Recently, only Chinese companies won the bidding for oil and gas exploration rights in Iraq. This success is an example of China’s growing influence in the Middle East. China is making strategic moves by taking advantage of the U.S.’s disengagement from the Middle East, securing stable energy sources like oil and gas through expanded cooperation with the region. In return, Middle Eastern countries are deepening their ties with China by gaining access to its oil alternatives and social control technologies.
According to the Ministry of Foreign Affairs Global Energy Cooperation Center on the 26th, during the 5th and 6th licensing rounds for 29 oil and gas fields across 12 provinces in Iraq from the 11th to the 13th, only Chinese companies succeeded among the foreign companies that participated from Iraq, Europe, China, and Arab countries. Chinese companies won the exploration rights for 10 fields:
- China National Offshore Oil Corporation (CNOOC) won exploration rights for seven oil fields in the Diwaniya, Babil, Najaf, Wasit, and Muthanna regions in southern Iraq.
- Zhenhua won the Abu Khaymah and Qurnain oil fields in Muthanna, Baghdad.
- Anton Oilfield Service won the Dhufriya oil field in Wasit province.
- Sinopec won the Sumer oil field in Muthanna.
- GeoJade won the Jabal Sanam oil field in Basra province and the Zurbatia field in Wasit province.
- United Energy Group (UEG), listed in Hong Kong, won the Al Faw oil field in Basra province.
- ZPEC won the exploration and development rights for the eastern Baghdad oil field and the central Euphrates oil field.
Besides China, the Iraqi Kurdish company KAR Group won exploration rights for three oil and gas fields.
The Iraqi Minister of Oil announced that formal contracts based on the bids are expected to be finalized within two months. The remaining 16 exploration and development rights that were not won will be reevaluated by the Ministry of Oil and put up for bid again.
The main objective of Iraq’s recent oil and gas field bidding is to increase the production of natural gas, which is currently highly dependent on Iran.
The Global Energy Cooperation Center predicts that the grip of Chinese companies on Iraq’s oil industry will grow stronger as a result of this bidding.
Major Western oil companies such as the U.S.’s Exxon Mobil Corporation and the UK’s Shell are withdrawing from various projects in Iraq. Exxon Mobil withdrew from the West Qurna 1 oil field located in southern Iraq, and currently, the largest stake in this oil field is held by China’s PetroChina. Shell withdrew from the Majnoon oil field in Basra province in 2018. China’s Anton Oilfield Services is the current main contractor.
According to the Asan Institute for Policy Studies report China’s Cooperation with the Middle East during the U.S.-China Competition: Evaluation and Implications, China has designated the Middle East as a pivotal region since announcing its One Belt One Road strategy in 2013. Over the past decade, China has established strategic partnerships with major Middle Eastern countries such as Saudi Arabia, Iran, Israel, Turkey, the United Arab Emirates (UAE), and Qatar.
On the other hand, the U.S. has been creating a power vacuum in the Middle East since declaring its Pivot Asia policy.
China is establishing a stable energy supply system through cooperation with the Middle East, and the Middle East is strengthening its system by collaborating with China on future technologies such as internet control technology, advanced security surveillance systems, digital transition, renewable energy innovation, and other advanced technologies, thereby fostering a post-oil industry.
In a 2023 survey of young people in 18 Arab countries including Saudi Arabia, UAE, Kuwait, Egypt, Iraq, Libya, Jordan, Lebanon, Algeria, and Morocco conducted by ASDA’A Burson-Marsteller, China was ranked second with an 80% favorability rating, while the U.S. ranked seventh with a 72% rating.
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