Russian gas giant Gazprom has been awarded the development contract for the supergiant Nasiriyah oil field in Iraq’s strategic southern eastern region close to the main export terminal of Al Fao in Basra. At around the same time, it was announced that China Petroleum Engineering and Construction Corp (CPECC) and PetroChina will complete the critically important Halfaya gas project by the end of Q1 this year. The Halfaya field lies 175 kilometres to the northeast of the Nasiriyah oil field and, together with Basra to the south, form a triangle of influence incorporating several major Russian and Chinese oil and gas developments. These two developments in turn follow the very recent announcement that China is over the halfway mark in completing the construction of Iraq’s biggest crude oil storage facility, also in Nasiriyah. This will also act as a logistical command centre for all of China’s and Russia’s oil and gas projects in southern Iraq and for the build-out of multiple non-oil projects connected to the all-encompassing ‘Iraq-China Framework Agreement’, as analysed in depth in my new book on the new global oil market order.
The supergiant Nasiriyah oilfield has an estimated 4.36 billion barrels of reserves in place, but since its discovery in the DhiQar province by the Iraq National Oil Company in 1975 little has been done to develop the oil. Tentatively coming on stream in 2009 and listed on Iraq’s 2009-2010 fast-track plan, which aimed to raise its output to about 50,000 barrels per day (bpd), the first half of 2009 saw ENI, Nippon Oil, Chevron, and Repsol submitting bids to develop the field on an Engineering Procurement Construction (EPC) contract basis, with a consortium comprised of Nippon Oil, Inpex, and JGC Corporation looking set to win the contract before negotiations broke down. The departure in 2014 of the divisive figure of Shia Islamist Nouri al-Maliki as prime minister, and his replacement by the seemingly more inclusive, although also Shia, Haider al-Abadi led to optimism in Iraq that the Nasiriyah project could move ahead again, but these hopes were also dashed. The development plan for Nasiriyah was then broadened out as part of a ‘Nasiriyah Integrated Project’ (NIP) that would include a 300,000-bpd refinery. This was part of Iraq’s plan at the time to increase refining capacity across the south by more than 700,000 bpd by (at that point) the end of 2015. Deals were agreed in principle with several international oil companies (IOCs) from both the Global North and the Global South to effect this, with around US$50 billion of investment earmarked for such