China is preparing to complete a “lifelong oil deal” in Iraq
China recently eased quarantine measures in Wuhan, from which the new Corona epidemic was launched, with the closure lifted completely on April 8.
With President Xi Jinping visiting the city over the past few days, the industrial economy across China has returned to work, although the service sector is still cautious, Oil Price reported in an article.
As for the oil sector, this means that China will return to work from where it left off, and resume its activities to explore and develop new opportunities.
There is no clearer indication of that, from last week’s China move, to award an engineering contract worth $ 203.5 million to the giant Majnoon oil field in Iraq’s Basra, to the unknown Chinese Petroleum and Construction Engineering Company (CPECC).
The Oil Price website notes in the article that China is racing against time to complete what has been called a “lifelong oil deal” with Iraq.
With the United States preoccupied with fighting Corona, Beijing has a good reason to believe that it is open to it in Iraq, according to the article.
In particular, this means continuing to develop opportunities for oil and gas fields in geopolitical areas, such as Iraq, on the basis of renewed contracts for specific work implemented by companies outside the US radar such as the China Petroleum Engineering and Construction Company.
This method is also adopted by Russia, and the focus in it now is on Iraq and Iran, the two countries that are located in the middle of the Middle East and are essential to China’s multi-generational strategy of “one belt, one road”, and Russia’s continuous attempt to confiscate the entire Middle East.
And before the United States realized that China was working covertly with Russia to save money, Iraqi politicians offered China a tremendously profitable deal to develop Majnoon, according to the article.
Specifically, the terms of the deal stipulate that China will obtain a 25-year contract, which will enter into force two years after the date of signature.
This would allow China, according to the article, to generate more profits on average annually and less upfront investment.
At the end of 2017, Iraq began taking over the management of the Majnoon field from the Dutch-British Shell Company, which decided to withdraw from it by mutual consent. The handover process ended in March 2018.
The state-run Basra Oil Company assumed operations in the field after the withdrawal of Shell, which Baghdad chose in 2009 to develop the field, which has an estimated reserve of 12.58 billion barrels.
Iraq announced plans to increase production in the Majnoon field to 450,000 bpd in 2021. Source