Latest news with #Geo-JadePetroleum
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6 days ago
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China Tightens Grip on Iraq's Energy Future with Massive Basra Megaproject
China's Geo-Jade Petroleum has signed a swathe of major contracts that give Beijing control over Iraq's first fully integrated energy project. This comprises a development project to increase production at the Tuba oil field from 20,000 barrels per day (bpd) to 100,000 bpd, constructing a 200,000-bpd high-specification refinery, and building a 620,000 tonnes annual capacity petrochemical plant, according to Iraq's Oil Ministry. It also includes the construction of a 520,000-tonne annual capacity fertilizer plant, developing a 650-megawatt thermal power plant, and building a 400-megawatt solar power station. All this will be done in the heart of Iraq's oil and gas industry, centred in the southern province of Basra that is also home to its key port and export hub of the same name. These projects combined will boost Beijing's already enormous influence over the country's oil and gas sectors, and related infrastructure developments at a time when the U.S. and its allies believed that they were starting to progress in their attempts to reassert their own influence across the oil and gas steady drift of Iraq towards China and away from the West began as the U.S. overstayed its welcome following its toppling of Saddam Hussein in 2003 and it gained momentum after U.S. President Donald Trump unilaterally withdraw the country from the 'nuclear deal' with Iran in 2018. China moved to position itself to occupy the vacuum that would be left in Iran and Iraq, which together remain the biggest oil and gas prize in the entire region, in addition to being at the heart of the Shia Crescent of Power that rivals the influence of Sunni Islam across the region and beyond. Iraq officially holds a very conservatively-estimated 145 billion barrels of proved crude oil reserves (nearly 18% of the Middle East's total, and the fifth biggest on the planet), according to the Energy Information Administration. Unofficially, it is extremely likely that it holds much more oil than this. In October 2010, Iraq's Oil Ministry increased its own official figure for the country's proven reserves but at the same time stated that Iraq's undiscovered resources amounted to around 215 billion barrels. Given this backdrop, China's efforts following the U.S. withdrawal from the Iran nuclear deal were rewarded with the 'Iran-China 25-Year Comprehensive Cooperation Agreement', as first revealed anywhere in the world in my 3 September 2019 article on the subject and analysed in full in my latest book on the new global oil market order. In Iraq's case, Beijing concluded the foundation stone 'Oil for Reconstruction and Investment' agreement signed in September 2019, which allowed Chinese firms to invest in infrastructure projects in Iraq in exchange for oil. This later broadened and deepened in the equally all-encompassing 'Iraq-China Framework Agreement' of 2021. In both cases, the deals included extremely generous terms for Chinese firms that undertook exploration and development projects in both countries, with a key basic point on each being that China would get be allowed first refusal on most of the oil, gas, and petrochemicals projects that came up in Iran and Iraq for the duration of the respective relationship deals. There were multiple other benefits for Beijing too, one of which was that although the deals were often 25-years in duration they were structured so that they would not officially start until two years after the signing date, so allowing whichever Chinese firm was involved more time to recoup more profits on average per year and less upfront investment. Additionally, the per barrel payments to China were the higher of either the mean average of the 18-month spot price for crude oil produced or the past six months' mean average price, tilting the remuneration firmly in Beijing's favour. The deals' terms also included at least a 10% discount to China on the value of the oil it recovered – although in several cases with extra bonuses applied this totalled 30%. The latter was the same discount to the lowest mean one-year average market price at the key gas pricing hubs for the gas that Chinese firms captured as well. No details have yet been released on the compensation being awarded for the Integrated Energy Project. That said, securing oil and gas flows is only one positive aspect for China of building out its presence across Iraq. Oil and gas development contracts carry with them the legal right to fully secure the development sites through whatever means the developer firms think necessary, including stationing unlimited numbers of security personnel in and around the immediate sites. One notable early example of the leveraging of oil and gas agreements with Iraq by China was a pledge from Beijing for nearly IQD1 trillion (US$700 million at the time) of rail, road and ship transportation infrastructure projects in the city of Al-Zubair in the southern Iraq oil hub of Basra that has since seen a flurry of Chinese developments, including the upcoming work that forms Geo-Jade Petroleum's Integrated Energy Project. Another deal was for Chinese companies to build a civilian airport to replace the military base in the capital of the southern oil rich Dhi Qar governorate, with this region containing two of Iraq's potentially biggest oil fields – Gharraf and Nassiriya. This airport project