(RoyalPatriot.com )- Iraq claims to have drawn a line in the sand over additional Chinese involvement in its oilfields.
Last year, Iraq’s Ministry of Oil stopped plans by Exxon Mobil and Lukoil of Russia to sell shares in vital Iraqi oilfields to China, halting three potential transactions that would have given Chinese state-run companies additional influence. According to reports, BP Oil of the United Kingdom proposed selling a share to a Chinese state-owned firm. Still, Iraqi authorities encouraged BP to stay with Iraq by utilizing the government’s veto authority, which empowers it to refuse clearance for oil agreements.
According to the World Bank, Iraq has the fifth-largest oil reserves globally, with oil money accounting for 99 percent of exports, 85 percent of the country’s budget, and 42 percent of GDP.
Media reports show that when it comes to investments under the Belt and Road Initiative (BRI), China’s hallmark foreign policy endeavor, China already has a significant lead in Iraq. The BRI was announced by the Chinese Communist Party in 2013 as a global infrastructure and economic development initiative aimed at furthering China’s geopolitical objectives.
Iraq was the greatest beneficiary of BRI building projects in 2021, with deals totaling $10.5 billion being struck between China and Iraq. China is developing the Al Khairat Heavy Oil Power Plant in south-central Iraq, as well as the Power China Solar PV Park, a ground-mounted solar project, and Sinopec will develop the Mansuriya gas field near Iran’s border.
In return for Iraqi oil, other projects include the restoration and development of Nasiriyah International Airport in the Dhi Qar region, as well as the construction of 8,000 schools in Iraq over the next several years. Reports show that Iraq has surpassed Russia and Pakistan as China’s third-largest Belt and Road energy partner with all of these energy-related projects.
Iraq is concerned that China’s growing dominance in the oilfields may result in the loss of significant investments from Western countries. According to reports, an Iraqi official stated that Iraq’s government and its oil ministry do not want the Iraqi energy industry to be characterized as a China-led energy sector. Along the same line of thinking, the US State Department has explained to a media outlet that if Mobil Exxon left Iraqi oilfields, a vacuum would be created, which Chinese state-run businesses would fill.
State-run companies in China are less interested in getting better terms and producing profits for shareholders. Instead, a Chinese oil executive told the media they are more concerned with guaranteeing oil supply for China’s developing economy.