China's conquest of Iraqi oil
Little by little and contract by contract, China is increasingly present in the Iraqi oil industry. The latest concession made by the National Engineering and Construction Company was worth $203.5 million to treat sour gas at the Majnoon oil field, Reuters reported on Tuesday. The project is expected to last up to 29 months, according to a statement from the group, and to generate a daily capacity of 4.39 million cubic meters. The Majnoon oil field, operated by state-owned Basra Oil Co, now produces around 240,000 barrels per day and plans to increase production to 450,000 by 2021.
In spite of the strong presence of the United States in the country due to the 2003 invasion and all the aid they have received from this nation for reconstruction, the Asian giant is taking advantage of the precarious situation of the country to take control of the hydrocarbons that it lacks in its territory. Thus, both Washington and Beijing are competing for influence in Baghdad and to gain control over giant oil fields, such as Qurna-1, which is only 50 kilometres from the oil centre of Basrah.
Already last year, a Chinese company and an Iraqi company signed a $1.07 billion deal to process about 300 million cubic feet of gas from the Halfaya oil field in southern Iraq, the state-run Xinhua news agency reported at the time. Iraqi Oil Minister Thamir al-Ghadhban said at the ceremony that "the project signed between PetroChina and CPECC is one of the most important and strategic projects to develop the gas industry in Iraq”.
"We have many companies working in cooperation with the Iraqi Oil Ministry," he said, adding that "cooperation in the field of oil and energy is an important part of the cooperation between the two countries, because China is the largest importer of Iraqi oil. Liu Haijun, president of the Engineering and Construction Company, said that one of China's priorities is to provide employment opportunities for Iraqis in the project, as well as the transfer of modern technology to the Middle Eastern country.
China has become the de facto main importer of Iraqi oil and currently buys half of the black gold being extracted, according to Sputnik. In addition, almost all the major Chinese companies are working in the Iraqi fields. The key to this peaceful "conquest" of Iraqi resources has been that China has not wanted to intervene in Iraqi internal affairs, unlike the United States, according to the director of the National Institute for the Development of Modern Ideology, Igor Shatrov, in statements to the aforementioned Russian publication.
"China is only engaged in oil issues and does not try to take advantage of the discrepancies between Iraq and Iraqi Kurdistan," Shatróv says. China is not concerned about taking over the Kurdistan oil fields and that is why its penetration into the rest of the territory is proving so easy. "This is the same strategy followed in Africa and elsewhere in the Middle East. We are investing and cooperating with countries in exchange for resources," she says.
However, it should be noted that one of the problems China is facing in working in Iraq is the deterioration of security. "Companies with Chinese capital have found it difficult to operate in some parts of the territory and some contracts that had been closed earlier between the two countries have not been honoured because of the power void," said Sputnik Ji Kaiyun, head of the Iraqi Research Centre at Southwest China University. This expert also says that Beijing has relieved Baghdad of some of its debts and deferred payments.