will include the construction of multiple cargo buildings and roads linking the airport to the city's town centre and separately to other key oil areas in southern Iraq, including Basra. In the later discussions involved in the 2021 'Iraq-China Framework Agreement', it was decided that the airport could be expanded later to be a dual-use civilian and military airport. The military component would be usable by China without first having to consult with whatever Iraqi government was in power at the time, as also analysed in full in my latest book on the new global oil market order. In the same synergistic mould, it should be remembered that China is also still working on the 300-000 bpd Al-Faw refinery, close to Faw Port's main export terminal in Basra. According to the Iraq Ministry of Planning, the China Petroleum Pipeline Engineering Company (CPPEC)-led project will act as a storage hub and supply conduit for 3.0-3.5 million barrels of crude oil that will then either go for export out of Basra Port or will be transported to the Al-Faw refinery and through pipelines to other refineries and power plants in central and northern Iraq. It will also act as a logistical command centre for all of China's extensive oil and gas projects in Iraq and for the build-out of multiple non-oil projects connected to the 'Iraq-China Framework Agreement'. Although not all the Chinese companies involved in the direct and indirect work connected to the Al-Faw refinery have been reported by the General Company for Ports in Iraq, a source close to Iraq's Oil Ministry exclusively told that PowerChina and Norinco International are still the guiding forces behind the development. This makes sense, as these two firms signed the original contract in January 2018 to build the refinery at Al-Faw, which together with its 300,000-bpd capacity would also have a petrochemical plant attached to the development. It also perfectly aligns with Beijing's broad modus operandi in its expansion strategy across the Middle East to combine commercial ventures with a military presence, as alongside its petroleum and mineral resources exploration and development activities, Norinco is one of China's foremost defence contractors. One of Norinco's key oil subsidiaries is Zhenhua Oil, which was the company that on 2 January 2021 made a multi-billion-dollar deal with Iraq's Federal Government in Baghdad to prepay for four million barrels every month for five years to be delivered to China by Iraq's State Organization for Marketing of Oil (SOMO). As also analysed in depth in my latest book on the new global oil market order, it was exactly the same strategy to take over Iraq's oil industry in the south as Russia had successfully used to take over the industry in the semi-autonomous northern region of Iraqi Kurdistan in 2017. By Simon Watkins for More Top Reads From this article on
Iraq Business
24-05-2025
- Business
- Iraq Business
Fears Oil Drilling would Destroy Iraqi Marshes
By Rouba El Husseini for Al Monitor. Any opinions expressed here are those of the author(s) and do not necessarily reflect the views of Iraq Business News. 'Leave our marshes alone': Iraqis fear oil drilling would destroy fabled wetlands Plans to drill for oil in the protected Mesopotamian Marshes of southern Iraq have galvanised villagers and activists determined to save the mythical wetlands already battered by years of drought. Click here to read the full article. Tags: China, drought, environment, Geo-Jade Petroleum, Huwaiza oil field, Iran, Iraqi Marshes, marshes, Maysan, Maysan Oil Company (MOC), Missan, Missan Oil Company (MOC), shared oilfields
Gulf Insider
23-05-2025
- Business
- Gulf Insider
Iraq Seals Major Oil Deal With Chinese Company
Iraq's government has signed a deal with Chinese Geo-Jade Petroleum to expand production at the Tuba oil field, build a refinery and two power plants. Per an AFP report, the deal will also involve the construction of a petrochemicals facility and a fertilizer plant. The refinery that Geo-Jade Petroleum will build will have a capacity of 200,000 barrels daily. One of the power plants will have a capacity of 650 MW and the other, a solar power facility, will have a capacity of 400 MW. 'These projects with Geo-Jade represent a big leap in the development of Iraq's oil wealth and supporting of the national economy,' Iraq's oil minister, Hayan Abdel Ghani, said, adding that the deal would create thousands of jobs. Geo-Jade Petroleum already operates in Iraq – it is in charge of the Khana field, which is slated to begin expanded production in 2026. Chinese companies as a whole have built a solid presence in OPC's number-two, driven by Beijing's strategy to expand supply availability through both domestic and international investments. To date, more than a third of Iraq's proven oil and gas reserves and as much as 66% of production are under the management of Chinese firms, Simon Watkins reported earlier this year. The Iraqi government's ambition to boost production significantly, to as much as 7 million bpd, Chinese companies are among the best placed to take advantage of the opportunity. Currently, Iraq produces around 4 million barrels daily—above its OPEC+ production quota, which has created tensions with OPEC's number-one, Saudi Arabia. Chinese companies' entry into Iraq's oil and gas sector is a result of an agreement inked back in 2019 and dubbed 'Oil for Reconstruction and Investment', under which Chinese companies are granted entry into Iraq's energy infrastructure sector as investors in return for oil supplies.
