Chinese companies have secured bids to explore five Iraqi oil and gas fields, while U.S. firms have been notably absent.
What Happened: The bidding process, which took place on Saturday, saw Chinese companies securing bids for five out of the 29 projects available, reported Reuters. The auction, which spanned three days, encompassed exploration blocks in central, southern, and western Iraq, including an offshore block in the Arab Gulf waters.
The Chinese companies that secured the bids are Zhongman Petroleum and Natural Gas Group (ZPEC), United Energy Group Ltd, ZhenHua, and Geo-Jade. The Iraqi Kurdish company, KAR Group, also secured two projects.
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The Iraqi government aims to attract substantial investments to develop its oil and gas sector, with a focus on increasing local petrochemical production and reducing gas imports from Iran, which are crucial for power generation.
Despite the absence of U.S. firms, the Iraqi government is optimistic that the new projects will increase oil production to 6 million barrels per day by 2030, up from the current 5 million barrels. The government also aims to achieve self-sufficiency in natural gas production, potentially ending gas imports.
Why It Matters: The absence of U.S. oil majors in the bidding process is noteworthy, especially after Iraqi Prime Minister Mohammed Shia met with representatives of U.S. oil firms during an official visit to the United States last month.
This development comes amid a report that the Biden administration is planning to announce new tariffs on China, with a particular focus on strategic sectors including electric vehicles.
China’s increasing involvement in Iraq’s oil and gas sector comes at a time when the country is also seeking to strengthen its relationship with Iran, a key player in the region.
Meanwhile, China’s relationship with other key regional players, such as Iran, has also been under scrutiny. Amid tensions with the U.S., China’s major banks have halted transactions related to Russia due to concerns over U.S. sanctions, forcing Chinese companies to resort to alternative channels for payments.
At the same time, the U.S. has intensified economic pressure on Iran in response to an attack on Israel, further complicating the geopolitical landscape in the region.
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