Chinese enterprises emerged as the primary winners in Iraq’s latest energy sector bidding round, a pivotal move as the West Asian country aims to boost its oil and gas reserves and financial inflow. Launched on Saturday, the three-day event showcased 29 oil and gas projects, with 21 auctioned over the weekend. Remarkably, Chinese firms clinched 10 of these, highlighting their growing influence in the region.
Zhongman Petroleum and Natural Gas Group (ZPEC) notably secured development rights for the Northern Extension of East Baghdad oil field, agreeing to a 6.67 percent profit share, lower than the 12.22 percent bid from Iraq’s KAR company. The field, strategically located between Baghdad and Salahuddin provinces, is pivotal for central Iraq’s oil landscape.
Further success for Chinese companies included winning bids for the Middle Euphrates fields and the Fao block in southern Iraq. ZPEC agreed to a reduced profit share of 9.35 percent, despite initially offering 11.67 percent, for the cluster of fields across Najaf and Karbala provinces. Meanwhile, China’s UEG faced no competition for the Fao block, securing a 25.16 percent share of net profit.
Other significant Chinese wins included Zhenhua’s acquisition of the Qurnain block south of Iraq and Geo-Jade’s ventures into the Zurbatiya and Jabal Sanam blocks, with respective profit shares negotiated down to 7.65 percent and 30.9 percent.
While Chinese firms dominated, local Iraqi company KAR managed to secure rights for the Dimah and Sasan fields, underscoring some local success amidst the foreign dominion.
This round of bidding not only underscores China’s pivotal role in Iraq’s energy sector but also marks a shift in regional power dynamics, especially given the notable absence of US companies. As the bidding continues, Iraq remains hopeful for further participation to bolster its energy independence and economic growth.
