China’s Iraq Investment

By By Mu Chunshan. Originally published in The Diplomat, and re-produced with permission by Iraq Business News.

The visit by Iraqi Prime Minister Nouri al-Maliki to China didn’t just fail to grab much international media attention – there was also little coverage in the Chinese media, too.

Most Chinese associate Iraq with Saddam Hussein and the US-led war that unseated him. Those with a deeper understanding of international affairs will also be aware of Iraq’s vast oil reserves. As of October 2010, Iraq had proven oil reserves of 143.1 billion barrels of oil – the world’s second largest. Its oil reserves are its strongest draw for foreign capital, and the development of Chinese-Iraqi relations means that China will have a significant stake in the country’s oil interests.

Already, China is working with Iraq on its oil and gas development. In 2008, PetroChina and another Chinese oil company, China ZhenHua Oil, signed a contract worth $3 billion with the Iraqi government for oil exploration rights for 23 years. This was the first major deal signed with foreign firms following the fall of Saddam Hussein in 2003. Drilling began last month, and is eventually expected to produce about 60,000 barrels of oil per day.

In 2009, PetroChina and a British firm obtained exploration rights to Iraq’s biggest oil field, which has oil reserves of about 17 billion barrels of oil, which is more than 10 percent of the country’s oil reserves.

But Maliki’s visit wasn’t just about oil.

On the second day of his visit, Maliki met with China’s business representatives, with only one media outlet – China’s official Xinhua News Agency – invited to cover the meeting.

Comments are closed.