the Chinese government’s policy, which gives huge loans to countries, but in return seizes their strategic assets, as collateral for loans in the event of default, when speaking about the dragon strategy. The Chinese aim to exploit resources in the Third World, conquer local markets with low-quality Chinese goods, and even labor to compete for local jobs.

And the story of the “debt trap” was revealed in 2017, when a report spread confirming China’s clever takeover of the port of Hambantota city in Sri Lanka, after the state government was late in paying its debts, and Sri Lanka found itself paid, under the terms of the contract, about the privatization of 70 percent of the debt. China-funded port of a Chinese company.

And China intends to seize the projects that it has financed, which are ports, airports or strategic infrastructure, or at least take the right to use them for a long period, sometimes up to 99 years.

Chinese companies have been working in Iraq for years that may exceed a decade, and they focus a lot on projects related to oil and its derivatives or logistics services related to oil extraction operations in the regions of southern Iraq rich in natural resources.

But these companies, which have annual investments in the billions of dollars, are almost absent from oversight and from the eyes of the Iraqi, Arab and even international media, so they seem to be discreet companies that do not practice corruption.

According to informed sources, "Iraq lost millions of dollars due to the corruption of Chinese companies, which took advantage of the country's conditions and sought refuge with political parties that have great influence in Iraq and were able to evade taxes."

According to the sources, "these companies follow the mechanisms of dispatching officials and employees who have ties to their work to China and to Europe, in order to offer them temptations to cover up the corruption operations they carry out during their work in Iraq."

The deputy in the Iraqi parliament said during a television interview, "In Wasit Governorate, for example, we have 3 experiences with Chinese companies, which are among the worst applications on the ground, adding that the problem is corruption that hinders all steps of reconstruction."

In addition, the work of these companies is not limited to oil fields only. Earlier, they entered the file of armament contracts, but this file was also marred by corruption, according to the parliamentarian, who revealed in 2016 violations and suspicions of corruption in an armament deal with a Chinese company, and confirmed Other companies submitted bids with this company and were removed.

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  • 2 weeks later...
 
 2022-05-30 08:36
 

 

Shafaq News/ Oil expert Hamza Al-Jawahiri confirmed, on Monday, that the fear of Chinese domination of the Iraqi oil industry pushed him towards Western companies, indicating that Western oil companies are reluctant to contract on projects due to financial corruption.

 

Al-Jawahiri told Shafak News Agency, "Chinese technology is equivalent to what is available in Western companies, and these companies and laboratories in the West have transferred their factories to China, and so is the case with technology, and that China themselves developed the technology and there is no objection to Chinese technology."

 

He added, "The objection comes to the Chinese domination of the Iraqi oil industry, which is what Iraq fears. Therefore, it seeks to find Western and Eastern diversity in direct national production."

 

And Al-Jawahiri said that "Iraq refuses to have a hegemony of one party at the expense of another, and it seeks to find a balance between the West and the East."

 

He stressed that "hegemony is rejected, as your decision will depend on the interest of this state, especially since we are talking about major development projects whose costs range from 6 to 12 billion dollars and more, and these decisions affect sovereignty and therefore countries avoid placing their eggs in one basket."

 

He pointed out that "contracting projects, whether investment or service, is open to all, and China is present in every competitive process."

 

Al-Jawahiri added, "Western companies are reticent about obtaining projects in Iraq because of financial corruption because they are held accountable in their countries if they are involved in paying bribes and are included in the blacklist, unlike Chinese or eastern companies in general with the exception of Japanese companies, and therefore they get great opportunities in Iraq."

 

The Iraqi Oil Minister, Ihsan Abdul-Jabbar, during his recent visit to France, had called on French oil companies specialized in reconstruction to contribute to projects to escalate production capacities, rehabilitate infrastructure, optimize gas and renewable energy investment, and improve the oil working conditions and environment.

 

Abdul-Jabbar told Shafak News Agency; "Real investment that produces real value for the country, develops society and people, and raises the level of work ethics, is what Western companies do."

 

He added that "other companies are good at work, but they do not meet all these requirements," noting that "the ministry is trying to come up with the best companies capable of creating a social environment and good work and implement projects at the cheapest prices and the highest return."

 

A number of Western companies, including Exxon Mobil, had hinted at selling their stakes in the main oil fields in Iraq, and this step raised the fear of the Iraqi government and the Ministry of Oil in light of measures that may negatively affect Iraqi oil production, while the Minister of Oil demanded the necessity of contracting with one of the American companies in the event of an exit. Any American company from the Iraqi oil fields.

 

On July 4, when he was hosted by the House of Representatives, Oil Minister Ihsan Abdul-Jabbar described this step by companies that demanded to sell their shares, such as Lukoil and ExxonMobil, that the investment climate is not attractive in Iraq.

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