Chinese and Japanese Best-Placed for Oil Contracts in Iraq

Monday, 07 July 2008 11:31 By Stphane Bussard, Truthout | name.

Chinese and Japanese Best-Placed for Oil Contracts in Iraq

The Iraqi government has still not concluded a single contract.

    Monday, the Iraqi oil minister officially invited 35 oil companies to make their offers for development of the oil fields of the country that holds the third-largest proven reserves in the world, estimated at 117 billion barrels. According to intelligence gathered by Le Temps, Shell will obtain the Kirkuk field in the north and the Buzurgan field in Missan Province. BP is likely to be assigned the Rumaila field. On Tuesday, at the Global Oil Congress in Madrid, Total's boss, Christophe de Margerie, stated that his company was on the verge of signing contracts. The French major could obtain the Nahr Amer and Majnoon fields. It also counts on developing part of the West Qurna field along with Chevron-Texaco and Lukoil would get another part of that same field.

    The Western press talks primarily about Western oil companies, although it's the Chinese and the Japanese that are the best-placed in the race for contracts. (See Le Temps of June 23, 2008). CNPC, which holds the sole valid contract concluded in 1997 under Saddam Hussein, and Japex are ready to get to work. Their contracts are still "baking." Officials at the two Asian majors are waiting until Iraq has a legal foundation - the new oil law is still blocked in Parliament - to go into action. But the two companies are already looking for derricks to install on the existing Ahdab and Gharraf fields - which have not yet ever been exploited. Author of a report on Iraqi oil for IHS Petroconsultants, Mohamed Zine, emphasizes that "Beijing and Tokyo don't negotiate contracts only; they're ready to grant vast loans for construction and improvement of Iraq's infrastructure." Another great advantage: Japex and CNPC are likely to obtain long-term contracts allowing them to take a share of production. The Western majors will have to settle for technical assistance contracts with a maximum two-year duration that don't require Parliament's endorsement, but that do allow them to deal with the most urgent matters first: to restore threatened oil fields.

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Last modified on Monday, 07 July 2008 11:57