Reaping Biggest Benefits of Iraq Oil Boom

britexpat
By britexpat

BAGHDAD — 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 National Defense 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, and just as important, 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. “The Chinese had nothing to do with the war, but from an economic standpoint they are benefiting from it, and our Fifth Fleet and air forces are helping to assure their supply.”

In the desert near the Iranian border, China recently built its own airport to ferry workers to Iraq’s southern oil fields, and there are plans to begin direct flights from Beijing and Shanghai to Baghdad soon. In fancy hotels in the port city of Basra, Chinese executives impress their hosts not just by speaking Arabic, but Iraqi-accented Arabic.

Notably, what the Chinese are not doing is complaining. Unlike the executives of Western oil giants like Exxon Mobil, the Chinese happily accept the strict terms of Iraq’s oil contracts, which yield only minimal profits. China is more interested in energy to fuel its economy than profits to enrich its oil giants.

http://www.nytimes.com/2013/06/03/world/middleeast/china-reaps-biggest-b...

By snakyy21• 4 Jun 2013 11:21
snakyy21

Exactly Briexpat

By britexpat• 4 Jun 2013 11:20
Rating: 4/5
britexpat

The simple fact is that the USA went to Iraq for its own long term objectives. USA firms have got big contracts , but did not get everything as people expected.

China has played clever and picked up the pieces whilst compromising profit for long term engagements and ofcourse fulfilling its own needs.

By snakyy21• 4 Jun 2013 11:16
Rating: 4/5
snakyy21

RC... why every topic has to have a religious background attached to it... there is enough animosity and fighting in the world based on the religous backgrounds... even amongst same fractions... and these thoughts bring more animosity to our minds.

But if we have to speak about it... then US did a lot more than Chineese will ever do.. US is a bully.... but it is gradually waking up.

By Rip Cord• 4 Jun 2013 11:10
Rip Cord

Yes the Chinese are lovely people, just a shame that they persecute muslims in the west of the country but that probably doesn't bother you when negotating to sell them oil.

By snakyy21• 4 Jun 2013 11:02
Rating: 5/5
snakyy21

Bla bla bla.... US went to Iraq with no grounds and with one purpose... rip off Iraqis.. their oil companies and contractors benefited from the invasion... but a regular American did not... poor Iraquis suffered... what Bush did is converted every dollar of government money to 5 cents in the pockets of his buddies .... it is a poor trade... but they dont care as they are selfish.. and immoral... the Chineese on the other hand need oil... and they have not done anything bad to Iraq... hence the result....

By Rip Cord• 4 Jun 2013 09:17
Rating: 5/5
Rip Cord

It's funny when I said that the benefits to the US are massively outweighed by the costs many were too keen to stick to their, it's all about the oil line that they are fed thinking they are being smart.

China is the big winner here, (as well as Iran) and they will also be the big winner in Libya. They don't ask questions and don't care about human rights. If the Iraqis have to kill more Iraqis so the Chinese get their oil, then the Chinese will consider that acceptable business losses.

Be careful what you wish for.

By Prize• 4 Jun 2013 09:01
Prize

diplomacy at work.

By Sulieman• 4 Jun 2013 08:52
Rating: 5/5
Sulieman

Very Interesting

The half of the oil is being sold, but i don't see the benefits reaches the Iraqi people, or it reaches some of them.

but the Question is ,,, If the half is for china and other half is for the US,, so what has left to the Iraqis?

Talking about Iraqi Oil, Saddam Hussein used to give Jordan oil for free, Not anymore.

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