China's biggest oil producer PetroChina will be developing Iraq's giant oil field West Qurna with American Exxon Mobil. The deal could make Chinese energy giant the biggest foreign investor in Iraq’s oil industry.
China already dominates the oil fields around southern Iraq,
Reuters reports.
PetroChina was the first foreign company to strike an oil deal in
Iraq after US-led forces overthrew Saddam Hussein. It is now
developing Iraq's biggest oilfield Rumaila with BP.
The PetroChina-Exxon agreement could be announced in weeks.
"PetroChina will participate in developing the field,"
Reuters quotes an industry source.
Earlier this year PetroChina's ex-chairman Jiang Jiemin told
Reuters that the Chinese energy major was keen on working with
Exxon at West Qurna.
The American company currently holds a 60 percent stake in the
$50 billion West Qurna project, pumping out around 480,000
barrels per day.
PetroChina is also in talks with Russian Lukoil to have a share
in another development project at the field, West Qurna-2,
according to the agency. West Qurna-2 is expected to produce
500,000 bpd in 2014 and needs $30 billion in investments.
Lukoil plans to invest $5 billion in the project in 2013 alone.
The source said that the Russian company would prefer a Chinese
partner in the project to secure a guaranteed market for oil
sales.
The head of Lukoil, Vagit Alekperov, has said that the company
wanted a Chinese firm to replace Norway's Statoil at the project,
after it agreed to sell its 18.75 percent stake last year.
Oil producers from the Middle East, Russia, Africa and Latin
America are all competing for a bigger share of China's growing
market as demand for imported oil falls in the US and Europe,
according to Reuters.
The International Energy Association said on Friday that oil
production in Iraq fell below three million bpd for the first
time in five months in July, after repeated bomb attacks on the
country’s major pipeline. It predicted a further fall of 500,000
bpd in September as a result of infrastructure work at the oil
export terminals, the WSJ quotes the IEA report.