Iraq’s oil ministry has finalized 13 new contracts for oil field development and exploration, as announced in an August 14 ceremony in Baghdad. Oil Minister Hayan Abdul Ghani highlighted that these contracts are expected to boost oil production by 750,000 barrels per day (b/d) and gas output by 850 million cubic feet per day (MMcf/d). This increase will enhance the flexibility of power station supplies and support the Iraqi energy sector.
The signed contracts include:
- China’s ZPEC for the East Baghdad and Middle Furat oil fields, as well as the Qurnain and Abu Khaima blocks.
- Hong Kong-based UEG for the Fao Block.
- China’s Geo-Jade for the Zurbatiya and Jebel Sanam blocks.
- China’s Sinopec for the Summer block.
- China’s CNOOC for Block 7.
- China’s Anton Oil for the Al-Dhifriya oil field.
- Kurdistan-based KAR for the Al-Dima, Sassan, and Alan oil fields, along with the Khilaisiya exploration block.
The recent licensing rounds, LR5+ and LR6, featured 29 projects, with only 13 contracts awarded. Despite the availability of profit-sharing contracts and reduced royalties, competition was fierce.
China’s dominance in Iraq’s oil and gas sector is further solidified by these agreements. In the first half of 2024, China imported 166.6 million barrels of Iraqi crude, highlighting its reliance on Middle Eastern oil. Chinese firms manage one-third of Iraq’s proven reserves and two-thirds of its current production, according to S&P Global Commodity Insights.
Kang Wu, global head of oil demand research at Commodity Insights, noted that China’s interest in Iraqi oil is driven by its substantial crude import needs and significant investments by Chinese oil companies in Iraq’s upstream sector.
