Iraq to sign deal with Chinese firm to develop eastern Baghdad oilfield
ERBIL (Kurdistan 24) – Iraq is expected to sign a contract with a Chinese oil firm for the development of a field east of the capital of Baghdad, a spokesperson from the Oil Ministry said on Tuesday.
According to spokesperson Assem Jihad, Iraq will sign a deal with China’s ZhenHua Oil to develop the southern part of the Eastern Baghdad oilfield.
Jihad said the contract would increase production at the field to nearly 40,000 barrels of oil per day (bpd) within the next five years.
“[ZhenHua Oil] will also establish a residential compound annexed to the field and will commit to relying on Iraqi workers to a great extent,” he said, adding both sides had signed a preliminary agreement on the project in late 2017.
A rushed bidding process last month for its untapped oil and gas resources to foreign developers is believed to have cost Iraq potentially large oil deals.
The date to receive bids from investors abroad was moved from late June to April to squeeze the bidding process in before the parliamentary elections on May 12.
Since 2009, Iraq has opened its energy and gas resources to international companies. Previous bidding rounds have lasted months. Conferences, road shows, and discussions with the firms interested were held before contracts were issued.
However, in 2018, the short duration left many companies little to no time to study the contracts which had been offered to them. As a result, only nine companies out of the 26 pre-qualified firms participated in the bidding.
A UAE energy company and two firms from China, including ZhenHua Oil, were the only winners in an unusually rushed bidding round for about a dozen hydrocarbon-rich areas.
Notable oil giants which pulled out included Exxon Mobil, Royal Dutch Shell, the United Kingdom’s BP, China’s CNPC, and Russia’s Lukoil.
Iraq is OPEC’s second-largest producer, behind Saudi Arabia, with a daily production of nearly 4.36 million barrels of oil per day from Baghdad-controlled oil fields.
