Iraq signs mega-energy deal with Chinese oil firm

BAGHDAD: Iraq signed a major energy deal Wednesday with a Chinese petrol company in the southern province of Basra, aiming to boost oil production and build a refinery and electricity plants.

China has gained a major foothold in oil-rich Iraq in recent years, becoming a major player across various sectors and now one of the largest importers of Iraqi crude.

Iraq’s Oil Minister Hayan Abdel Ghani announced in a statement the signing of the mega-project with a consortium comprising of Geo-Jade Petroleum and the Iraqi company Hilal al-Basra.

The project aims to increase oil production in the Tuba field to 100,000 barrels per day, according to Abdel Ghani.

It also covers the building of a refinery with a capacity of 200,000 bpd, a 650-megawatt electricity plant and a solar power facility with a capacity of 400 megawatts.

The deal also includes a petrochemical plant and a fertiliser factory.

Abdel Ghani said the project “would contribute to the country’s economic development and provide job opportunities for thousands” of Iraqis.

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The ministry has not disclosed the cost or timeline for the deal.

Geo-Jade Petroleum already operates in Iraq and is set to begin a controversial oil exploration project in the country’s south that activists fear will significantly impact the Mesopotamian Marshes of Huwaizah.

According to the World Bank, Iraq has 145 billion barrels of proven oil reserves — among the largest in the world — amounting to 96 years’ worth of production at the current rate.

Iraq has been trying to move past decades of war and unrest, including a sectarian struggle after the 2003 US-led invasion that toppled Saddam Hussein.

It only recently regained a semblance of stability and authorities hope to attract investments, especially in the energy sector.

Earlier this year, Iraq finalised an agreement with energy giant BP to develop oil fields in the north.

Last month, it signed a memorandum of understanding with US energy firm GE Vernova to produce 24,000 megawatts of electricity.

Despite its oil wealth, Iraq depends on imports to meet its energy needs, and it hopes to increase natural gas production to reduce its reliance on neighbouring Iran, a crucial supplier of power.