China expanding dominance in Iraqi oil industry

Chinese firms already produce over half Iraq’s total daily oil output.

That dominance will expand significantly if China National Petroleum Corporation (CNPC) through its Hong Kong-listed subsidiary, PetroChina, succeeds in buying out ExxonMobil’s position in the West Qurna 1 field that has reserves worth US$50 billion. A stake in West Qurna 2 and a nearby field could also go to the Chinese.

Analysts, however, said it was not a done deal. CNPC jointly operates three fields in south Iraq that produce 1.4 million barrels a day or more than half Iraq’s output. China and Malaysia have the largest share of international contracts in Iraq. CNPC is the largest integrated energy company in China.

Iraq, which pumps three million barrels of crude a day, is expected to reach eight million barrels by 2035, said the International Energy Agency. By then, 80% of Iraqi production will go to China.

Imported oil meets almost 60% of China’s needs. That will likely rise to 80% by 2035, according to the China Center for Energy Economics Research at Xiamen University.