Chinese Enterprises Going Global: The Footprints of Chinese Companies in Iraq

The Middle Eastern country of Iraq is rich in oil resources. After the "Desert Storm" military operation initiated by the United States, Iraq entered the post-Saddam era. Following initial domestic turmoil, the political situation gradually stabilized, one of the signs of economic development being the recovery of population growth.

The special aspect of Iraq is that Iran's Shia Islamic sect has great influence in the country, making Iraq part of the so-called Shia "resistance axis." This organization is led by Iran and includes members such as Syria, Hezbollah, Lebanon, and Ansar Allah of Yemen. After Turkey-backed Shar'a took over Syrian politics, the influence of the "resistance axis" weakened somewhat but still retained certain influence.

Due to the extensive presence of Iranian influence in Iraq, risk-averse Western oil capital did not massively intervene in Iraq's oil and gas development, prompting Iraq to turn to the Eastern giant.

The consortium formed by China Continental Oil and Iraqi Basra Crescent Company signed an intent agreement with Iraq’s state-owned Basra Oil Company to construct Iraq’s first comprehensive project in South Basra. The project includes building a refinery, a petrochemical plant, a fertilizer plant, a thermal power plant, and a solar power plant. Iraq’s Oil Minister Hayan Abdul Ghani stated, "This project will bring a qualitative leap in the development of our country's oil resources and support for the national economy."

The implementation of this project will increase the oil production of the nearby Tubba field nearly sevenfold. To boost the oil production of the neighboring West Qurna 1 field, the Iraqi government drew on China’s experience. Shortly after China National Petroleum Corporation (CNPC) took over as the main contractor of the West Qurna 1 field from ExxonMobil earlier this year, a groundbreaking ceremony for the new operational headquarters of the West Qurna 1 field was held in Basra, the second largest city and major port hub in Iraq.

China's leading role in the construction of the West Qurna 1 field reflects the shared vision of deepening economic and trade cooperation between both sides. The experiences gained will have a positive impact on the implementation of the South Basra comprehensive project.

Economic corridors depend on a country's economic strength, and trade logistics determine a country's survival and development.

Turkey, highly sensitive to trade corridors, dominated the massive "Development Road" project in Iraq, aiming to compete with the "India-Middle East-Europe Economic Corridor" (IMEC), which excludes Turkey and is led by the United States. Iraq recognizes the "Development Road" as a complement to China's Belt and Road Initiative and earnestly hopes for China's participation in the development of the "Development Road" corridor in Iraq.

In the future, there will be great room for improvement in Sino-Iraqi cooperation. The regional strategy of Chinese enterprises in Iraq must consider perspectives such as Iran, Turkey, Sunni, and Shia, carefully and prudently planned in a multidimensional and multivector manner in the multipolar era to jointly plan future development.

Quick Facts: The South Basra Comprehensive Project is one of the key assets acquired by China in recent years in Iraq. Last August, Chinese companies won most of the contracts for 13 oilfields and exploration blocks in the latest bidding round by Iraq’s Ministry of Oil. Once fully developed, these projects will add 750,000 barrels per day of oil and 850 million cubic feet of natural gas production to Iraq. So far, more than one-third of Iraq’s proven oil and gas reserves and more than two-thirds of current production are managed by Chinese companies.

Original Article: https://www.toutiao.com/article/1832840712904704/

Disclaimer: The article solely represents the author's personal views.