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Chinese companies win contracts to explore Iraqi oil and gas fields

Chinese companies won contracts to explore five Iraqi oil and gas fields on Saturday in a licensing round aimed primarily at increasing gas production for local use.

An Iraqi Kurdish company also won two of the 29 projects located in central, southern and western Iraq that were presented in the three-day licensing round, and include for the first time an offshore exploration area in the waters of the Gulf.

The gas expected to be obtained from the current licensing round is equivalent to 200% of the amount of gas that Iraq imports from Iran, which amounts to 1,700 million cubic meters per day, and the quantities of gas expected to be produced from this round will be about 800 million standard cubic meters per day.

According to an Iraqi oil bulletin received by Shafaq News Agency: “The Chinese company (ZEPC) won two contracts to develop the eastern Baghdad field and the middle Euphrates fields, while the Iraqi company (KAR) won two contracts to develop the Dima field in Maysan and the Alan and Sasan fields in Nineveh Governorate, and the (UEG) company won.” The Chinese company won the contract to develop the Al-Faw field in Basra, and the Chinese company “Zhenhue” won the contract to develop the Al-Qarnain block in the Najaf and Anbar governorates, and the “GEO-JADE” company won the development of the Zurbatiyah block in the Wasit Governorate.

Iraq seeks to attract billions of dollars in investments to develop the oil and gas sector at a time when it is looking to increase local production of petrochemicals and stop gas imports from neighboring Iran, which is currently essential for energy production.

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

But it was noticeable that there were no major American oil companies, even after Iraqi Prime Minister Muhammad Shiaa Al-Sudani met with representatives of American oil companies during an official visit to the United States last month.

There are about 20 other projects that will be up for bidding on Sunday and Monday.

Iraq, which is the second largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC) after Saudi Arabia, once aimed to become a competitor to the Kingdom, whose production exceeds a tenth of global demand.

But the development of the oil sector has been hampered by contract terms that many major oil companies consider unfavorable, as well as recurring conflicts and political paralysis, according to Reuters.

Investors’ increased focus in the past few years on environmental, social and governance criteria has also had an impact.

Giant Western oil companies such as Exxon Mobil and Royal Dutch Shell have exited a number of projects in Iraq, while Chinese companies have steadily expanded their presence.

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