China’s oil firms elbow into Iraqi market

China's independent oil companies are ramping up operations in Iraq, investing billions of dollars in OPEC's number two producer even as some global majors have scaled back from a market dominated by Beijing's big state-run firms.

- CHEN AIZHU AHMED RASHEED

Drawn by more lucrative contract arrangements, smaller Chinese producers are on track to double their outputin Iraq to 500,000 barrels per day by around 2030, according to estimates by executives at four of the firms, a figure not previously reported.

For Baghdad, whichis also seeking to lure global giants, the growing presence of the mostly privately run Chinese players marks a shift as Iraq comes under growing pressure to accelerate projects, according to multiple Iraqi energy officials. In recent years, Iraq's oil ministry had pushed back on rising Chinese control over its oilfields.

For the smaller Chinese firms, managed by veterans of China's state heavyweights, Iraq is an opportunity to leverage lower costs and faster development of projects that may be too small for Western or Chinese majors.

With meagre prospects in China's state-dominated oil and gas industry, the overseas push mirrors a pattern by Chinese firms in other heavy industries to find new markets for productive capacity and expertise.

Little-known players including Geo-Jade Petroleum Corp, United Energy Group, Zhongman Petroleum and Natural Gas Group and Anton Oilfield Services Group made a splash last year when they won half of Iraq's exploration licensing rounds.