LONDON/BASRA - Iraq's oil ministry thwarted three prospective deals last year that would have handed Chinese firms more control over its oilfields and led to an exodus of international oil majors that Baghdad wants to invest in its creaking economy.
But when it comes to further Chinese investment in major oilfields, Baghdad has drawn a line in the sand. Combined, Rumaila and West Qurna produce about half of the crude coming out of Iraq, which sits on the fifth-largest oil reserves in the world. "We don't want the Iraqi energy sector to be labelled as a China-led energy sector and this attitude is agreed by government and the oil ministry," another Iraqi official said.The interventions over BP, Exxon and Lukoil's positions in Iraq come after British oil major Shell decided in 2018 to withdraw from Iraq's vast Majnoon oilfield.
Over the past decade, oil revenue accounted for 99 per cent of Iraq's exports, 85 per cent of the country's budget and 42 per cent of its gross domestic product, according to the World Bank. It has not previously been reported that Sinopec was the potential buyer of Lukoil's stake. The Chinese company did not respond to a request for comment.A few months after Lukoil signalled it was considering a sale, Baghdad finally approved its plan to develop a field known as Block 10, where the Russian company had discovered an oil reservoir in 2017. Afterwards, Lukoil dropped the idea of selling its stake in West Qurna 2, the source said.
A State Department spokesperson said:"We regularly engage with our Iraqi counterparts on fostering an environment conducive to private sector investment."
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