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China is making further inroads into Iraqi oil and gas by inking an initial agreement with Iraq’s state-owned Midland Oil Company to develop the Mansuriya gas field with a Chinese-Iraqi consortium.
The already-producing Mansuriya field foresees production of 100 million standard cubic feet of gas over a period of 18 months and 300 mscf projected over a period of 4-5 years, Reuters reported, citing a Iraqi oil ministry statement on Monday.
The consortium brings together China’s Gereh and Petro Iraq.
Earlier in May, Chinese companies won four bids for oil and gas exploration in Iraq during actions with 29 projects up for bidding.
Iraq is attempting to boost output for domestic oil and gas use, reducing reliance on Iran for gas, in particular.
China is the only winning bidder in the Iraqi auctions, picking up nine oil and gas fields last week, with an Iraqi Kurdish company taking two, and no U.S. oil majors participating.
CNOOC, China’s exploration giant, won a bid to develop onshore Block 7 in central and southern Iraq, while Chinese Sinopec won bids to develop four oilfields, including Abu Khaymah, Dhufriya, Wasit and Summer, Voice of America reported.
While Baghdad’s primary goal here is to boost gas production for domestic use, two high-potential gas fields up for auction failed to garner any attention, even from the Chinese.
In 2019, Baghdad and Beijing signed the “Oil for Reconstruction and Investment” agreement, opening the door for Chinese companies to invest in Iraqi infrastructure in return for oil. Since then, Chinese companies have come close to completing construction on a 300,000-barrel-per-day refinery at Iraq’s key Faw Port as it works towards creating what Simon Watkins describes for Oilprice.com as “one part of a giant Mesopotamian client state” that intends to include Iran, as well.
