China, Iraq to renegotiate oil agreement on hold since 1997
China and Iraq are reviving a $1.2-billion deal signed by Beijing and Saddam Hussein’s government in 1997 to develop an Iraqi oil field, Baghdad’s oil minister said.
Officials will meet next month to renegotiate the deal over the Ahdab field, said Iraqi Oil Minister Hussein Shahristani as he was wrapping up a three-nation tour to secure investment for Iraq’s oil industry.
“If agreement is reached very quickly, then I expect them to start working right away,” Shahristani said at a Saturday news conference.
China, the world’s second-largest oil consumer, has been investing heavily in efforts to secure access to foreign supplies.
State-owned China National Petroleum Corp. signed the Ahdab deal in the midst of U.N. sanctions that barred direct dealings with Iraq’s oil industry. Beijing was waiting for sanctions to end when the U.S. invasion in 2003 overthrew Saddam’s government.
The new Baghdad government courted Beijing because Chinese producers have been willing to invest in Angola and other countries considered too dangerous or politically isolated.
Beijing had been thought to be out of the running for major contracts in postwar Iraq, with the best deals going to the United States and its allies. But the upsurge in violence there has made the country less attractive to Western producers.
Shahristani said Ahdab would be among the first fields offered to foreign bidders, which will need to show technical and financial capability and a proven record in producing oil.