Business Recorder
22-05-2025
- Business
- Business Recorder
Iraq signs mega-energy deal with Chinese oil firm
BAGHDAD: Iraq signed a major energy deal Wednesday with a Chinese petrol company in the southern province of Basra, aiming to boost oil production and build a refinery and electricity plants. China has gained a major foothold in oil-rich Iraq in recent years, becoming a major player across various sectors and now one of the largest importers of Iraqi crude. Iraq's Oil Minister Hayan Abdel Ghani announced in a statement the signing of the mega-project with a consortium comprising of Geo-Jade Petroleum and the Iraqi company Hilal al-Basra. The project aims to increase oil production in the Tuba field to 100,000 barrels per day, according to Abdel Ghani. It also covers the building of a refinery with a capacity of 200,000 bpd, a 650-megawatt electricity plant and a solar power facility with a capacity of 400 megawatts. The deal also includes a petrochemical plant and a fertiliser factory. Abdel Ghani said the project 'would contribute to the country's economic development and provide job opportunities for thousands' of Iraqis.
Iraq Business
21-05-2025
- Business
- Iraq Business
Chinese Firm signs Contract for Integrated Energy Project
By John Lee. Iraq's Ministry of Oil has signed a major contract for the South Basra Integrated Project with a consortium comprising China's Geo-Jade Petroleum and Iraq's Crescent Basra (Hilal Al-Basra). The agreement, signed on Wednesday marks the Ministry's first adoption of a fully integrated project model. Oil Minister Hayan Abdul Ghani described the deal as a strategic leap in developing Iraq's oil wealth and supporting the national economy. The project includes: Increasing production at Al-Tubba [Tuba] field from 20,000 to 100,000 barrels per day (bpd). Constructing a high-specification refinery with a capacity of 200,000 bpd. Establishing a petrochemical plant with an annual capacity of 620,000 tonnes. Building a fertilizer plant producing 520,000 tonnes annually. Developing a thermal power plant generating 650 megawatts. Building a 400-megawatt solar power station. Surplus electricity from the project will be fed into the national grid, contributing to Iraq's energy mix and infrastructure enhancement. The Minister emphasised the project's role in economic diversification and job creation for thousands of Iraqi workers. The signing ceremony was attended by deputy ministers for distribution, extraction, gas, and refining, along with senior officials from relevant companies and departments, including: Bassem Mohamed Khudair, Deputy Minister for Extraction; Bassem Abdul Karim, Director General of Basra Oil Company (BOC); and Hassan Mohamed Hassan, Director General of the Iraqi Drilling Company (IDC). The companies signed a Heads of Agreement exactly one year ago. (Source: Ministry of Oil) Tags: Basra Oil Company (BOC), cg, Crescent Basra (Hilal al-Basra), featured, Geo-Jade Petroleum, Iraq Oil Production News, Iraqi Drilling Company (IDC), Petrochemicals, Refineries, renewable energy, solar power, South Basra Integrated Project, Subba, Tuba, WW
