How did America lose a giant oil field in Iraq to China?

An American website said that the ratification of the American oilfield services giant, “Schlumberger”, last week of a deal worth 480 million dollars to drill 96 oil wells in the giant West Qurna-1 field, fits perfectly with the logic of permanent play that Iraq adopts with both the United States and China. .

The West Qurna-1 field is located about 65 km north of Basra, which is the main oil and export center in southern Iraq, and contains a large part of the recoverable reserves estimated at 43 billion barrels in the giant West Qurna field.

According to the Oil Price website,Oil Price) The American, the West Qurna-1 field was originally believed to contain about 9 billion barrels of reserves, but the Iraqi Oil Ministry said earlier this year that it contains recoverable reserves of more than 20 billion barrels, and that it has plans to increase the capacity of The field’s production of crude oil will increase to more than 700,000 barrels per day over the next five years.

Although the field currently produces only about 380,000 barrels per day, the ministry says that its capacity is at least 500,000 barrels per day, and the new wells that Schlumberger will drill aim to add about another 200,000 barrels to this production capacity.

Although the field benefits – like many Iraqi oil fields – from the lowest extraction costs in the world, which are about one to two US dollars per barrel, similar to the best fields in Saudi Arabia and Iran, it suffers from a lack of sufficient water pumping to increase the pressure of the reservoirs.

So far, according to the American website, none of the efforts aimed at fixing this problem through the implementation of the CSSP “Common Seawater Supply Project” (CSSP) have succeeded, especially since the only company in the world that is able to complete it correctly, which is The American “ExxonMobil”, it seems, is no longer interested in this, nor does it intend to continue to keep its 32.7% stake in the field.

According to Oil Price, ExxonMobil’s unwillingness to continue in this field is due to the same reasons that prompted many major Western oil companies to take the same step in recent months, and it also highlights in particular why any American effort to reassert its influence through Iraqi oil fields through Schlumberger is not built on solid foundations.

In addition to the rampant corruption in the Iraqi hydrocarbon sector, the fact remains that China has been expanding its influence across the same oil fields since the United States announced its desire to reduce its role in the Middle East (and elsewhere like Afghanistan) in order to avoid fighting “endless wars.”

At a time when it was dealing with a volatile president like former President Donald Trump and was engaged in a highly sensitive trade war with Washington, Beijing – according to the site – sought to achieve this goal by avoiding signing huge and eye-catching deals for exploration and development contracts in large oil fields, and instead enabled Including a string of obscure Chinese engineering and service firms that no one’s ever heard of getting ‘contract awards’.

An example of this is the West Qurna-1 field itself, where China already owns the lion’s share of the site, not only through the 32.7% stake held by PetroChina – the arm of China National Petroleum Corporation (CNPC). , but also through the gradual acquisition by Chinese companies of a set of huge, supposedly “contractual” rewards for their work in this field.

The most recent of these “rewards” included a $121 million engineering contract to modernize facilities used to extract gas during crude oil production for China Petroleum Engineering and Construction Corporation (CPECC), which made China not the main player in the West Qurna field. 1- He excluded ExxonMobil from any effort to develop or implement the “Joint Seawater Supply Project”, but also allowed Beijing to receive other offers from Iraq.

more economy

Leave a Reply

Your email address will not be published. Required fields are marked *