‘China reaps biggest benefits of Iraq’s post US invasion oil boom’
Since the American-led invasion of 2003, Iraq has become one of the world’s top oil producers, and China is now its biggest customer.
China already buys nearly half the oil that Iraq produces, nearly 1.5 million barrels a day, and is angling for an even bigger share, bidding for a stake now owned by Exxon Mobil in one of Iraq’s largest oil fields.
‘The Chinese are the biggest beneficiary of this post-Saddam oil boom in Iraq,’ said Denise Natali, a Middle East expert at the NationalDefense University in Washington. ‘They need energy, and they want to get into the market.’
Before the invasion, Iraq’s oil industry was sputtering, largely walled off from world markets by international sanctions against the government of Saddam Hussein, so his overthrow always carried the promise of renewed access to the country’s immense reserves.
Chinese state-owned companies seized the opportunity, pouring more than $2 billion a year and hundreds of workers into Iraq, showing a willingness to play by the new Iraqi government’s rules and to accept lower profits to win contracts.
‘We lost out,’ said Michael Makovsky, a former Defense Department official in the Bush administration who worked on Iraq oil policy. China is now making aggressive moves to expand its role, as Iraq is increasingly at odds with oil companies that have cut separate deals with Iraq’s semiautonomous Kurdish region. The Kurds offer more generous terms than the central government, but Iraq and US consider them illegal.