🍎 🍕 Less apples, more pizza 🤔 Have you seen Buffett’s portfolio recently?Explore for Free

Chinese companies win licensing bids to explore Iraq oil and gas fields

Published 05/11/2024, 01:09 PM
Updated 05/11/2024, 01:10 PM
© Reuters. FILE PHOTO: Iraqi Prime Minister Mohammed Shia al-Sudani attends the fifth plus and sixth licensing rounds for 29 oil and gas exploration blocks at the Oil Ministry's headquarters in Baghdad, Iraq, May 11, 2024. REUTERS/Thaier Al-Sudani/File Photo
XOM
-
NG
-
SHEL
-

By Moayed Kenany, Timour Azhari and Adam Makary

BAGHDAD (Reuters) -Chinese companies won bids to explore five Iraqi oil and gas fields on Saturday in a licensing round for hydrocarbon exploration that was primarily aimed at ramping up gas production for domestic use.

An Iraqi Kurdish company also took two of the 29 projects up for grabs in the three-day licensing round across central, southern and western Iraq, which for the first time includes an offshore exploration block in the country's Arab Gulf waters.

Iraq aims to lure billions of dollars of investments to develop its oil and gas sector as it looks to ramp up local petrochemicals production and end imports of gas from neighbouring Iran that are currently key to producing power.

More than 20 companies pre-qualified for the licensing round, including European, Chinese, Arab and Iraqi groups.

There were notably no U.S. oil majors involved, even after Iraqi Prime Minister Mohammed Shia met with representatives of U.S. oil firms during an official visit to the United States last month.

Five bids were won on Saturday by Chinese companies.

Zhongman Petroleum and Natural Gas Group (ZPEC) took the northern extension of the Eastern Baghdad field, in Baghdad, and the Middle Euphrates field that straddles the southern Najaf and Karbala provinces, the oil ministry said.

China's United Energy Group Ltd won a bid to develop the Al-Faw field in southern Basra, while ZhenHua won a bid to develop Iraq's Qurnain field in the Iraqi-Saudi border region and Geo-Jade won a bid to develop Iraq's Zurbatiya field in the Wasit.

Two oil and gas fields were taken by Iraq's KAR Group - the Dimah field in eastern Maysan province, and the Sasan & Alan fields in Iraq's northwestern Nineveh province - the ministry said.

Around 20 more projects are open for bidding on Sunday and Monday.

Falah Al-amri, the Iraqi prime minister's advisor for oil and gas issues, said the government hoped the new projects would raise oil production to 6 million barrels per day by 2030 from around 5 million now.

The government also wants the projects to produce enough natural gas so that, along with plans to all-but eliminate gas flaring by 2030, Iraq could end imports.

"Its too early to talk about (gas) exports. We want to get self-sufficient," Al-amri told Reuters.

Iraq, OPEC's second-largest oil producer after Saudi Arabia, at one time had targeted becoming a rival to the Gulf Arab kingdom with output of over a tenth of global demand.

But its oil sector development has been hampered by contract terms viewed as unfavourable by many major oil companies as well as recurring conflict and political paralysis.

© Reuters. FILE PHOTO: Iraqi Prime Minister Mohammed Shia al-Sudani attends the fifth plus and sixth licensing rounds for 29 oil and gas exploration blocks at the Oil Ministry's headquarters in Baghdad, Iraq, May 11, 2024. REUTERS/Thaier Al-Sudani/File Photo

Growing investor focus in recent years on environmental, social and governance criteria have also had an effect.

Western oil giants such as Exxon Mobil Corp (NYSE:XOM) and Royal Dutch Shell (LON:SHEL) Plc have departed from a number of projects in Iraq while Chinese companies have steadily expanded their footprint.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.