Iraq’s oil minister announced on Sunday that Chinese companies have clinched five additional bids to explore oil and gas fields in the country, marking a major advancement in the West Asia nation’s hydrocarbon exploration licensing round.
Chinese enterprises have emerged as the sole foreign winners thus far; securing licenses for 10 oil and gas fields, with Iraqi Kurdish Company KAR Group acquiring two licenses as well.
The ongoing licensing round, Iraq’s sixth, aims to strengthen domestic energy production, with a focus on enhancing output for local consumption.
More than 20 companies, including European, Chinese, Arab, and Iraqi entities, participated in the pre-qualification process for the 29 projects on offer.
Of particular interest to Iraq is the amplification of natural gas production to fuel power plants currently reliant on gas imports from Iran.
However, despite these ambitions, bids were notably absent for at least six fields with significant gas potential, posing potential setbacks to Iraq’s gas production objectives.
Despite Iraqi Prime Minister Mohammed Shia’s recent official visit to the US, no bids were placed by US oil majors, marking their absence from the bidding process.
The lack of participation from American companies is evident, especially given the diplomatic exchanges preceding the licensing round.
In specific bid awards, China’s CNOOC Iraq secured a bid to develop Block 7 for oil exploration, spanning across several provinces in central and southern Iraq.
Additionally, ZhenHua, Anton Oilfield Services, and Sinopec won bids for the development of the Abu Khaymah, Dhufriya, and Sumer oilfields, respectively.
China’s Geo-Jade also secured a bid for the exploration of Iraq’s Jabal Sanam field in Basra province.
Iraq, the second-largest oil producer within OPEC, has encountered challenges in its oil sector development, including contractual terms deemed unfavourable by major oil companies, recurring military conflicts, and growing investor scrutiny on environmental, social, and governance criteria.
These factors have influenced the participation dynamics in Iraq’s oil and gas exploration ventures.
(With inputs from Reuters)