According to WPB, Iraq's oil industry is being transformed with private Chinese oil companies growing their investments and operational footprint alongside China's state behemoths. The budding trend foreshadows a strengthening of diversification among foreign participants in Iraq's hydrocarbon development strategy.
Industry insiders' estimates suggest that independent Chinese firms as a whole might be able to achieve a production level of up to 500,000 barrels a day in the near future. That would represent a significant boost to their portion, especially since China National Petroleum Corporation (CNPC), the state-owned giant, already manages the lion's share of Iraq's oil output. CNPC has interests in some of the most important oil properties in Iraq, including Rumaila, West Qurna 1, and Haifaya.
While Western majors cut back or withdraw from the region, Chinese players have rushed to fill the gap. CNPC's recent acquisition of production on the huge West Qurna 1 field is a good example. With recoverable reserves of more than 20 billion barrels, the field produced about 550,000 barrels a day last year, and CNPC has mapped out to boost that to 1.2 million barrels a day over the next few years.
After the earlier Western company withdrawal, recent events hold promise for a return. Negotiations have been underway between Iraq's federal government and US-based majors ExxonMobil and Chevron for new investment in upstream schemes. A senior official in Iraq's oil ministry confirmed that ExxonMobil was in negotiations for a new project in Iraq's oil sector. This new venture has been interpreted as a sign of renewed American and other international oil companies' interest.
Simultaneously, Chevron is weighing options for entering into deals to produce fields in the southern Nasiriyah province as well as the Balad province, which is located in the north-central Saladin governorate.
Iraq plans to significantly increase its oil production capacity in the future, aiming for a production rate of over 6 million barrels per day, as part of a strategic campaign to break a multi-year drought. National production currently is around 4 million barrels per day, based on current figures, which leaves a lot of room for growth.
By Bitumenmag
Bitumen, Oil, Petroleum
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