Chinese marketers have expanded their force business in Iraq, winning 87% of all power, oil and fuel allocation contracts awarded in the country in 2022.
From the beginning of the year until November 3, the total contracts awarded in the 3 sectors amounted to $ 3,872 million, according to data registered through the regional allocation tracking service MEED Projects.
Of these, $3. 35 billion of assignment contracts were obtained through Chinese contractors.
Chinese contractors won 8 of the thirteen contracts awarded in the period.
Major projects awarded to Chinese contractors this year come with a $594 million contract to expand a central processing facility (CPF) in Iraq’s Block Nine oil zone.
It was awarded to a joint venture between China National Offshore Oil Corporation and China CAMC Engineering Company in January.
Also this year, China Petroleum Engineering
The planned plant in Mishrif Qurainat (MQ) is the first assignment of a new crude oil processing facility in the oil field in the 10 years.
The scope of the allocation includes the progression of two new oil trains, with a capacity of 120,000 consistent barrels per day (b/d).
The contract is valued at approximately $386 million and is expected to take 3 years.
CPECC also won two water injection lots, valued at $250 million, as a component of the West Qurna-1 oil box progression allocation in Iraq. The consumer of the allocation is US-based ExxonMobil. Both packages were awarded in October of this year.
Only two primary energy allocation contracts have been shown as awarded this year to non-Chinese contractors. The country of origin of the 3 contract winners has not yet been shown, according to knowledge gathered through MEED Projects.
One of two power contracts awarded to a non-Chinese contractor this year, a $69 million contract with Croatian organization Koncar for the overhaul of the Haditha hydroelectric plant. It was awarded in June.
Also in June, Iraq’s State Oil Projects Company (Scop) and Czech company UNIS secured a $245 million allocation to expand a naphtha hydrotreating (NHT) unit and a non-stop catalyst regeneration (CCR) unit at the existing Basra refinery.
Chinese traders have been active in Iraq in recent years.
For all energy contracts awarded in Iraq between early 2018 and November 3, 2022, Chinese contractors won contracts totaling $21. 189 billion, or 59% of the total of all contracts awarded of $35. 677 billion.
During the same period, Japanese contractors earned $3. 775 billion in energy allocation contracts, more than any other country in China.
U. S. contractors U. S. officials won contracts with a total price of $2. 987 billion, ranking third when ranked on the total price of contracts won.
The percentage of the energy contract price earned through Chinese corporations has increased every year for the past 3 years.
In 2021, Chinese contractors won $9800 million in Iraqi energy contracts, or 79% of all energy contracts awarded in the country that year.
In 2020, Chinese contractors won contracts worth $1 billion, just 16% of the $6. 8 billion in contracts awarded that year.
The global energy transition has played a role in the good fortunes of Chinese traders in the Iraqi energy sector in recent years.
Iraq’s oil and fuel fields are among the most carbon-intensive in the world. Western foreign oil corporations (IOCs), which are under increasing pressure over their emissions, have begun looking to sell some of their Iraqi assets.
This has given Chinese oil companies, which are less pressured to reduce their emissions, the opportunity to obtain assets at a lower price and has created a close relationship between Chinese traders and Iraq’s state-owned power companies.
In recent years, China has been the wife of Iraq, offering reliable and effective investments and contractual services.
China has also benefited from the relationship with Iraq, as it provides Beijing with reasonable oil and provides a market in which its companies can operate.
Although China has been primarily concerned with traditional power projects in Iraq in recent years, more recently, there are signs that it is about to become a major player in Iraq’s renewable energy plans.
China has been the world’s largest solar panel manufacturer since 2008 and has more installed solar force capacity than any other country.
Despite the benefits for both countries, some Iraqi officials have become increasingly concerned about their reliance on Chinese traders to expand their energy sector.
In recent years, Iraq has made abundant efforts to strengthen its engagement with Western corporations in order to expand the Iraqi investor portfolio and dependence on a single country.
It is still transparent how the election of Abdul Latif Rashid as Iraq’s new president will replace the country’s relations with China.
He formed his government in October after months of political stalemate and would possibly be willing to strengthen cooperation with China in exchange for economic benefits, as the country grapples with problems such as poor public service delivery and mass youth unemployment.
Even if the new Iraqi government needs to review to restrict China’s integration into the Iraqi economy, it will most likely struggle to find subcontractors from other countries who can supply the same thing at the same price.
The wide diversity of economic synergies between the two countries means that Chinese contractors are very likely to win a large number of energy contracts in Iraq for some time.
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