June 13, 2024
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OIL & GAS

Chinese Companies Secure Contracts for Iraqi Oil and Gas Exploration

Chinese companies emerged on Saturday as winners in the bidding process for five Iraqi oil and gas fields during a licensing round aimed at enhancing domestic gas production.

The three-day event encompassed 29 projects across central, southern, and western Iraq, including the country’s first offshore exploration block in the Arab Gulf waters.

An Iraqi Kurdish company also secured two projects, reflecting the diverse participation in the licensing round.

Iraq seeks to attract significant investments to bolster its oil and gas sector, with a focus on expanding petrochemicals production and reducing reliance on gas imports from neighboring Iran, crucial for power generation.

While more than 20 companies pre-qualified for the licensing round, notable absentees included U.S. oil majors, despite recent meetings between Iraqi Prime Minister Mohammed Shia and representatives of U.S. oil firms.

Among the winning bids, Zhongman Petroleum and Natural Gas Group (ZPEC) secured contracts for the Eastern Baghdad and Middle Euphrates fields, while China’s United Energy Group Ltd won the bid for the Al-Faw field in southern Basra.

Additionally, ZhenHua and Geo-Jade secured contracts for the Qurnain and Zurbatiya fields, respectively. Iraq’s KAR Group secured contracts for the Dimah field in Maysan province and the Sasan & Alan fields in Nineveh province.

Further projects are available for bidding on Sunday and Monday, with the government aiming to increase oil production to 6 million barrels per day by 2030 and achieve self-sufficiency in natural gas production by eliminating gas flaring.

Iraq, the second-largest oil producer in OPEC, has faced challenges in its oil sector development, including unfavorable contract terms, conflict, and political instability.

The departure of Western oil giants like Exxon Mobil Corp and Royal Dutch Shell Plc from certain projects has coincided with the expansion of Chinese companies’ presence in the Iraqi oil industry.

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