Not long ago, Robert Kaplan, the well-known American writer, “complained” in The Wall Street Journal, saying: “... We have liberated Iraq so that Chinese firms can extract its oil.” The sentiment that was expressed by Kaplan was in fact reflecting the evolution of the situation in Iraq, where the Chinese presence was rising strongly. Tellingly, Beijing’s position in Iraq evolved quickly, from among the most outspoken of critics of the 2003 U.S.-led invasion to topple Saddam Hussein, to emerging as one of the biggest economic beneficiaries of the war in Iraq.
China’s Catching-up Game
The Big Bet
Beijing is betting big in Iraq. The view from Beijing is that a stable Iraq is good for the region and for China’s core economic interests.Dr. Naser Al-Tamimi
Beijing is betting big in Iraq. The view from Beijing is that a stable Iraq is good for the region and for China’s core economic interests. According to business Monitor International, (BMI), in November 2008, China and Iraq finalised a $ 3bn oil service contract for the development of the Ahdab oil field. The State-run Chinese National Petroleum Co. (CNPC) originally signed a Production Sharing Agreement (PSA) for the field in 1997. This is the first deal from the Saddam Hussein era to be honoured by the new Iraqi regime. While in November 2009, CNPC won a large stake in a $ 15 billion deal to develop the Rumaila oil field in southern Iraq, thought to be the second largest in the world. In December 2009, CNPC was awarded a 50% stake in the development of the Halfaya oilfield located southern Iraq. Halfaya is proven to hold 4.1 billion barrels of recoverable reserve and has production potential of 200 thousand to half million bpd. In February 2010, Beijing cancelled 80% of Iraq’s $8.5 billion debt to China, a move designed to further Chinese business interests in the country. In June 2012, CNPC finished the first phase of the Halfaya and increased production from 3,000 bpd to 100,000 bpd, 15 months ahead of schedule.